Do What You Do Best

August 11, 2008 - 08:08

In today’s competitive markets, just being able to produce high-quality plants and flowers does not mean that you can market them for a price that covers your costs. The fact that no one else is producing a particular product does not mean that a viable market exists. You must grow plants and deliver services that consumers want.

Whether you sell directly to retail consumers or on a wholesale basis, you need to think about what the consumer wants. After all, large wholesale companies such as Coca-Cola are still very concerned about their end consumers’ preferences.

Your product must satisfy the consumer’s needs: the features, service aspects, marketing season and benefits to the buyer. Look for niche markets and products that consumers want, especially those that other producers are not supplying. Exploit your comparative advantage; in other words, do what you do best while giving consumers what they want.

Approach with Caution

Here are the first three steps to finding your niche:

Look to yourself. Determine what areas of life you are most interested in and how they will interface with your product. Where do you have expert knowledge? What do you enjoy? Where’s your passion? If you were to pick an area where you have no interest, it’ll be hard to keep at it week after week, month after month. You will also need knowledge you can share with people to market your product. Your expertise is the “value added” element that brings excellence to the product.

Survey the competition. Look at your potential competition. Assess the potential market to determine whether there’s an area that could use your new products or services. An easy way to make this determination is just to talk to people. This will usually start with your current customers unless you are entering a totally different market. For example, if you are a wholesale grower and want to add a retail component, you may need to interview potential retail consumers directly. Another option is to join groups of people who have similar interests, such as garden clubs, health clubs, little league boosters or soccer clubs. How can you do it better, faster or cheaper — or offer a new twist — and provide excellence where you now find only mediocrity?

Assess the value. Determine whether you can be comfortable with the anticipated income from the new product or service. If you do your research carefully and persistently, you’ll probably find some niches that have potential but are either unfilled (not likely these days) or underfilled (very likely).

The Rules of the Game

Taking on a new niche can be a low-risk way to grow your business, as long as you keep in mind several important rules:

Meet the customer’s unique needs. What can you provide that’s new and compelling? Identify the unique needs of your potential audience, and look for ways to tailor your product or service to meet them.

Dreyer Farms is an example of a successful niche marketer that meets its customers’ needs with fresh local products and service. The Dreyer family had a wholesale vegetable farm located in Cranford, N.J. Cranford has become a commuter city for Wall Street executives. Thus, the Dreyers face continuing increases in land prices, taxes and labor costs.

The Dreyers reassessed their situation and switched to year-round retail sales. They added a greenhouse and sell bedding plants in the spring and Christmas trees at the end of the year. The Dreyers realized their comparative advantage was being surrounded by high-income consumers who saw agriculture as a novelty and were intrigued by agriculture — but didn’t really want to get their hands dirty. So the Dreyers compete against the big boxes by offering local, in-season and value-added.

At Christmastime, Dreyer Farms offers a vast selection of Christmas trees. They fresh cut the trunk, prepare it to be set in its base, wrap it in a net, load it into the customer’s trunk and allow customers and their children to sip on free cocoa or coffee while they wait.

In the spring, the Dreyers will custom pot annuals and perennials in their pots or the consumer’s pots. For their customers’ convenience, they now accept credit cards in addition to cash.

Say the right thing. When approaching a new market niche, it’s imperative to speak that language. In other words, you should understand the market’s “hot buttons” and be prepared to communicate with the target group as an understanding member — not an outsider. You may need to alter even the most basic elements, such as your company slogan, if it translates poorly. Understand the niche’s members’ key issues and address them.

Barlow’s, another New Jersey business in a high-income area, offers “free potting,” whether customers buy the pots from them or bring their own. They offer this service because they know their customers want “no fuss, no muss.” Barlow’s has its own retail florist/gift shop that displays plants arranged in baskets and other containers. This gives their customers something new and different from the typical cut flower arrangement, and it uses the products Barlow’s produces.

Some customers were driving past Barlow’s former retail shop because it looked dark and closed all the time, so they purchased a special retail greenhouse that is bright and welcoming. Now, customers know they are open all year!

Always test market. Before moving ahead, assess the direct competitors you’ll find in the new market niche and determine how you will position against them. For an overview, it’s best to conduct a competitive analysis by reviewing competitors’ ads, brochures and websites, looking for their key selling points, pricing, delivery and other service characteristics.

What if there is no existing competition? Believe it or not, this isn’t always a good sign. True, it may mean that others haven’t found the key to providing a product or service this niche will want to buy. However, it’s also possible that others have tried and failed. Careful test marketing will help you gauge the market’s receptiveness to your product or service and message.

Homewood Nursery & Garden Center is a large independent garden center in Raleigh, N.C., providing top-quality plants and selection in a beautiful, relaxing environment. In response to the drought and watering restrictions in the South, Homewood Nursery & Garden Center is selling rain barrels to its customers. They purchase them from a local high school student entrepreneur who makes them from pickle barrels.

In addition to the rain barrels, they have developed a complete program on water conservation, including point-of-purchase and website information on drought-tolerant plants and other water-saving tips. They also offer free gallons of their well water for customers to take home for watering plants. They test marketed these solutions to consumers’ fears that they wouldn’t be able to grow plants because of water restrictions.

Looking Toward the Future

Changing demographics in the United States — more mature consumers, greater ethnic diversity, and two-income families and single-parent families — are driving changes in consumer demand. Changing consumer preferences, along with technological advances and other changes in the economy, offer greenhouse companies new opportunities.

So what does the modern consumer want? Convenience and variety are clearly important. Some consumers need or want good deals and will search for lower prices. Today’s time-pressed consumer is purchasing more for convenience, as well as quality, variety and value. Surviving local competition usually means that growers compete either on low price or high quality. You need to decide on one or the other, because if you don’t have the lowest price or focus on the highest quality, you have maneuvered yourself into a no-win position.

Understanding and tailoring to these diverse consumer preferences moves your product to the forefront and pulls it through the supply chain. Analyze yourself and the competition, and look at what products and services you can offer to meet your consumers’ needs while, at the same time, making a profit. In other words, find your comparative advantage and exploit it.

I have developed a worksheet to help you through this process (page 26). A more detailed worksheet for looking at markets can be found on my website at: aesop.rutgers.edu/~farmmgmt/marketing/tomarket.pdf.

About The Author

Dr. Robin G. Brumfield is a specialist in farm management. She can be reached at brumfield@aesop.rutgers.edu.

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