Fresh-cut flowers have been an important part of our society since ancient Greece and continue to be enjoyed for their aesthetics on numerous holidays, as gifts, and on other occasions (King, 2007). Cut flowers are also important to the U.S. economy. In 2012, the U.S. gross market value (sales volume) of wholesale fresh cut flowers was $11.7 billion (Society of American Florists, 2013). Bonarriva et al. (2003) concluded that the U.S. cut flower market is attractive to international growers who produce cut flowers at lower costs than U.S. growers. Lower wage rates, less climate control investments, and weaker currencies contribute to lower production costs for international growers compared with domestic producers (Bonarriva et al., 2003). Consequently, in 2012, 64% of U.S. cut flowers were imported (Society of American Florists, 2013). Ninety-three percent of the 2012 cut flower imports came from Ecuador and Colombia (Society of American Florists, 2013). As a result of the highly perishable nature of cut flowers, the time spent in transit and transportation conditions adversely affect cut flower postharvest vase life (Dole and Wilkins, 1999).
The highly perishable nature of cut flowers amplifies the importance of postharvest vase life management to all supply chain members (producers, wholesalers, retailers, and consumers). Short vase life is a primary purchasing barrier for consumers because a short vase life decreases consumer satisfaction (Ozzambak et al., 2009; Society of American Florists, 2005a) and reduces perceived value. Dissatisfaction discourages consumers from making repeat purchases (Rihn et al., 2011). Yue et al. (2009) concluded greater longevity positively impacts Generation X and Y consumers’ purchasing decisions. These studies suggest that floral longevity is a key product characteristic of cut flowers. To date, few studies have investigated consumers’ expectations for cut flower longevity or their willingness to pay for cut flowers with longer vase life.
Unlike flower color or form, flower longevity is not readily apparent to consumers when considering a floral purchase. As a result, consumers try to estimate flower longevities while shopping (Jowkar et al., 2007; Smith, 1968). Consumers use their longevity estimates as their internal reference points to determine their post-purchase satisfaction. If the postharvest longevity is less than the internal reference point, the consumer is dissatisfied. Dissatisfaction decreases the consumers’ possibility of repurchasing the product (Dennis et al., 2004). Consumers’ ability to accurately estimate cut flower vase life varies. Jowkar et al. (2007) found consumers could not accurately estimate how long cut flowers last; however, conflicting conclusions were drawn by Smith (1968) who found consumers are fairly accurate in predicting vase life. Yue et al. (2009) suggested that familiarity with cut flowers increases estimation accuracy for the longevity of cut flowers. These studies lead to the hypothesis that the use of longevity labels might have the potential to mitigate consumers’ incorrect estimations by providing consumers with accurate information about the longevities of cut flowers. As a result, consumers’ satisfaction may be improved by assisting them in creating more accurate expectations.
Cut flowers in the United States continue to be popular home decor and gift items (Society of American Florists, 2005b). In 2004, 67% of U.S. cut flowers were purchased as gifts (Society of American Florists, 2005b). Behe et al. (1992) and Huang (2005) determined that having purchased a floral gift in the past positively affected consumers’ frequency of any floral purchase. However, studies have found gifts are perceived as riskier than non-gift items because a badly chosen gift harms the relationship between the gift giver and recipient (Roster, 2006). Yue et al. (2009) found that cut flower gifts are perceived as riskier than cut flowers purchased for personal enjoyment or as decor items. Therefore, as a result of increased risk with floral gifts, cut flower use may impact the importance of safeguards such as longevity indicators and guarantees.
Guarantees reduce consumers’ perceived risk (Dennis et al., 2004). Dennis et al. (2004) demonstrated guarantees decrease consumers’ perceived risk for potted plants and also improve consumers’ perceptions of floriculture products’ quality. Guarantees are a means of minimizing consumers’ regret of making a purchase (Dennis et al., 2004; Ortony et al., 1988). Regret often results in switching subsequent purchases to other retailers or products.
Guarantees provide numerous benefits and improve consumer satisfaction. Previous studies showed that product guarantees protect consumers, provide firms a competitive advantage, signal product quality, and provide value to businesses and consumers (Ang and Lee, 2000; Kukar-Kinney and Walters, 2003; Lee and Khan, 2012). Behe and Barton (2000) concluded consumers expect retailers to provide guarantees on rooted plants as a result of anticipating the rooted plants having greater lifespans. In turn, guarantees on rooted plants increase consumer satisfaction (Behe and Barton, 2000).
The benefits of using and communicating guarantees may extend to shorter-lived cut flowers. Rihn et al. (2011) suggested using cut flower guarantees to reduce perceived risks and improve consumers’ experiences with floral products. However, Dennis et al. (2003) found a guarantee on Valentine’s Day roses did not impact purchasing decisions. Consumers were also unaware of guarantee offerings in floral retail outlets (Dennis et al., 2003). The study conducted by Dennis et al. (2003) was for a specific occasion (Valentine’s Day). The impact of guarantees on consumers’ cut flower purchases in general (on all occasions) and their willingness to pay (WTP) for cut flower guarantees remains unknown.
In this study, choice experiments were used to determine consumers’ preferences for longevity length and presence/absence of a guarantee on cut flower arrangements. The advantages of using choice experiments include flexibility (in terms of experimental design and number of attributes), the ability to gain information on consumer-purchasing behavior, and the capability of identifying the relative importance of product attributes to consumers (Lusk and Shogren, 2007). In the past, choice experiments have been extensively used to determine consumers’ preferences and WTP for different horticulture products and product attributes (Chung and Vickers, 2007; James et al., 2009; Koelemeijer and Oppewal, 1999; Yue et al., 2007).
In addition to choice experiments, consumer segmentation has been used to research and target specific subgroups of consumers (Oppenheim, 2000). Specifically, Ward’s linkage cluster analysis has been used to identify consumer groups based on consumer behavior and sociodemographic variables (Lessig and Tollefson, 1971; Zarantonello and Schmitt, 2010). Specific marketing efforts can then be developed to target these subgroups. Marketers can more efficiently allocate their marketing dollars to segments on which the marketing strategies might have the greatest impact.
In our study, we focus on current cut flower consumers because retaining existing customers requires less time and financial resources than acquiring new customers (Schiffman and Kanuk, 2007). The overall objective was to explore consumer preferences and WTP for cut flower arrangements with varying vase life longevity and presence/absence of a guarantee. Specifically, we tested three hypotheses, including: 1) given the same flower type and the same longevity, consumers will prefer cut flowers with a longevity guarantees over cut flowers without a longevity guarantee; 2) given the same flower type, consumers will prefer cut flowers with a longer vase life over cut flowers with a shorter vase life; and 3) consumer preference for cut flower longevity and presence/absence of a guarantee will be heterogeneous; there are different preferences for cut flower longevity and a guarantee.
Our findings could assist florists, floral retailers, floral producers, and other industry stakeholders in determining how much value different consumers place on the use of longevity indicators and/or guarantees. The use of longevity indicators and guarantees could lead to greater sales and potentially higher profits.
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