Peek No : 10
September 17, 2003

Week's Peek | Wish I were | BrandFact | This Week that Age | Make us Work 4 you | Insight

Hello!

Business cycles get influenced by events of micro and macro nature. The derived outcome of each event makes or mars the prospects on a larger scale. The flowers industry is a classic case of an industry with its fortunes dependent on micro and macro-economic events. In short, the dynamics of the flower industry offer food for thought to a serious economic observer or a sector analyst.

We cherish a deep respect for this industry, given the immense learning potential it offers. This is why we now bring you a peek into this fascinating industry.

Consumer Credit

The Fed Reserve reported that July's consumer credit outstanding rose by $6.0 billion. The pace of net credit extensions rose by 3.7% in July, which is relatively consistent with recent months. In July, revolving credit posted a small increase -- which suggests that consumers continued to take on very little credit card debt and/or paid off more of their revolving debt -- while non-revolving credit grew by $5.7 billion in July.

Export and Import prices

The U.S. Import Price Index increased by 0.2% in August because of the 3.9% jump in the prices of imported petroleum. On a year-over-year, import prices increased by 2.1% in August. Export prices declined by 0.1% in August when compared with the prior month. On a year-over-year basis, these prices are up by a marginal 0.9%.

Nonfarm productivity

Nonfarm-sector productivity rose by a strong 6.8% in the second quarter. This rise comprises a rise in output and a drop in hours. This performance is indicative of the economy undergoing a fundamental transition.

Happy Peeking!

Editorial Team
Marketspeek
Executive Editor - Dr. Sharon Livingston
Editor - Vijay

Week's Peek

Flower Industry – America The annual retail sales of flowers in the US is set to cross $ 20 billion. The US is also the world’s largest market for floriculture and environmental horticultural products. The gross value of this market is estimated to have crossed $50 billion. The dominant growing pattern is the bedding plants. This category of growth is followed by potted flowering plants and foliage. Cut flowers have the least patronage of US based flower growers. The reason for the diminished attention is the excessive imports seen under the cut flowers category. The supply chain of the American flower sector comprises:        -Retail florist shops        -Supermarkets selling flowers        - Nurseries and garden centers        - Wholesalers There are more than 25,000 retail florist shops in the US. The countries exporting flowers to US are Colombia, Ecuador and Netherlands. Imports comprise more than 65% of fresh cut flowers sold in the US. Within the US, California is the largest flower growing State. This State accounts for more than 65% of the total flowers grown in the US

Vital Statistics - Flower More than 80% of the flower-purchases made during Christmas are by women with the balance (around 20%) purchased by men. The preferences of women have been seen to be drastically different from preferences of men. Women have shown excessive preference for soft colors such as pink, purple and other pale colors. Men have been seen to like strong colours like red and yellow. Market assessment studies indicate that almost 25% of the flowers are purchased on impulse. In the US, Christmas remains the top flower-purchasing holiday. Flower-purchase made during Christmas is distantly followed by purchases made during Mother’s Day and Easter. In general, flower-purchases are made in person. Of late, with the growing acceptance of the Internet, order placements through alternative modes have gained momentum. But the in-person mode of purchase dominates the pack, with a share of more than 85% of the total purchases compared to Internet or phone based purchase.

Analysis - Flower

• The long-term growth of the flower industry of the US depends on its ability to position flowers as the best way to express inner feelings. The flower gifting industry competes with greeting cards, low cost trinkets and other curios. The prospects of the industry are directly proportional to the level of acceptance of flowers as a good feelings-conveyor.

• The emergence of alternative order placement vehicles such as the Internet and the telephone shows the convergence of gifting with browsing. Florists should develop destination websites (the nearest equivalent to the physical store) to tap the fullest potential of proliferation of web-based order placements.

• The “NO-SPECIAL-OCCASIONS” purchase of flowers has matured as an “occasion” to watch. The flower industry can benefit better upon inventing more frequent but extremely personal family events as reasons to buy flowers. Examples: Child scoring great marks at school, mom’s successful attempt of a new recipe at home, etc can be promoted as occasions for purchase of flowers.

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Wish I were

Who is our Entrepreneur of the Week? Here's a clue in her own words: ‘‘I was the first person in the United States with a three-dimensional chocolate rose!’’ If you think that is unusual, read on for more. Other specialty products in her repertoire include chocolate lipstick, gourmet popcorns laced with a variety of chocolates and chocolate pretzel nuggets dusted with edible gold!

Meet Loretta Kaminsky, founder of Lou-Retta's Custom Chocolates. Makers of gourmet gift baskets and custom created chocolates for companies such as Dean Witter, Prudential Bache, Trans America, and the Japan Travel Bureau.

And how did she get started? “I went to the bank and they practically laughed at me. My husband, a lawyer, had to sign for my note", she says. Not surprising considering that she was a woman and one who had no formal business training at that.

The dice seemed loaded against her in other ways as well. In 1972, she had been diagnosed with breast cancer and had to undergo a mastectomy. But neither offical apathy nor personal trauma could keep her down. When she discovered the joys of baking and chocolate-making, she soon baked her very own `sweet' story of success. One that flourished for over two decades.

She often had to survive by finding her own way to make things happen. As she had only limited marketing funds, she called The Buffalo News and requested an article about her new business. She clipped the resulting article, sent it to USA Today and was rewarded by an article in the Valentine’s Day edition in 1986.

‘‘Now Lou-retta’s was credible,’’ Ms. Kaminsky said. ‘‘I started getting phone calls. The phone rang off the hook.’’ As Lou-retta’s customer base grew larger, Ms. Kaminsky enlisted the help of her daughter, Ellen Bradbury, to run the company.Through help of a web site, they went on to fill orders from as far as England and Australia.

All too soon, they received an offer that was just too good to be turned down. After 20 years of production in Buffalo, Lou-Retta's Custom Chocolates was sold to Art CoCo, a 13-year-old chocolate novelty manufacturing company. The famous name and the amazing quality will of course continue under the new ownership. Not bad going for someone who could not even get a loan in her own name to start off!

Well, what's her secret? ‘‘The way to be successful, for a woman, is to learn to walk the fine line between doormat and barracuda,’’ she says. ‘‘And when you have found that middle ground, you will be a successful woman entrepreneur.’’ Now who better to say this than Loretta Kaminsky!

For further reading:

http://www.smallbiz.suny.edu/info/news2002/news61402/news61402.html

http://buffalo.bizjournals.com/buffalo/stories/2003/07/07/story7.html

http://www.maggieinc.com/Chris.htm

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BrandFact

Gabrielle "Coco" Chanel launched her perfume in 1921. She named it "Chanel No. 5." She chose number five because it was her lucky number.

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This Week that Age

16th September, 1908 -General Motors was founded by William C. Durant.

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Make us Work 4 you

Our research team will be glad to work on a research assignment for you. Download the proposal requisition form and commission our cost-effective secondary research services.

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Insight

As soon as you start to pursue a dream, your life wakes up and everything has meaning.

- -Barbara Sher

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Disclaimer
The information presented in this Newsletter is not based on any primary research undertaken exclusively for this purpose; it is based on secondary sources of information, as current as the researchers were able to collect from the sources. However, should any specific client need up-to-date information on this (or any other) segment, they may commission Executive Solutions to do such research.