Current Market Trends of the Flower Shop Business - Essay Example

Business Skills for Proposals and Pitches Table of Contents Introduction 3 Current Market Trends 3 Market Analysis of Flower Shop Business 4 SWOT Analysis 4 PESTEL Analysis 4 Target Market 5 Porter’s Five Forces Analysis 5 Competitor Analysis 6 Marketing Mix 6 USP of Flower Shop Business 7 Marketing Plan 7 Conclusion 8 Recommendation 8 Reference List 10 Introduction Floriculture is regarded as one of the fastest growing segment in UK agriculture. The market for the flower shop business has grown constantly in the previous decade but recently it has faced slower expansion in demand and it has exercised downward pressure/force on the prices (Larson, 2013). In Coventry, UK, there are many florists who deliver flowers through their courier service or through the local florists. This include baskets, bouquets which are hand tied, and traditional bouquets in Coventry (Lillianroseflowers, 2015). It has been observed that with rise in the disposable income of the household and individuals around the world, expenses are also mounting and therefore the people with less income are also purchasing the floriculture products to decorate or beautify their homes. Those who run flower shop business in Coventry UK also offer an extensive variety of package from stylish and simple reception arrangements to the corporate clients. They provide an efficient, professional and reliable service to the customers (Gilesflorist, 2015). Current Market Trends Floriculture industry is considered as a main global industry in developed as well as developing countries. Worldwide trade volume is approximated to be over $100 billion annually. The main consumer markets are UK, Germany, US, France, Japan, the Netherlands, Italy and Switzerland (Ravinath, 2007). People from the entire world make use of floriculture products initially for traditions and customs and then for other purpose (Ravinath, 2007). Organisations and businesses also exploit these products for the purpose of decorations. In the Coventry, UK, the major part of potted plants and flowers are sold through Sainsbury, Waitrose and Tesco’s supermarkets (Ravinath, 2007). In the developed countries, there are artists and local florists selling decorations and ornamentals. The price of the flowers generally goes high during the time of special occasions. One of the ways for the business of flower shop to grow is by establishing affiliations with the event organiser where they can offer the flowers according to the event and also arrange it as per the choice of the client. This type of affiliation paves a means for the flower shop companies to grow as well as the growth possibility for this type of business is high (Ravinath, 2007). Market Analysis of Flower Shop Business SWOT Analysis Strengths: The strengths of this new flower business may incorporate the variety of flowers available in the shop. The company will also provide free shipping on its entire orders. These will be regarded as the positive attributes which will differentiate them from the competitors (Ravinath, 2007). Weaknesses: If the new flower shop will charge higher price than its competitors then it will be considered as their weakness because the customers will not be willing to pay more for the new business and they will look to another shop for the better deal. It will negatively affect their sales (Ravinath, 2007). Opportunities: Most of the people are prepared to make investment in interior decoration and exterior decorations by making use of fresh flowers. This will be an opportunity for the new floriculture company to grow as well as expand its operation (Ravinath, 2007). Threats: The regulatory issues and the economic factors could negatively affect the revenue goals of the new floriculture business. The changes in the global/international regulations and rules are negatively having the impact on floral trade (Ravinath, 2007). PESTEL Analysis Political: Government instability will adversely affect the floriculture business and the diplomatic/sensitive relations of the Government will also affect the exports of the flower business. Economical: Tax benefits are provided to novel export oriented companies of floriculture in terms of income tax vacations/holidays as well as exemption from particular import duties. Therefore, the new floriculture business will get advantage from these benefits. Higher level of national income will also boost the demand for the floriculture products (Dreistadt, 2001). Social: At present, floral beautification is the budding social trend. Most of the people are prepared to make investment in interior decoration and exterior decorations by making use of fresh flowers. This will be an opportunity for the new floriculture business to grow and expand its operation (Dreistadt, 2001). Technological: The floriculture industry is applying various advanced technology. In the UK, the technological development in the floriculture industry is generally high. Due to the progress of the information technology, the business of flower shop is shifting on to the online marketing and sales. This will provide the new flower shop business the competitive advantage through cutting the labour cost (Dreistadt, 2001). Legal: The changes in the global/international regulations and rules are affecting floral trade. At present, there are no definite legal actions in relation to the floriculture industry. Therefore, the floral business is presently functioning through self-discipline. However, there are some regulations such as MPS-GAP, FFP, etc which the new floral business will have to corroborate if the business is to do exporting (Dreistadt, 2001). Environmental: The pressure or strain from environmental authority is less in the floriculture industry. However, the workers have to take utmost care of their health because of the use of different pesticides and chemicals in the flowers. They also need to be cautious of the type of chemicals they are using because flowers are used and offered in the form of gifts in certain occasions. Therefore, the new floral business will need to take utmost care of the types of chemicals used and also requires being environmentally friendly (Dreistadt, 2001). Target Market The target market for this new floral business will be the gift givers and the lovable people who are interested in interior decoration. The new business can reach this segment through radio commercials, print-ads and online marketing. Porter’s Five Forces Analysis Suppliers’ bargaining power: The suppliers’ bargaining power is considered as low in the floriculture business. This is because there is vast number of suppliers accessible as well as the producers are also well informed about the product of suppliers and market. Most of the businesses are employing services from the professional consultants. It is scrutinized that suppliers can reduce quality or raise prices independently as well as the products required are also not ordinary. In most of the cases the substitutes are also easily available. Buyers’ bargaining power: The bargaining power of the buyers in the floriculture industry is high. This is because the buyers have several alternatives and they can shift their preference from the small florist to the supermarket such as Sainsbury, Asda, K-Mart, etc. The supermarket chains are viewed as mass market and these are price sensitive as they offer discount on their products. There are various substitutes which are available in the market and the buyers cannot differentiate between almost alike colours or varieties. Barriers to Entry: The barriers to entry is considered as high for the new entrant because the new entrant will require huge sum to start the business and also the new business will have to face cost disadvantages as the existing participant may be offering their product at low cost. The new business will also face difficulty in terms of its distribution channels. The new entrant will deal with the obstacle by enhancing its brand image, creating associations with the associated products and by utilising patents (Frynas and Mellahi, 2015). Threat of substitutes: The threat of substitute is high because there are various substitutes accessible and the customers can easily switch from one product to other. Therefore it will become difficult for the new business to raise their rates and make profits. Rivalry among the competitors: The rivalry among the competitors is low due to the reason that there are many competitors and they are also providing equally attractive services and products. So, the customers can switch easily if they will not get good deal from the new florist (Frynas and Mellahi, 2015). Competitor Analysis There are many well established floral businesses in the Coventry UK such as Graham Giles Florist, Lillian Rose Flowers, Hubbards Florist Coventry, etc. Graham Giles Florist offers an extensive variety of package from stylish and simple reception arrangements to the corporate clients. They provide flowers for the wedding purpose, funeral purpose and also for the corporate purpose. It also provides its service to the international clients and is known for its efficient and reliable service (Gilesflorist, 2015). Marketing Mix Product: The products of the new floral business will be arrangements of fresh flowers, bouquets, vases, plants, hampers and gift baskets and the additional product like sweets and chocolates. The bouquets can be designed according to the customer’s choice. Price: The new flower business will offer the product at competitive price. Prices will be displayed on the products. Price can also vary depending on the requests of the customers when they are customising the order. Place: The new floral business can operate through their retail store in a busy street to draw more customers. They can also take online orders and make more exposure to the potential customers. If there will be parking area in front of the shop then it will be beneficial for the business as most of the people don’t travel without their personal transport system. Promotion: They can advertise and promote their product through outdoor signage, front flower displays on the shop, advertising through local radio commercials, business card and flyers can be distributed through the letter box, local publicity, in store display of products, and also by sponsoring the events (Hunter, 2012). USP of Flower Shop Business The Unique Selling Proposition (USP) of the new floral business would be innovative selling and designing style. Arrangements of superior quality fresh floral by making use of multiple flowers, design styles and containers would help the business to be different from its competitors. Making a storefront which resembles the art gallery accompanied with fresh floral arrangements presented like art would be a USP of the new floral business. The business can also become unique by offering some additional products like gourmet chocolates as well as real artwork from the local artists. All these practice will help the business to grow in the future (Abrams, 2003). Marketing Plan The marketing plan for the first year of operation is as follows: The market research will be carried out initially to know about the importance of floral business in the minds of customers. Then in the second and third month needs of customers will be assessed to know their preferences about the types of flowers for different occasions. In the third, fourth and fifth months level of competition will be assessed so, that this new2 business could provide better service and products from their competitors. Marketing objectives will be set in the sixth and seventh month. Budget will be estimated in the eighth and ninth month. The starting costs of new floral business comprise of inventory required to create furnishings, flower arrangements, installation fees and appliances. The inventory required for the business to produce the floral arrangements consists of: boxes, ribbon, pins, scissors, envelops and cards. These will be the preliminary inventory as well as will be regarded as on-going expense. There will be also an installation cost for the internet services and the phone. Arrangements of furniture such as stainless steel table, flower cooler, backless stools, chairs for the waiting room, computer, phone, monitor, etc will be done in the ninth and tenth month. For the supply of flowers the new business will obviously require suppliers apart from cultivating their own flower. So, the negotiation will take place in the last two months. Apart from it, the ongoing cost of the new floral business will have to make up with its flower inventory. The flowers will required to be change daily and also must be updated daily to avoid the complaints of old flowers (Beener, 2008). Conclusion The main objective of this report is to focus on the current market trends of the flower shop business by taking into consideration the target market of it. Macro environment investigation helped to know that what factors are having their impact on the flower shop business in Coventry UK. The launch of new business will be successful in the Coventry UK as people are very much fond of flowers and well decorated bouquets for the purpose of different occasions and also for the decoration purpose. The possible drivers of growth will be innovative selling and designing style and the arrangements of superior quality fresh floral. Offering some additional products like chocolates and gifts will also help the business to achieve success. The demand for the flowers and bouquets is high in Coventry UK as it is needed for wedding purpose, funeral purpose and also for the corporate purpose. Higher level of national income will also boost the demand for the floriculture products. The new floral business will need to take utmost care of the types of chemicals they will use in the flowers to make it remain fresh. Recommendation Short-term action: There is a scuffle going on especially in the floriculture industry and most of the small florists who have just started their business are losing. The main reason behind this is that they usually don’t have enough knowledge or time to match themselves with the current marketing tactics and trends. Therefore, the short-term action will be adopting some unique strategy that will differentiate them from their competitors. The new business doesn’t have their own delivery van to deliver the products to the customers. Therefore, they can either take a car on lease or could also purchase a new car for the business purpose. Long-term action: The long-term action will be their presence on the social media. This is because nowadays, almost all the customers are very much active on the social sites. So, having their presence on social media will help them to attract more customers and also to grow. The new flower business should also launch its own website as it will help them to track orders online and also receive feedback from the customers about their services. Having their presence on the social media will help the new floral business to know their position as compared to the competitors. Reference List Abrams, R., 2003. The successful business plan: Secrets and strategies. California: The Planning Shop. Beener, S.N., 2008. How to open and operate a financially successful floral and florist business both online and off. London: Atlantic Publisher. Dreistadt, S.V., 2001. Integrated pest management for floriculture and nurseries. California: UCANR Publication. Gilesflorist., 2015. Graham Giles Florist: About Us. [online] Available at: < http://www.gilesflorist.co.uk/about-us/> [Accessed 7 May 2015]. Frynas, J.E. and Mellahi, K., 2015. Global Strategic Management. United Kingdom: Oxford University Press. Hunter, N., 2012. The art of floral design. Connecticut: Cengage Learning. Larson, R.A., 2013. Introduction to Floriculture. New York: Academic Press, Inc. Lillianroseflowers., 2015. Lillian Rose Flowers: Flowers in Coventry delivered by local florists. [online] Available at: < https://www.lillianroseflowers.co.uk/coventry.htm> [Accessed 7 May 2015]. Ravinath, D., 2007. Floriculture: A viable business. New Delhi: Excel Books India. Read More