Cut Flowers

By Sohail Khan

Market Segmentation

1. Corporate & institutions These include hotels, offices and most importantly party decorators

and marriage halls. All these institutional as well as corporate customers are fed by wholesale dealers and distributors

2. Retail outlets These outlets could be anything from a roadside corner kiosk to a

Proper retail outlet shop in some high-end urban locality. these shops are either fed directly from farms or through a middleman or distributor

Positioning

• High-quality cut flower producer.• Professional.• ReliableTo communicate the message that they are the

finest grower of Cut flowers.Flora World will communicate their message

through informal gatherings and networking with wholesalers

Marketing Mix

• Gladiolus The flower is unique because of its longer lifespan and

beauty. It can be easily dyed and have a shelf life of one week, the bulbs can be imported from Netherlands

• Statices The flower is usually used as filler in fresh bouquets it

is considered everlasting when properly dried it can retain its vibrant colors for more than 6 months

• Carnation is considered as the world’s famous flower, national flower of Spain the name comes from a Greek word Dianthus meaning "Flowers of God”. national flower of Spain, clove-like fragrance.

• Marie Gold flower is widely used in decoration for weddings, festivals, and religious events.

• Tube Roses The flowers are used in wedding ceremonies, garlands decoration and various traditional rituals.

•Price:• Each stick of gladioli is to be sold for Rs 20 in the wholesale

market.• For Statices bunch of sticks (usually 24 sticks) to be sold for

Rs 60 in wholesale market.• Carnation for Rs 40 per flower/stick, Mari gold to be sold a

minimum for Rs 60/kg.• Tuberoses Rs 24 per bundle (usually 24 sticks in a bundle)

• Place: Cut flowers of Flora world Flora gardens will be available in

the major wholesale outlets in city.

• Promotion

1. Direct Marketing: 90% personal selling , Direct contact, in person visits, phone follow up to targeted buyers

2. Advertising: ad in business related & flower related publications

3. Public relations: Samples, donated products to annual flower arrangement competitions, local radio station interview of “How to keep cut flowers looking fresh longer”.

• Packaging: Simple packaging which would consist name of Flora World &

details about the product.

SWOT

Strengths: • High quality cut flowers• low cost of labor• different varieties of cut

flowers• Stable to growing demand

from the institutional market (offices, hotels and restaurants)

• longer shelf life• longer production season

Weaknesses:

• No easy access & few retail outlets

• Lack of experience in this field

• Unskilled labor

SWOT

Opportunities: • Few major Players i.e. Low

competition• Exporting cut flowers• Growing demand for cut

flowers• Resource rich local soil• No Government regulation

Threats:• Inflation• Perish-ability nature of

flowers• Competition from imported

cut flowers• Diseases can destroy

flowers

Pest analyses• Political:. If for instance the government imposes tax on this sector

this will negatively impact us. A conducive political climate would be favorable for any business and so for our business.

• Economic Increase in the purchasing power of individuals will increase the sales of the business,

Shortage of energy in the country will have a negative effect on the business as the water availability depends on the availability of electricity

Pest analyses

• Social: Social factors also play an important role. People’s attitudes

towards cut flowers significantly influence our sales. Nowadays with the growing trend towards the use of flowers for multiple reasons.

• Technological: Technology can save time and resources and make the process

more productive. It can enhance the life of cut flowers; make the delivery process swift and reliable. Moreover by

putting technology to good use, orders can also be placed online by setting up an online store.

Porters 5 Entry barriers

• Product differentiation Branding is very unusual in the flower industry; therefore different varieties of cut flowers are chosen as product differentiation

• Switching costs In general, buyers can easily switch to other flower producers.

• Cost Disadvantages, non availability of breeders & skilled labor

• Access to Distribution there is no easy access to growers to the main wholesale markets

Intensity of rivalry

• Growth of the industry, In Pakistan floriculture industry is growing; higher market share can be captured with a low number of varieties.

• Diversity of competitors In Pakistan most growers do not own their farms their profitability is under pressure due to the subnormal rate for production factors on family farms.

• Fixed and storage costs fixed costs increases as the production increases because Storage facilities would be required.

• Exit Barriers in the short run the exit barriers are very high: Changing the crop within a year is expensive due to the high investment in seeds ,Having specialized assets e.g. green house.

Power of buyers• Buyer volume Buyer volumes in total can be large, but from one variety the

volumes are small. In most cases the supply of one grower has to be split up for more buyers.

• Costs “buyer switching relative to firm switching” Buyers can easily switch between growers: the auction facilitates this process.

Many Growers offer substitutes.

• .Buyer information The information from the auction is public; However growers do not have information about the sales from the wholesalers to the retailers.

• Ability of backward integration Backwards integration of wholesalers is low they may not have the required

know-how of farm production.

• Threat of Substitute products Substitute products are plentifully available; the consumer

cannot discriminate between almost similar varieties or colors. On the other hand, a grower cannot easily switch between varieties: the cropping plan is at least one year.

• Supplier Power Suppliers of raw materials such as seeds is not available

locally, unskilled labor is in abundant supply whereas supply of laborers having a know-how cut flowers is very low.