Transcript Cornell Horticultural Business Management and Marketing Program

Marketing Your Horticulture
Service Business
January, 2001
Wen-fei Uva
Senior Extension Associate
Department of Applied Economics and Management
Cornell University
Cornell Horticultural Business Management and Marketing Program
WHAT IS MARKETING?
Max Brunk (1983)
Marketing is Not Just Selling!
To Market is to Create Value;
To Offer a Product or Service Which
Someone is Willing to Pay.
Cornell Horticultural Business Management and Marketing Program
Differentiation
Give your customer a REASON to buy your
products
What are you known for?
3 kinds of sacrifices must be made to win a
differentiation
• Product/service sacrifices - don’t be
everything for everybody
• Attribute sacrifice
• Target market sacrifice
The Marketing 4 Ps
Promotion
Products
Target
Market
Place
Cornell Horticultural Business Management and Marketing Program
Price
Characteristics of Marketing
a Service-Oriented Business
Cornell Horticultural Business Management and Marketing Program
• Services are Intangible
 Customers like to sample, taste, feel, see, hear,
smell before they buy.
 Promotion program should portray the
benefits rather than the service itself
• Services can’t be Separated from the Creator
or Seller
 Production and marketing performed
simultaneously
 Customer’s opinions are formed through
contact with the production personnel
 Often direct sale is the only channel of
distribution
• Services are Difficult if not Impossible to
“Standardize”
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Each “unit” of the service is somewhat
different
Product planning for consistency is
important
• Services are Highly Perishable with
Fluctuating Demand
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Develop new uses for idle capacity during
off-season
Use advertising and creative pricing to
stimulate demand during slack periods
Strategic Marketing Planning for Service
Marketing
Promotion
Products
Target
Market
Place
Cornell Horticultural Business Management and Marketing Program
Price
Target Market Analysis
• Demographic
 Components of population, income
• Market Segmentation
• The psychological determinants
 Attitudes, perceptions, and personality
• Sociological Factors
• Determine why customers buy your service for
each market segment
 Who are your most profitable customers?
 When, where, how and what do they buy?
 Who does the buying?
Top 5 Household Spending on Lawn and
Garden Activities in 1998:
•
Landscaping - $337
•
Water Gardening - $219
•
Lawn Care - $190
•
Tree Care - $145
•
Flower Gardening - $102
Who is Buying Lawn Care/Landscape Services
% Household Purchasing
Sex
Male
Female
Age
18-29
30-49
50 & Older
Education
College
High School
Grade School
Occupation (top three)
Business
Retired
Professional
Life Cycle
Married, no child
Married, with child
Single
Sep./Div./Widow
14
13
5
12
18
15
13
5
19
17
16
19
12
8
13
Most Important Reasons When Deciding on Who to Hire for
Landscape, Lawn and Tree Care Services
Reason
%
Good references and reputation
67.4%
Satisfaction guaranteed
39.5%
Provides free estimates
33.8%
In business for a number of years
32.9%
Locally owned and operated company
32.4%
Insured and bonded
27.9%
Target Market Analysis
• Market trends
 Economic outlook, disposable income, less
time, more emphasis on convenience,
internet use.
 Ex: Minority buying power nearly double in
the 1990s (Asian consumers - 124.8%,
Hispanics consumers - 118% and U.S.
consumers overall - 70%)
Average Household Spending
on Lawn and Garden Activities
$900
$855
$800
$710
$700
$667
$671
$619
$647
Dollars
$600
$500
$452
$385
$400
$353
$342
$309
$303
$300
$200
$100
$1993
1994
1995
Average household spending
1996
1997
1998
Average spending when hiring profesionals
Households Hired Landscape, Lawn, and Tree Care
Professional Services
30
25%
26.4
24%
25
21.9
23%
22.5
22.3
24%
22.4
21.4
23%
23%
20.3
20
22%
22%
%
Millions
22%
15
21%
10
20%
20%
20%
5
19%
0
18%
1993
1994
1995
1996
1997
1998
1999
Product (Service) Planning
• Define your products
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What service will be offered?
What will be the breadth and depth of the product mix?
How will the services be positioned?
What attributes will the service have?
• Expanding product mix by trading up or down
Product (Service) Planning
• Quality is critical
 Defined by the consumer not the provider
 Consistency - Standardization training.
• Branding:
 Include a tangible good as part of the brand image
Tie in a slogan with the brand - Allstate
Use a distinctive color scheme
Price Your Service
• Require more creativity and skills
• Most services are highly differentiated
• Customers may perform some services
themselves - need know elasticity of demand
• Know Your Costs!!
Fixed costs: cost items that do not vary with production volume.
Examples are building rent, property taxes, and family living
expenses.
Variable costs: cost items that vary proportionately with
production volume. Examples are plant materials and hourly
wages.
Costs and Revenue
Price
(Revenue)
Contribution
Variable Costs
Break-even
Fixed Costs
Profit
Place - Distribution Channel
Traditionally sold directly from producer to consumer
or business user - No middlemen
Employees are the most important asset
Broaden distribution
 Convenient “Location”
 Use of intermediaries
Train Your Employees
Some of Successful Customer Service Techniques
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Double check
Pretend it’s you
Get involved
Stay focused/Listen
Do something extra
Smile - show your teeth
Ask questions/Listen
Use a complete sentences
Care
Laughter
Promotion Strategies
5 Components of a Promotion Program:
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Personal selling
Advertising
Sales promotion
Public relations
Direct marketing
Promotional Strategies:
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Visualization
Association
Physical representation
Documentation
Strategies to Create Tangible Images
 Display Garden
 Open House - bring a friend
 Newsletter
 Employees
 Professional and Comfortable Office Setting
What do Customers Want?
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Tangibles
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Reliability
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Responsiveness
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Assurance
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Empathy
Customer for Life
Know what the customer wants and needs
Exceed their expectations
Delight your customers!
Thank You