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Feature Article in the July 24, 2004 Issue of Flower News

For Floral Wholesalers, Local Markets Matter!

Drs. Tom & Tim Prince,  Prince & Prince, Inc.,  Columbus, Ohio


Note: This article is based on the experiences of Prince & Prince in conducting marketing research for the floral industry over the past dozen+ years.    We welcome your comments on this article.

In our discussions with floral-industry members at conferences and trade shows, members often ask how national market findings and estimates can be applied to their own particular market.   We caution members of the industry when interpreting national study findings, for the findings may not be representative of their particular market.  This can be especially true in large countries, like the US, where there may be substantial regional and market-specific differences in the overall national data. For example, a trend in one region (say the Northeast) may be off-set by an opposite trend in another region (say the Southwest), and the national data may then show little change.   Our general statement to the floral industry is the following: "Local Markets Matter".

In this reporting, we will show that for the wholesale florist industry segment, the behavior of local markets matter, as the key drivers to customer satisfaction/buying loyalty vary largely from market to market.  These findings, extracted from several of our marketing research studies, exemplify the diversity in florist market behavior throughout several US markets.  The key message for floral wholesalers is to continually focus on the needs of the marketplace, and realize that the key factors that drive florist behavior in one market may not necessarily be the same key driving factors in other markets.  The needs of local markets do matter!

In our private research for wholesale florists, florist shops in a given market area are surveyed, and they provide information about their florist shop, and about the floral wholesalers that service their market. These market studies benefit florists, as they allow suppliers to focus more closely on the needs of the florist marketplace. Although we will not release specific confidential information from these studies, we will disguise the market identity for this information, and show model-based findings across several US markets. Based on our "anonymous" market findings and models, we will demonstrate that the key driving forces underlying florist-buying decisions vary dramatically from market to market.

Our Marketing Models & Methods

In much of our customized marketing research for wholesalers, we measure the perceived performance of wholesalers that operate in a given market, based on ratings provided by randomly-selected florist shops that also operate in that market. Depending on the size of the wholesaler's defined market area(s), we usually obtain survey responses from 100 to 400 florist shops, with each florist shop rating two, three, four, or more wholesalers that service the market. This may result in several hundred, or perhaps a thousand or more independent ratings on wholesale florists, with each "rating" comprising an evaluation of a wholesaler across 20-30 attributes. For any particular market, this collection of market information represents an extremely rich database on which to base management decisions.

In one of our customized analyses of the database, we examine, across the market, the relationship between a wholesaler's performance on a particular product, service offering, or operational policy, and the customer's overall level of satisfaction and level of buying from a particular wholesaler (termed satisfaction loyalty). To derive these relationships, we use Structural Equation Modeling (SEM), a mathematical research tool, that reveals how wholesaler performance on a particular performance factor influences satisfaction loyalty with wholesalers. We call this influence score a derived priority, or a driver to customer satisfaction/buying loyalty. The derived priority (driver) tells us how much florist satisfaction/buying loyalty will increase, on average, if wholesaler performance on a particular factor (e.g. cut flower quality) increases by one unit. From our customized SEM models, we obtain a derived priority score (driver) for each performance factor, with larger numbers indicating bigger drivers to satisfaction/loyalty (See "About Derived Priorities" at the end of this article). This driver information tells us the key wholesaler performances that are currently driving florist-purchasing behavior, and those that are not. We instruct management to focus on the key drivers, for wholesaler performance on the key drivers largely determines wholesaler market share.

Key Drivers Vary

For this reporting, we extracted derived priority scores for three selected performance factors that were common across several P&P market studies conducted for wholesale florists over the past several years. Table 1 shows a comparison of these derived priorities for three performance factors of wholesalers: 1) Personnel/ Salesforce (courtesy, competence, and knowledge of the salesforce), 2) Cut Flower Quality (quality and freshness of cut flowers), and 3) Price/Value (providing value for the price paid, and not being perceived as "over-priced"). The derived priority scores in the table represent the lowest and highest scores for each factor across the various markets studied. Also shown is the range, the percentage change in priority from the lowest and highest scores.

Table 1 shows that the range in the priority scores across the various markets studied is quite substantial. For the Personnel/ Salesforce factor, the marketplace priority ranged from 21 to 46 across the markets, a 119% change among the markets. This means that among the markets surveyed, florist priority on wholesalers' Personnel/ Salesforce more than doubled from one selected market to another.

For the Price/Value factor, the percentage change in priority across the markets was a dramatic 278% (going from 9 to 34). This finding suggests that some wholesaler markets surveyed by Prince & Prince were highly price-competitive, while others were not. For the Cut Flower Quality factor, the percentage change in priority across markets was somewhat smaller, yet still exceeded 50%. Thus, the P&P market data and model analyses suggests that the key factors that drive florist buying loyalty (and wholesaler market share) in one market may be of only tertiary importance in another market, and vice-versa. Thus, the key drivers that attenuate florist satisfaction and purchasing loyalty tend to vary from market to market.

In any given market area, we caution the reader in focusing on only these three performance factors. In much of our customized marketing research, we generally measure between 8 to 12 or more performance factors of suppliers. We have selected these three performance factors only to demonstrate the change in priority (and since they were common across several P&P markets).


Overall, the P&P research findings illustrate the strong diversity in florist marketplace behavior. The findings reveal that a performance factor that has high priority (or low priority) in one market may not have the same high priority (low priority) in other markets. Thus, for the wholesale florist industry, local markets do matter!

At P&P, we attempt to explain the reasoning behind these marketing research findings. In our view, florist expectations are set collectively by the composition of florists in the marketplace, and by the offerings of wholesalers that service the markets. Given the diversity of florist shops throughout the US responding to regional and market-specific consumer demands, and since florist markets tend to be largely serviced by regionally-based wholesalers, florist composition and wholesaler offerings tend to vary from market to market. Thus, the marketplace priorities of florist shops tend to change from market to market.

While there are undoubtedly some commonalties among the florist markets, our research reveals that key differences in florist behaviors do exist among the markets. For many wholesalers that service several geographically-dispersed markets, this overall finding that florist markets differ in priorities is not news. However, we believe that demonstrating the large degree of difference in priorities among markets with actual market data underscores the true diversity of florist market behavior throughout the US. These research findings may provide a challenge to the concept of a uniform national marketing strategy for floral wholesaling in the US, unless one tailors the strategies to the needs of the local markets.

About Derived Priorities. The derived priority score should not be confused with a simple importance score obtained from a 7-point rating scale (e.g. how important is product quality to you?). These simple measures are termed "stated importance" scales, and are used by many marketing research firms. At P&P, we have found that these "stated importance" scales can be somewhat unreliable, and in some cases, misleading. Analysis of this data often tends to show that nearly everything is "highly important", and thus, little management information is gained. The derived priority score or driver, while requiring more sophisticated analytical capabilities of the researcher, is a more discerning measurement, and is based on the behavior of florists in the marketplace (e.g. determining the key factors that actually drive florist satisfaction & buying loyalty with a wholesaler). Stated importance is based solely on what florists say; derived priority is based on actions, what florists do! Thus, the derived priorities define what wholesalers' business performances most drive florists' satisfaction & buying loyalty with a competitor or brand, and they are ranked from highest to lowest driver.

About the Authors. Drs. Tom and Tim Prince, formerly of The Ohio State University, are brothers and co-founders of Prince & Prince, Inc., a leading marketing research specialist in the floral and green plant industries. Prince & Prince has completed more than 50 major marketing research projects and reports for the floral and floral-related industries in the US, and has also conducted floral marketing research in Canada, the United Kingdom, Holland, and Germany. The brothers conceptualize, design, and implement market studies and product tests for floral and green-plant suppliers, floral importers, hardgood suppliers, wholesale florists, retail florists, and floral-industry associations. For more information about their customized marketing research, visit their web site at www.FloralMarketResearch.com.


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