The market for green industry products, especially plants, has begun to reach maturity which means sales are increasing at a decreasing rate (Hall and Dickson, 2011). As the industry reaches maturity, firms can either take market share from other firms or transition nonbuyers to buyers to increase sales (Behe et al., 2013). As firms struggle to gain/retain market share and bring in new customers, it is essential to evaluate consumer reaction to various marketing activities. Given that many nursery/greenhouse firms operate on “thin profit margins” (Sturdivant, 2013), it is important to understand how local labeling and the intrinsic value, if any, associated with an outlet type (i.e., home improvement center/mass merchandiser vs. nursery/greenhouse) can impact consumer preference and/or WTP.
Consumer demand for local products has continued to climb over the past decade. Notably, much of the focus has been on food products with recent estimates of local food sales around $6.1 billion in 2012, which was an increase of 27% from 2008 (Low and Vogel, 2011; Low et al., 2015). Studies have shown that many consumers prefer and may be willing to pay a premium for local food (Darby et al., 2008; Onozaka and McFadden, 2011; Yue and Tong, 2009). Perceived benefits of locally labeled plants, such as being better for the environment from a production perspective, helping the local economy, and product quality, closely align with perceived benefits of local food (Campbell et al., 2014; Khachatryan and Rihn, 2015). However, little attention has been devoted to evaluating the value of locally grown labeling on plants. The few studies that have examined this topic have shown that local labeling has the potential to generate positive consumer preference and price premiums. For instance, Collart et al. (2010) showed dichotomy in the market with some consumers (i.e., those aware of a local plant brand) willing to pay more, while other consumers (i.e., those not aware of a local plant brand) discounted a local plant brand. Collart et al. (2013) showed that consumers purchasing plants more often are more likely to pay a premium for a local brand. Rihn et al. (2015) found that an in-state (Fresh from Florida) and domestic (grown in the United States) label increased preference for indoor foliage plants. Yue et al. (2011) found that women and certain types of plant buyers value local plants.
The intrinsic value associated with a nursery/greenhouse (home improvement center/mass merchandiser) retail outlet can also be a potentially valuable selling point compared with home improvement center/mass merchandiser (nursery/greenhouse) retail outlet. However, as with local labeling, there has been limited research examining the value of retail outlet on consumer preference and WTP for plants. Yue and Behe (2008) examined consumer choice of floral retail outlet and found that consumers purchasing foliage and garden plants were more likely to choose a box store. Furthermore, they found that box stores and a general retailer were chosen because of their reputation for convenience and lower prices. Satterthwaite et al. (2006) noted that convenience was the primary reason for shopping at an independent garden center followed by service, quality, and then price. However, chain outlets are primarily shopped at due to convenience and price with quality and service ranked lower on the list of priorities.
This study differs from previous studies in several ways. First, we evaluated local (grown in Connecticut) against a regional state (New Jersey), nonregional state (Washington), United States, and international (Canada) label so as to understand the trade-offs associated with these different labeling schemes. No study could be found in the literature that used specific regional and nonregional states. The use of specific states instead of an aggregate (e.g., regional, domestic) label is an important distinction as most products on the market list, if listed, a specific origin (i.e., producing state) and not a more general origin (e.g., product of United States). Our main hypothesis was that a locally labeled plant would be preferred to a nonlocally labeled plants across all consumer groups given the increasing trend toward purchasing local products. Second, we evaluated the value of retail outlet (nursery/greenhouse vs. home improvement center/mass merchandiser) to determine if differences exist between different market segments. Our hypothesis was that nursery/greenhouse outlets would be preferred by some, but not all, of the classes.
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