what to do when a big box store moves to town marketing strategies lawrence s. martin & dr....

What to do When a Big Box What to do When a Big Box Store Moves to TownStore Moves to Town

Marketing StrategiesMarketing Strategies Lawrence S. Martin & Dr. Robin G. BrumfieldLawrence S. Martin & Dr. Robin G. Brumfield

National Farm Management ConferenceNational Farm Management ConferenceRochester, MinnesotaRochester, Minnesota

June 12-14, 2007June 12-14, 2007

A Tale of Two Cities....A Tale of Two Cities....Both Have:Both Have:

A New Big Box Two Established Greenhouse/Nurseries

A Tale of Two Cities…….A Tale of Two Cities…….

Two years after Home Depot comes to town.....Two years after Home Depot comes to town.....

One grower goes One grower goes

The other grower? The other grower?

A Tale of Two Cities…….A Tale of Two Cities…….

How????? How?????

Why???Why???

Marketing Trends:Marketing Trends:

How are greenhouses How are greenhouses (wholesale and/or retail) (wholesale and/or retail) coping with coping with changing customer preferences changing customer preferences while at the same time while at the same time competing with and/or profitably competing with and/or profitably selling to the Big Boxes?selling to the Big Boxes?

Marketing Trends: Marketing Trends:

Our work is meant to help growers formulate Our work is meant to help growers formulate their own: their own:

StrategiesStrategies

ConceptsConcepts

Ideas Ideas

...to not only SURVIVE; but, to ...to not only SURVIVE; but, to THRIVETHRIVE in the in the current, competitive market.current, competitive market.

Materials and Methods: Materials and Methods: Marketing Strategies Marketing Strategies

Visited over 80 growersVisited over 80 growers Collected data on:Collected data on:

Maintaining market shareMaintaining market share Promotional plans & Promotional plans &

programsprograms Product mixProduct mix Value addedValue added Agri-entertainmentAgri-entertainment AdvertisingAdvertising Pricing policiesPricing policies DemographicsDemographics Market channels Market channels

Objective #1Objective #1

Determine how Determine how the Green the Green Industry is Industry is responding to responding to current trends current trends & changing & changing customer customer preferences.preferences.


What can What can producers producers learn from learn from our our research research results?results?


How can How can they they incorporate incorporate these these results into results into their their existing existing marketing marketing programs?programs?

Marketing Trends: Marketing Trends: The Big BoxesThe Big Boxes

FACT: The Big FACT: The Big Boxes are here Boxes are here to stay!to stay!

Big Boxes: Big Boxes: Help or Hindrance?Help or Hindrance?

Big Boxes are Big Boxes are Price Setters & Price Setters & Push Prices Push Prices DownDown

Contributing to or Contributing to or causing…………causing…………

Shake-Outs:Shake-Outs: elimination or

winnowing out of some competing businesses as a result of intense competition.


Bankruptcies: Bankruptcies:

A A bankrupt bankrupt business is one business is one which has been which has been legally declared legally declared financially financially insolvent.insolvent.


Consolidation:Consolidation: The merger of two The merger of two

or more or more commercial commercial interests or interests or corporations. corporations.

Big Boxes’ low prices Big Boxes’ low prices

are sometimes are sometimes BELOWBELOW

break-even costs. break-even costs.


When a When a Big BoxBig Box store moves store moves into town most into town most reactive/resulting strategies reactive/resulting strategies boiled down to: boiled down to: ““Snooze & Loose”Snooze & Loose”

or or ““Change & Prosper.”Change & Prosper.”


Producers who:Producers who:

ChangedChanged or modified their long or modified their long established marketing histories established marketing histories

not only stayed/remained solventnot only stayed/remained solvent

but increased their sales in the but increased their sales in the shadow of the Big Boxes.shadow of the Big Boxes.

Tale of Two Independents: Tale of Two Independents: “Snooze & Loose”“Snooze & Loose” or or “Change & “Change &

Prosper”Prosper”

Qualified as “Easy Prey” for Big Boxes”Qualified as “Easy Prey” for Big Boxes” A typical Main St. Merchant doing A typical Main St. Merchant doing

“business as usual” for one or more “business as usual” for one or more generations.generations.

Invested little profits back into businessInvested little profits back into business Complacent. Store Fronts neglected.Complacent. Store Fronts neglected. Cracked Sidewalks. Litter in the gutters. Cracked Sidewalks. Litter in the gutters. Parking Meters answer to limited parking. Parking Meters answer to limited parking.

Tale of Two Tale of Two Independents: Independents: “Snooze & “Snooze &

Loose”Loose” Half-hearted Promotions. Short Hours.Half-hearted Promotions. Short Hours. Layout, Lighting, displays, & merchandizing Layout, Lighting, displays, & merchandizing

virtually unchanged since construction. virtually unchanged since construction. Poor or non-existent signage. Slow to catch-on Poor or non-existent signage. Slow to catch-on

to new trends and/or follow the customer’s to new trends and/or follow the customer’s changing needs and preferences. changing needs and preferences.

Business generally still good enough to allow Business generally still good enough to allow owners to earn a good living. owners to earn a good living.

Bankrupt Bankrupt Frank’sFrank’s NurseryNursery

Former Former Frank’s Frank’s NurseryNursery to sell at but 40 of to sell at but 40 of its former garden centers. its former garden centers.

The Troy, Michigan company began as a The Troy, Michigan company began as a roadside fruit stand in 1949. roadside fruit stand in 1949.

At the time ofAt the time of Frank’s first Chapter ll Frank’s first Chapter ll petitionpetition it had it had 257 stores in 15 states.257 stores in 15 states.

Bankrupt Bankrupt Frank’sFrank’s NurseryNursery

Reorganized Reorganized under its 2nd under its 2nd Chapter 11 in 2 Chapter 11 in 2 years.years.

Will attempt to Will attempt to develop 40 develop 40 parcels of land parcels of land former garden former garden centers.centers.

Frank’s could not Frank’s could not competecompete

In a market where customers patronize:In a market where customers patronize: Upscale local greenhouse and garden Upscale local greenhouse and garden

centers with centers with better quality.better quality.

Or Or Big Box Stores who pandered Big Box Stores who pandered cheaper cheaper

pricesprices. . A sad end for A sad end for Frank’sFrank’s. .

Frank’sFrank’s Closed it’s Doors Closed it’s DoorsLesson learned: Lesson learned:

Frank’s Frank’s retail operations had retail operations had neither the neither the cheapest pricescheapest prices nor nor the the best qualitybest quality product: a product: a death sentence in today’s death sentence in today’s competitive Marketplace.competitive Marketplace.

Marketing Trends: Marketing Trends: The Big Boxes have forced producers The Big Boxes have forced producers

to re-think their marketing strategies.to re-think their marketing strategies. Successful producers are competing Successful producers are competing

by:by: Knowing their costsKnowing their costs Developing a niche.Developing a niche. Making lemonade out of lemons.Making lemonade out of lemons. Listening carefully to what the Listening carefully to what the

customer wants.customer wants. Adding value/service.Adding value/service. Making buying an experience.Making buying an experience.

Frank’sFrank’s Closed Doors Closed Doors Re-opended in Allentown, PARe-opended in Allentown, PA

Make Lemonade out of Lemons:Make Lemonade out of Lemons:

Frank’sFrank’s retail garden center in Allentown, PA retail garden center in Allentown, PA was purchased by was purchased by Dan SchantzDan Schantz Greenhouses. Greenhouses. Dan SchantzDan Schantz (owner/operator of a local (owner/operator of a local established and very successful garden established and very successful garden center) added the his former competitor’s center) added the his former competitor’s Allentown facility to his nursery business. Allentown facility to his nursery business. In the same garden center where In the same garden center where Frank’s Frank’s withered on the vine, withered on the vine, Dan SchantzDan Schantz increased increased his annual sales by 30%.his annual sales by 30%.

Frank’s Frank’s Closed Doors Closed Doors Re-opended in Allentown, PARe-opended in Allentown, PA

Both nurseries operated in the shadow of Home Depot Both nurseries operated in the shadow of Home Depot (less than ½ mile away)!(less than ½ mile away)!

Dan sells retail/wholesale in his greenhouse/nursery and Dan sells retail/wholesale in his greenhouse/nursery and has managed to wholesale to his Home Depot neighbor!!has managed to wholesale to his Home Depot neighbor!!

Dan’s antidotal response to his successful conversion of Dan’s antidotal response to his successful conversion of the former bankrupt Frank’s Garden Center? How was he the former bankrupt Frank’s Garden Center? How was he able to make lemonade from lemons?able to make lemonade from lemons?

““Marketing is everything; and, everything is Marketing is everything; and, everything is marketing!!”marketing!!”

Frank’sFrank’s Closed Doors Closed Doors Re-opended in Allentown, PARe-opended in Allentown, PA

WhereWhere Frank’sFrank’s marketing plan could not marketing plan could not compete, Dan Schantz thrived, expanded, and compete, Dan Schantz thrived, expanded, and filled the void created by the Frank Bankruptcy. filled the void created by the Frank Bankruptcy. in a changing marketplace where customers in a changing marketplace where customers patronized:patronized: Upscale local greenhouse and garden Upscale local greenhouse and garden

centers that boasted centers that boasted better quality.better quality. Or migrated to the Big Box Stores who Or migrated to the Big Box Stores who

pandered pandered cheaper pricescheaper prices. .

A sad end for A sad end for Frank’sFrank’s became a success became a success

story forstory for Dan Schantz GreenhousesDan Schantz Greenhouses. .

Competing Against the Competing Against the Big BoxesBig Boxes

What Can You What Can You Do?......... to Stay Alive, Do?......... to Stay Alive, Compete, Thrive?Compete, Thrive?

Do what the big boys Do what the big boys can’t do:can’t do: Sharpen your sales Sharpen your sales

skills and your sales skills and your sales staffstaff

Are your sales people Are your sales people courteous, engaging, courteous, engaging, knowledgeable, knowledgeable, energetic and helpful?energetic and helpful?


The Best Offense is a Good DefenseThe Best Offense is a Good Defense A leaning curveA leaning curve A re-evaluation of the marketA re-evaluation of the market Recognize the Consumer Driven MarketRecognize the Consumer Driven Market Listen to the customerListen to the customer A “return to the basics”A “return to the basics”

Competing against the Competing against the Big BoxesBig Boxes Review the Basics……Review the Basics…… Educate your buyers about Educate your buyers about your:your:

QualityQuality ValueValue ServiceService ConvenienceConvenience Selection (relative toSelection (relative to

the competitor’s)the competitor’s)

Shift from producer to Shift from producer to consumer driven consumer driven

marketmarket Business Hours Business Hours

that customer’s that customer’s need: need: Nights Nights WeekendsWeekends Thursday nights.Thursday nights.

Make shopping an Make shopping an experience.experience.

Shift from producer to Shift from producer to consumer driven consumer driven

marketmarket Pre-Packaged and/or Pre-Packaged and/or

Free Potting StationsFree Potting Stations

First Popular with First Popular with Apartment/Condo Apartment/Condo CustomersCustomers

Now finds its way Now finds its way onto the front/rear onto the front/rear porches of Suburban porches of Suburban “Mc-Mansions“Mc-Mansions””

ENTERTAINMENT/ EVENT ENTERTAINMENT/ EVENT SHOPPINGSHOPPING

Retail/Wholesale Retail/Wholesale customers want a customers want a shopping shopping experience. experience.

““Spring Open Spring Open Houses” are as Houses” are as much much entertainment as entertainment as markets for your markets for your products.products.

Bill and Meg BitterBill and Meg Bitter In one of the wealthiest counties in New Jersey.In one of the wealthiest counties in New Jersey. On a country road not heavily traveled.On a country road not heavily traveled. Hired a concert violinist and served caviar and Hired a concert violinist and served caviar and

exotic foods for their Spring Open House (an exotic foods for their Spring Open House (an annual social event in his community)…..and a annual social event in his community)…..and a huge success. huge success.

The local church sold food avoiding the needs The local church sold food avoiding the needs for food/health certs. No one minded paying for food/health certs. No one minded paying for the food as proceeds went to the church. for the food as proceeds went to the church.

A Win-Win for all.A Win-Win for all.

ENTERTAINMENT/ EVENT ENTERTAINMENT/ EVENT SHOPPINGSHOPPING

Corn mazes pick-Corn mazes pick-your-own your-own pumpkins, cider, pumpkins, cider, apples, and the like. apples, and the like.

Halloween is the Halloween is the 2nd-largest 2nd-largest decorating holiday.decorating holiday.

55.8% celebrate 55.8% celebrate Halloween.Halloween.

Spending an Spending an average of $40+ average of $40+

ENTERTAINMENT/ EVENT ENTERTAINMENT/ EVENT SHOPPING: OTHER IDEASSHOPPING: OTHER IDEAS

““Chili cook-off” or a Chili cook-off” or a neighborhood women’s neighborhood women’s bake sale where proceeds bake sale where proceeds go to the local church go to the local church and/or charity. and/or charity.

Petting zoos are in vogue. Petting zoos are in vogue. Kube Pak and Yoder Bros. Kube Pak and Yoder Bros.

have “field days” & have “field days” & “educational seminars” for “educational seminars” for wholesale customers in wholesale customers in New Jersey.New Jersey.

The Big Boxes have made us The Big Boxes have made us re-think our marketing re-think our marketing strategiesstrategies

Develop your niche. Develop your niche. Do what you do best.Do what you do best. Listen carefully to what your Listen carefully to what your

customer wants.customer wants. Don’t reinvent the wheel.Don’t reinvent the wheel. Get back to basics. Get back to basics. Exploit your comparative advantage.Exploit your comparative advantage.

What’s happening Now? What’s happening Now? Take from the Past, Take from the Past,

Add to the FutureAdd to the Future Try to “Wow” your customers with ideas and Try to “Wow” your customers with ideas and

concepts that portray your products in “new” ways. concepts that portray your products in “new” ways. Go back to traditional, familiar, themes and faces… Go back to traditional, familiar, themes and faces…

even nostalgia.even nostalgia. Hollywood continually remakes smash hits of Hollywood continually remakes smash hits of

yesteryear.yesteryear. If the formula works…it’s just good business and If the formula works…it’s just good business and

common sense to re-use or recycle it. common sense to re-use or recycle it. It makes sense to go with something tried and It makes sense to go with something tried and

tested.tested.

The Bottom Line:The Bottom Line:

Marketing that employs nostalgic Marketing that employs nostalgic sentiments may induce Baby Boomers to sentiments may induce Baby Boomers to give you a second look. give you a second look.

Sparked by “warm and fuzzy” - products, things, Sparked by “warm and fuzzy” - products, things, experiences that include friends and family.experiences that include friends and family.

Boomers are flush with cash and influential.Boomers are flush with cash and influential. Boomers encourage their kids to use their favorite Boomers encourage their kids to use their favorite

brands,……a whole new and impressionable brands,……a whole new and impressionable generation getting to know, like, and gravitate to generation getting to know, like, and gravitate to the same spending habits of their parents.the same spending habits of their parents.

Contact InformationContact Information

Dr. Robin G. BrumfieldDr. Robin G. Brumfield

Professor and Extension SpecialistProfessor and Extension Specialist

Rutgers UniversityRutgers University

55 Dudley Road55 Dudley Road

New Brunswick, NJ 08901-8520New Brunswick, NJ 08901-8520

Phone: 732-932-9171 ext. 253Phone: 732-932-9171 ext. 253

E-mail: E-mail: [email protected]

Home page: Home page: http://aesop.rutgers.edu/~farmmgmt

Thanks to USDA CSREES for research funding.Thanks to USDA CSREES for research funding.

what to do when a big box store moves to town marketing strategies lawrence s. martin & dr....

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