Firms have limited resources that cannot be allocated efficiently to the market as a whole, but can be targeted to selected customer groups. Market segmentation is the process of dividing a market into distinct customer components. Selected products and services that best meet the needs of a selected customer group are targeted to that particular segment in a marketing strategy. Market segmentation and product-targeting concepts help management efficiently allocate scarce resources as part of a comprehensive strategy to expand revenues and profits.
Bridget K. Behe
Bridget K. Behe
Michigan fresh asparagus marketers were interested in profiling asparagus consumers in the Northeast and Midwest with regard to preferences, purchases, preparation, and consumption. A computer-assisted survey was conducted with a total of 1126 respondents representative of the population on average in 12 selected states in the Northeast and Midwest. Even though the U.S. Department of Agriculture recommends adults consume three servings of vegetables daily, on average over the 2 weeks before taking the survey, 62% did not. Only 39% of the persons in the sample ate fresh asparagus in the 4 weeks preceding the survey. Twenty-five percent ate it steamed on the stovetop. The conjoint analysis accounted for 63% of the variance in asparagus preference with attribute relative importance decreasing from price (42.0%), to brand (29.9%), to spear diameter (23.5%), to spear segment (4.6%). Light users consumed fresh asparagus at least once in the 4 weeks before the survey, during the peak fresh asparagus season. The potential to increase consumption in this large group (28% of the sample but 71% of asparagus consumers) is tremendous. They placed high relative importance on price per pound and will likely be the more price-sensitive group. If their consumption can be increased by one more asparagus consumption event per month, it could increase asparagus demand by 14%. Results show there is good market potential for a prepackaged fresh asparagus product in the Northeast and Midwest.
Bridget Behe and Susan Barton
SERVQUAL has been demonstrated to be a reliable and valid tool to measure customer perceptions and expectations of service quality. Two previous uses of the survey in the horticulture industry were identified. In Spring 1997, we adapted the SERVQUAL instrument to survey 701 customers of 10 retail garden centers (TR) and four nontraditional retail or mass-merchandise outlets (MM) in seven U.S. markets. Among the seven markets, customers differed on only two of six demographic characteristics: income and number of people residing in the household. Demographic characteristics of TR and MM customers were similar in terms of age (47 and 45 years), people residing in the household (2), percent female respondents (77% and 73%), and family status. Customers differed demographically on 1996 household income ($50,722 and $44,753). Customers of TR and MM had similarly high expectations for three of five service quality and one product quality dimensions. However, TR customer perceptions were consistently higher on all service and product quality dimensions than MM customers. This yielded consistently higher service quality gaps for MM customers when compared to TR customers. We concluded that TR hold an advantage in these seven markets with higher customer perceptions of product and service quality.
Chengyan Yue and Bridget K. Behe
Flower color is a dominant attribute of fresh flowers, likely playing a key role in purchase preference. Several prior studies showed flower color preference differed by gender, but other information on color preferences is sparse. Data for this study were collected by the Ipsos-National Panel Diary Group for the American Floral Endowment, which maintained an extensive panel of consumer transactions from 1992 to 2005, including floral purchases. Multinomial logit analysis of single-stem cut flower purchases showed that men and women differed in their cut flower color preferences but that flower color preference also varied with demographic characteristics and by occasion. We grouped colors into six categories: BluePurple, RedBronze, PeachPink, White, Yellow, and Other. The highest percentage of flowers purchased were RedBronze (34%), whereas the lowest percentage of flowers were Yellow (10.01%) with Other flower colors accounting for less than 5% of purchases. Although women used a more diverse color palette, both men and women were more likely to buy RedBronze flowers for an anniversary and buy PeachPink flowers for Mother's Day. Between 1992 and 2005, women were less likely to purchase PeachPink flowers and men were less likely to purchase RedBronze over time. Overall demand for BluePurple and Yellow flower colors increased over time, whereas the demand for other color categories decreased over time.
Chengyan Yue and Bridget K. Behe
Competition among floral retailers has promulgated industrywide structural changes while giving consumers more choices in locations for purchase. Consumer panel data collected by the American Floral Endowment from 1992 to 2005 were used to evaluate consumers' choice of different floral retail outlets among box stores (BS), traditional freestanding floral outlets (TF), general retailer (GR), other stores (OS), and direct-to-consumer (DC) channels. Since 1992, market share and percentage of transactions decreased through TF but increased for BS. Mean expenditure per transaction in TF was higher than in BS and GR. Consumers who made floral gift purchases were more likely to patronize TF, but those who bought floral products for themselves were more likely to purchase from BS. Consumers patronizing TF or DC were more likely to buy arranged flowers rather than unarranged flowers. Consumers who purchased foliage plants and outdoor bedding or garden plants were more likely to buy them from BS. Reasons consumers who choose BS and GR cited for using those outlets included convenience and lower prices, whereas consumers who purchased from TF and DC cited delivery, reputation, and service as major drivers impacting their use. Demographic and geographic differences were also identified among consumers using the aforementioned outlets.
Bridget K. Behe and Dennis J. Wolnick
Market segmentation is an, efficient method of defining consumer groups to develop new markets. The purpose of this research was to determine the viability of market segmentation strategies based on volume and location of purchase. A sample of 401 Pennsylvania floral consumers was divided into groups based on the number and the primary location of floral purchases. Two discriminant analyses were conducted to determine differences between market segments. Heavy floral consumers exhibited a higher level of floral knowledge, purchased more floral products for themselves and from nonflorist retailers, and had higher incomes than light or medium floral users. Florist customers purchased fresh flowers more frequently, bought more floral gifts, and spent a higher amount per purchase than supermarket customers. Segmentation based on volume of purchase and primary retail location are both viable alternatives for market development strategies for floral consumers.
Bridget K. Behe, Patricia Huddleston, and Lynnell Sage
Marketers invest nearly 8% of their advertising budget on in-store marketing because >70% of all buying decisions are made at the point of purchase. Older consumers, especially Baby Boomers (typically classified as persons born from 1950 to 1965) have long been considered a core target market for horticultural products. However, some industry concerns have arisen with regard to the lack of purchasing among younger age cohorts, especially Gen X (born 1966–77) and Gen Y (born 1978–90). Brands help to create the perception of added value while also differentiating products from competitors. Often, brands are one of a few pieces of information consumers use to make product choices. We conducted an online survey in May 2014 to investigate the role of age cohort and brand recognition on the likely to buy (LTB) rating of two herb and two vegetable transplants. We showed study participants images of 16 plants, varying the container color (white, green, and yellow), plant type (basil, parsley, tomato, and pepper), plant brand (generic and three national brands), and price. About equal numbers from three age cohorts (Boomers, Gen X, and Gen Y) were represented in the sample of 566 plant purchasers. We observed that more Boomers had seen (recognized) Brand P, whereas more Gen X and Gen Y participants had seen Brand L. Subjects who had seen the plant brands before the study had a higher mean LTB rating for branded plants compared with those who had not seen the plant brands before the study. Furthermore, both Gen X and Gen Y were more LTB branded plants compared with Boomers. In the conjoint analysis, we found that plant type was the most important product attribute. Price and brand were similarly important but also less important than plant type. All three attributes were more important than container color. Having no brand on the container detracted $0.20 from the perceived value of the plant while the brands added up to $0.15 to the perceived plant value. Future marketing strategies which include branded plants at the point of purchase likely will increase perceived product value and LTB, especially among younger consumers.
Susan S. Barton and Bridget K. Behe
The retail portion of the green industry, valued at $50.55 billion, continues to provide a major connection between the industry and consumers. Given the importance of retailers in the green industry and little research exists that documents their advertising practices and impacts, the 2013 Trade Flows and Marketing Practices survey included questions to capture data for retail-only firms. This paper reports on the percentage of sales retailers allocate to promotion and advertising, including a breakdown of media used; point-of-sale (POS) materials and how they are acquired; how green industry retailers are using social media and mobile marketing [in particular, quick response (QR) codes]; the methods retailers use to collect customer demographics; customer loyalty programs (CLP); and how they are managed by retailers and a comparison of retail firms’ advertising practices by size of firm. A combination of mailed and Internet-distributed surveys resulted in a total of 699 useable retail business responses with greater than or equal to $1000 in annual revenue. The median expenditure as a percentage of sales on advertising was 3.6% for all retail firms responding with 33.7% spending no dollars on advertising. In examining the distribution based on media type, the Internet was the most frequently listed by firms (32.3%) with a mean expenditure of 42.5% of total advertising dollars. Social media was listed second most frequently (21.5%) with a mean expenditure of 29.6%. Newspapers were listed as the third most frequently used type of media (18.0%). Social media use is strong and among social media platforms, Facebook (60%) far exceeds any other platform. A third of the respondents (34.2%) reported the use of POS materials. A very small percentage of firms (3.0%) reported using QR codes and 19.4% reported having a CLP. Of those, 45.8% used customer purchase cards, whereas 35.4% used POS software. Nearly 33% of the firms collected demographic information about their customers. Of those, the method with the highest percentage use (multiple responses were permitted) was social media (50.7%) followed by CLP (48.9%), web visits (34.5%), questionnaires (15.7%), social coupons (13.5%), census data (3.9%), and marketing firms (3.1%). There were firm-size differences in seasonal employees and mean sales per employee with large firms having greater numbers than hobby, small- or medium-sized firms. There were no differences in the percentage of advertising media allocations based on firm size, but large firms used web visits, social coupons, and social media more than other types of firms to collect customer demographics. While, green industry retailers are currently using social media for marketing green industry goods, they have much more opportunity to use electronic media for CLPs and to begin using QR codes or other mobile-centric technologies to deliver in-store promotional information to consumers.