POP and Branding Study Results Part II

October 29, 2004 - 10:15

Back by popular demand the “Point-of-Purchase and Brand Building Equity Study, Increasing the Value of Retail Real Estate,” Phase II is now out after the success of part 1 last year (look for last year’s results in GPN December 2003, January and February 2004). This year’s study, brought to you by Horticultural Marketing & Printing, Swanson Russell Associates and Nquery Research, showed how consumers considered branded plants as having a greater perceived value than the unbranded product.

The basics of the study were done in two geographic locations during two phases of the gardening season at a big box store and an independent retailer. The first phase was done in Dallas, Texas, April 30 through May 9, 2004 at three Home Depots (big box) and three Calloway’s (independent retailer). The second phase was done June 4 through June 13, 2004 in San Jose, Calif., at three Home Depots and three SummerWinds Nursery. The name of the branded product was Southern Shades.

To compare branded and unbranded materials both same 4 1/2-inch impatiens varieties and colors and all of the plants were sent by the same grower, Powell Plant Farms, Inc. in Texas and Kawahara Nursery in California. The branded material was priced higher and had all of the merchandising materials to go along with it as well as “promises” (example: #1 in University of Texas) to the consumer.

The key findings of the study were that more unbranded plants were sold than branded plants during the above time periods. However, the higher retail gross margins per plant for the branded product produced a larger total gross margin than what was gained through the unbranded versions of the same product. According to the study, this shows that growers and retailers can maximize their profits by offering premium-priced branded products alongside lower-proceed unbranded products. Consumers will have different preferences, and giving them a choice will benefit not only the consumer, but the grower and retailer as well, according to the study.

The bottom line, there is a large percentage of consumers who are willing to pay more for the branded plants that promise significant advantages. In any given retail space, growers and retailers can make more money if that space contains both branded (good) and unbranded (better), rather than devoting the total space solely to unbranded products, according to the study. For more information on this study please contact Horticultural Marketing & Printing at (888) 217-5357; Swanson Russell Associates at (402) 437-6436; or Nquery Research at (404) 728-9374.

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