Kip Creel, president of Nquery, talks about marketing and branding ornamental plants.

Q. Do you think any segment of the ornamentals industry will ever have a true national marketing/promotion program?

A. It is important to remember that gardening is a local business due to climate and topographical differences. National branding initiatives pose a challenge because many products will not perform in the same way from market to market. Unlike a box of toothpaste, which is exactly the same regardless of where and when you buy it, uniformity and consistency are difficult to achieve with plant material.

For a plant brand to attract a national following, the product must be truly breakthrough. Some examples of successful branding are the Wave petunias and Endless Summer hydrangea. These products distinguish themselves through unique garden performance, which justifies a premium price point and encourages brand loyalty. If a product truly has a unique point of differentiation, it makes sense to spend at the brand level.

At the program level, however, marketing and promotion serves to raise awareness, drive impulse sales and boost sales velocity. A national program will require retailers to provide the marketer latitude for national development.

Chain stores are the most likely candidates for a national program -- they control the retail presentation, have the volume to justify private label merchandising strategies and can give a brand national presence. They also have the latitude to dictate retail standards so that the retailers, growers and breeders are working together to support one brand.

Q. Can you think of another industry that is going through a similar situation in regards to how it markets its products?

A. In terms of traditional marketing and media, everyone is facing diminishing returns regardless of industry. As a result, many markets are dedicating resources to cultivating relationships with loyalists through direct response marketing and publicity events. Online advertising is still the fastest growing medium because it offers cost-effective one-on-one marketing and the results are measurable.

For this industry, successful execution of effective point-of-purchase programs is still the biggest opportunity, especially if the retailer's marketing efforts are aligned with the rollout of these programs. Oftentimes, consumers have only a vague idea of what they want to buy, so they gravitate toward what they know. While consumers are in the stores, we must excite them about new products and build their confidence so they can step outside the box. These tactics will generate impulse sales. It's all about increasing average transactions.

The natural evolution for the box store garden centers will be to put together some type of umbrella house brand that communicates quality and consistency and clearly communicates what the garden center stands for.

At the local level, the independent garden center has most of the brand equity. The umbrella brand is simply the name of the store and what it means to local consumers. Plant marketers have two options in this channel -- tap into the retailer's brand equity (e.g., Acme plant brought to you by City View Garden Center) or develop compelling programs through merchandising and store placement.

Q. Is there a particular industry that you think has done a good job of marketing itself that you think the ornamentals industry could learn from or emulate?

A. The dairy industry created a memorable campaign with "Got milk?" The question then becomes, did the campaign increase milk consumption? The answer is no. What has increased milk consumption is product development -- more products made from milk.

Just marketing an industry doesn't always translate into increased sales. What matters is product innovation and meeting unmet needs. For the green industry, breeding is the product development machine; we must continue to create new products that excite consumers. The desire is out there but, frankly, consumers are bored.

The other brutal fact is that every product has a lifecycle. And lifecycles are shortening. Retailers love Wave petunias, for example, but complain that it is now so ubiquitous.

We often forget the enormous investment and risk that breeders assume when developing innovations. With breakthrough products, the early years are great because supply is lower, consumer demand is higher and the margins are fantastic. Naturally, as demand grows, growers increase production and the plant becomes more available. Over time, however, ubiquity can (but doesn't always) create commoditization.

One way around the problem of ubiquity is to create exclusives. Breeders, growers and even retailers could partner to launch products. You carefully control supply and distribution to maintain margins.

We saw this happen in the agricultural chemical business. Chemical manufacturers used to sell their innovations to whomever would buy them. Before long, the active ingredient was ubiquitous; the packagers were fighting for shelf space and price became their strongest weapon. The original producer of the innovation commoditized its own innovation. Now, chemical companies are more apt to be very selective about who they choose to formulate and distribute their innovations.

Q. Looking at the current national flower brands, how do you think they are doing overall?

A. The important thing to know here is that the brands are provided by the breeders. National flower branding is difficult unless all levels of the supply chain support the brand. Often, breeders have a hard time convincing growers to adopt their full line.

Just like consumers, growers "cherry pick" based on perceived quality. By the time a grower's program gets to retail, it is a mish-mash of breeder brands and genetics and it's meaningless to the consumer.

Marketing programs only work if the consumer walks into the store and sees an overwhelming presence of a particular brand. The goal is to make the consumer think, "Wow this Simply Beautiful must be something special. I need to check it out."

My theory is that national retailers will have to dictate what the grower carries; national retailers are the only entities who can control point of sale at a national level.

Q. What do you think are the major obstacles to growers and retailers trying to brand their products?

A. The major obstacle to branding is that it is only possible if the product has a distinct value proposition -- usually through garden performance, which will warrant premium pricing and will encourage brand loyalty. In many cases, it is difficult to communicate product differentiation to consumers, and if the consumers can't see or articulate a difference between Product A and Product B, they won't pay a premium.

An alternate to branding is a marketing program. The purpose here is to raise awareness of the product and increase sales velocity. Programs are usually short-term or medium-term initiatives that boost sales and require a much smaller investment than branding. Programs can turn into brands, but you are looking at a 10-20 year horizon. Which do you think has a greater short term return on investment? No doubt it's programs. Many more growers and breeders are realizing that it makes sense to spend at the program level.

Q. Your company recently completed the second study on branding and point-of-purchase materials. Were you at all surprised by any of the results?

A. No, we weren't surprised. We have consistently found that POP-intensive programs that are meaningful to consumers will boost sales velocity and will often allow for a slight increase in pricing, which serves the program's purpose of increasing awareness, driving impulse sales, and most importantly increasing gross margin. It worked for us because the retailers were willing to carve out space for us and because we created a dynamic point-of-purchase experience for the consumer. The harsh reality is that this is not reality. There are a lot of great programs out there, but they flounder because they cannot get into the focus or impulse areas of the store.

I think the next step is to continue to show retailers how to execute merchandising and program ideas at the point of sale, which will drive impulse sales. Admittedly, brands and programs are not for every retailer or every consumer. And that's OK.

Finally, as with any new idea, we must test its ability to boost gross margins and/or sales velocity. Otherwise, what's the point?

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© 2004 Branch-Smith Publishing