The U.S. green industry produced an economic impact of $147.8 billion in output, $95.1 billion in value-added, $64.3 billion in labor income and generated 1.9 million jobs in 2002 (Hall et al., 2006). The impact of this industry in the U.S. economy is substantial as reflected on these economic indicators as well as on positive growth rates even during recessionary periods, yet it has experienced a gradual slowdown in growth in the past years (Hall et al., 2006). Floriculture and nursery crops average annual growth rate decreased from 13.6% in the 1970s to an average growth of 9.9% per year in the 1980s to ≈2.9% in the 2000s, which may suggest that the market is maturing with an annual growth of less than 5% annually (Hall, 2008).
As markets mature, consumers are more demanding and competition is more intense. To remain competitive, producers need to become low-cost operators, increase customer value, or to differentiate in some way. In recent years, several brands have been established in the green industry (e.g., Sygenta flowers, Proven Winners™, Novalis™ Plants that Work™, Garden Splendor™), and several states have developed state-sponsored brands (e.g., Oklahoma Proven, Louisiana Select, Oregon Grown, Florida Plants of the Year) as a strategy to stimulate a saturated demand and increase profit margins.
The Texas green industry ranks third nationally in terms of output, value-added, and employment economic impacts. Palma and Hall (2009) estimated that in 2007, Texas produced $13.5 billion in output, $7.6 billion in value-added, and 157,990 jobs. Given the economic impacts of Texas' green industry in the U.S. economy and to support Texas producers' competitiveness, the Texas A&M University Agricultural Program in conjunction with other state and private collaborators started developing in 1989 the Texas Superstar™ program and in 1996 the Earth-Kind™ rose program. Both of these promotional and educational programs have been in the market for years now, and although substantial investments in research and marketing still need to be done by horticultural scientists, producers, sellers, and other partners to identify promising plant material, overcome production problems, and maintain credibility in the marketplace, no research has focused on analyzing consumer response with respect to these promotional/educational programs. Selected indicators of consumer awareness (i.e., sales statistics) have been recorded, but no emphasis has been given to consumers' brand awareness determinants and the consumers' willingness-to-pay (WTP) for Texas Superstar™ and Earth-Kind™ plant materials.
Research regarding the effects of brand awareness on consumer choice has shown that brand awareness precedes the development of concepts such as brand preference (Alreck and Settle, 1999), brand equity (Aaker, 1996), and brand attitude (Rossiter and Percy, 1987). Govindasamy et al. (1998) used a discrete choice model to measure the success of the Jersey Fresh Program (JFP), a state-sponsored marketing program in New Jersey, in terms of the program's awareness. As a result of the econometric analysis, the authors were able to provide a comprehensive study of the consumers' behavioral attitudes and demographic profiles. The results of this study showed the program was highly effective with awareness levels of ≈77%, and contrary to expectations, they found a significant negative relationship between older age groups and awareness of the JFP, which suggested the program was popular among young consumers (younger than 50 years of age).
According to Koelemeijer et al. (1993), the increased popularity in the study of brand awareness, consumers' WTP, and consumers' response in general to horticultural brands is explained by the fact that branding has been less commonly used in horticultural goods and it could be considered a recent marketing strategy adopted by the industry. Some studies have suggested that a brand guarantee in horticultural products is not sufficient to increase added value, although it is important to keep market share; whereas others have found that consumers' WTP for a horticultural brand changes according to the product's attributes (Bagnara, 1996; Yue et al., 2009). For instance, Bagnara (1996) evaluated consumers' WTP for a brand that guaranteed peaches produced by integrated pest management techniques and found that consumers were more willing to penalize unbranded peaches than to pay for a branded product. Also, Yue et al. (2009) found that consumers' WTP for plants decreases when plants are labeled as invasive and increases when plants are labeled as native. They found that consumers' sociodemographics and attitudes significantly alter consumers' WTP for native and invasive attributes.
The main objective of this article is to explain consumers' brand awareness and WTP for the Texas Superstar™ and Earth-Kind™ promotional programs on the part of Texas' lawn and garden consumers.
Bagnara, G.L. 1996 Brand name and added value in horticultural products: Analysis of consumer perception Proc. V Joint Conf. on Agr., Food, and the Environ. Working paper 96-4.
Bierlaire, M. 1998 Discrete choice models 203 227 Labbé M., Laporte G., Tanczos K. & Toint P. Operations research and decision aid methodologies in traffic and transportation mgt. Vol. 166 of NATO ASI Series, Series F: Computer and Systems Sci Springer Verlag Berlin, Germany
Govindasamy, R., Italia, J. & Thatch, D. 1998 Consumer awareness of state sponsored marketing programs: An evaluation of the Jersey Fresh Program J. Food Distrib. Res. 29 7 15
Hall, C. 2008 Understanding and competing in a maturing marketplace Presentation at Ohio Florists' Association (OFA) Annu. Mtg Columbus, OH 12–15 July
Koelemeijer, K., Leutscher, K.J. & Stroeken, J.J.G. 1993 Branding of horticultural products: An application to pot plants Acta Hort. 340 325
McFadden, D. 1974 Conditional Logit analysis of qualitative choice behavior 105 142 Zarembka P. Frontiers in econometrics Academic Press New York, NY
Pazgal, A., Seetharaman, P.B. & Batsell, R. 2005 Incorporating probabilistic choice rules within random utility models of brand choice: Theory and empirical, illustration. Working paper Dept. of Mktg., Rice Univ Houston, TX
Ward, R.W. 2004 Estimated impact of FPO's generic promotion of fresh cut flowers Paper presented at AAEA Annu. Mtg Denver, CO 1–4 Aug
Yue, C. & Behe, B.K. 2010 Consumer color preferences for single-stem cut flowers on calendar holidays and noncalendar occasions HortScience 45 78 82
Yue, C., Hurley, T. & Andersen, N. 2009 Do native and invasive labels affect consumer willingness to pay for plants? Paper presented at the Agricultural and Appl. Economics Assn. AAEA & ACCI Joint Annu. Mtg Milwaukee, WI 26–28 July