1. Sales & Marketing, Business Concepts in the Floriculture Industry
At the completion of this unit. Students will be able to:
Objective 1: Price floral design work.
A. Determine Costs
B. Assess pricing strategies
C. Calculate Mark-up
Objective 2: Prepare floriculture crops for sale.
Objective 3: Explain the basics of marketing in the floriculture industry.
A. Use advertising
B. Complete Sales Tickets
C. Use proper telephone techniques
Objective 4: Describe floriculture business management.
A. Differentiate the types of floriculture businesses.
B. Recognize costs related to floriculture production.
C. Analyze the importance of marketing, promotion, and sales.
D. Describe career opportunities associated with floriculture management

2. Pricing
A very important responsibility of the owner or manager of retail florist shop is to construct beautiful designs that are appropriately priced.
Floral customers must be motivated to purchase!
Design construction –Quality/Value
Pricing

3. Buying Floral Materials (Plant material and Hard goods)
Sources of Goods Used
Wholesalers: the link between grower/broker and the retail florist. They may sell only plants or plants and hard goods. Most deliver and offer large quantities.
Growers: can supply plant material direct to retail florist.
Flower Market: Usually in very large cities. Wholesalers are represented.
Broker: An agent who purchases flowers from growers and sells to wholesale and retail florists.

4. Being a Successful Buyer
Be an informed and knowledgeable buyer.
Know your flowers and how they are sold! By the stem, weight or bunch.
Ask around, find out who supplies the best quality. Who handles their flowers the best?
Report damaged or poor quality flowers to supplier.
There can be a trade off with pricing and high quality.
Build good relationships with suppliers.
Be honest.

5. What does it cost to operate a floral?
Calculate the unit cost of goods – the price of a single item determined by dividing the overall bunch or case price by the number of items in the bunch or case.
Example $24.00 a case of vases  36 vases in the case = $.66
Wholesale cost of goods or wholesale price is the total of all unit costs added together.
Retail Price – is the florists selling price.

6. Determine Cost of Goods
You need to know how much a single unit or item costs.
Example: Carnations are for a bunch of 25.
How much per stem?
11.50/ per stem.

7. Other costs of operating a floral
1-Labor
-Florists are labor intensive!
Floral owners not only pay a salary but also have to pay:
Pay roll taxes such as Social Security, FIDC, unemployment, workers compensation etc.
Employee health Insurance
Other benefits

8. What does it cost to raise a successful crop?
2- Cost of Goods
Soft Goods:
plant materials
Hard goods:
supplies – tape, wire, vases, ribbon etc.

9. What does it cost to operate a floral business?
3- Operating Expenses
-Utilities for heat/cooling
-Water
-Rent or mortgage
-Electric bill

10. What does it cost to operate a floral business?
4- Marketing/Advertising
-Ads in the yellow pages
-Printing signs/flyers/brochures
-Newspaper Ads
-Billboards
-Radio/TV ads

11. Pricing Methods
Ratio Mark-UP
Percentage Mark-up

12. How are retail prices calculated?
C. Determine Retail Prices
How are retail prices calculated?
Usually live plants are marked up using a
3:1 ratio
Example:
-If it costs $1.50 to a raise a geranium, it will sell for $4.50 $1.50 X 3 = 4.50
-If it costs $3.00 to raise an Easter Lilly, it will sell for $9.00 $3.00 X 3 = $9.00

13. Calculate Cost of raising 1 poinsettia
C. Determine Retail Prices
Calculate Cost of raising 1 poinsettia
Expense
Group Cost
Individual Pot Cost
Poinsettia start
$400
$1.00
Pot
$80
$0.20
Soil
$140
$0.35
Fertilizer
$60 (2 bags)
$0.15
Insecticide
$150
$0.37
Pot Cover & Bow
$200
$0.50
Materials Subtotal:
$2.57
Greenhouse utilities
$2.57 x 3 =
Labor
Advertising
Facility Improvements
Grand Total
$8.00
3:1 mark up above cost of materials covers misc expenses and provides for a profit

14. Ratio Mark-UP A mark-up is used to determine retail price.
Example: Hardgoods are usually a 2:1 markup and perishables like flowers are 3:1.
You multiply the wholesale cost for supplies by 2 and the wholesale cost of flowers by 3.
See table 12-5 on page 278.
These ratios may vary from florist to florist! Some use a consistent 3:1 while others may charge 5:1 for labor intensive design work.

15. Percentage Mark-up This method plans for profit $$$.
This is taking the wholesale cost of goods and dividing that by the cost of goods percentage as determined by the shop’s financial statement. The florist must analyze their business to determine. Four areas should be evaluated to determine the percentage to mark up: Gross Sales, Operating Expenses, Cost of goods and Net Profit.

16. Example of Percentage Mark-up
Uses a 30 to 33 percent cost of goods percentage.
For example if a design cost $5.00 for supplies. You divide the $5.00 by 30 percent. Total selling price would be $16.66.

17. Assignment
Calculate the price of a vase arrangement that contains the following:
Wholesale costs:
15 mixed flowers
5 of them cost $.50 each
5 of them cost $.75 each
5 of them cost $1.00 each
Foliage is $.25 stem – 10 stems are in the arrangement
Vase is $1.00
Floral preservative $.05.
Time to create 15 minutes. (labor)
In your notebooks answer these: Show you work!!!!
Arrangement price calculate by Ratio method use a 2:1 for hard goods and 3:1 for perishables.
Ratio plus labor. Assume an hourly pay of $15.00 per hour
Percentage method – use 30%

18. Which would you rather buy?

19. Which would you rather buy?
Pots should be covered with a holiday foil
Add a bow to increase appeal
Remove any dead or poorly colored leaves/bracts

20. Quality vs Quantity What does the customer want?
What are you producing?
What types of stores focus on each type.

21. Preparing a potted plant product for sale.
Clean it up
Remove dead, dying, diseased or unsightly material.
Wrap it or add value to it.
Label it.
Other ideas?
Watch the slide show on poinsettia prep.

22. Sales & Customer Service

23. Marketing Terms
Marketing: all business activity undertaken to encourage the moving of goods from the grower or producer to the final consumer, including selling, advertising, promotions, and packaging.
Four variables used in marketing, the 4 P’s:
1. Product
2. Place
3. Price
4. Promotion
Advertising: the presentation of a product, idea, or service for the purpose of inducing others to buy, support, or approve of it.
Media: collectively, channels of communication, either electronic or print, that serve mass or targeted audiences; e.g., newspapers, magazines, radio, television, etc.
The American Institute of Floral Designers. The AIFD Guide to Floral Design. Terms, Techniques, and Traditions. The Intelvid Group, 2005.

24. Marketing Terms
Promotion: all advertising, publicity, and personal selling activities leading to the public recognition of a business and the generation of sales.
Publicity: collectively, acts or devices intended to attract public interest, especially information with news value.
Open house: a promotional effort intended to bring customers into a business establishment, often in advance of a major floral holiday, such as Christmas.
The American Institute of Floral Designers. The AIFD Guide to Floral Design. Terms, Techniques, and Traditions. The Intelvid Group, 2005.

25. Marketing Terms
Loss leader: a promotional tool whereby a retail article is sold at a loss in order to attract customers.
Turnover: the number of times merchandise is sold and re-stocked for sale in a given time period.
The American Institute of Floral Designers. The AIFD Guide to Floral Design. Terms, Techniques, and Traditions. The Intelvid Group, 2005.

26. Marketing Terms
Target market: a defined group of customers whom a retailer attempts to attract.
Niche market: a special area of demand for a product or service.
The American Institute of Floral Designers. The AIFD Guide to Floral Design. Terms, Techniques, and Traditions. The Intelvid Group, 2005.

27. Marketing Terms
Circulation area: the geographic area where product is delivered and advertising is done, particularly with respect to printed media.
Demographics: the statistical characteristics of a population, such as age, income, gender, and education level that are used to develop targeted marketing efforts.
Psychographics: the behavioral and cultural characteristics of consumers, such as lifestyle, attitudes, values, and buying patterns, that influence purchasing habits.
The American Institute of Floral Designers. The AIFD Guide to Floral Design. Terms, Techniques, and Traditions. The Intelvid Group, 2005.

28. Marketing Terms Customer: one that purchases a commodity or service
Customer service: the manner in which a vendor accommodates the needs and demands of the customer or client, which may enhance the perceived value of a product or service.
Customer base: a group of individuals and commercial clients who regularly patronize a business
The American Institute of Floral Designers. The AIFD Guide to Floral Design. Terms, Techniques, and Traditions. The Intelvid Group, 2005.

29. Types of Customers
Decided customer: has a definite floral need, may already know exactly what he or she wants to buy.
Undecided customer: has a floral need, but has not determined exactly what he or she wants.
Browser: may be looking for an idea or a bargain, not interested in pressure for a sale, may be a potential customer, hardest to sell to. 
Hunter, Norah T., The Art of Floral Design Second Edition Delmar, Chapter 21.

30. Types of Customers
Foot traffic: collectively, the people who come into a retail store who may or may not make a purchase.
Walk-in: a colloquial term describing a customer who enters a business establishment, without an appointment, to make a purchase or place an order, rather than using the telephone or internet.
The American Institute of Floral Designers. The AIFD Guide to Floral Design. Terms, Techniques, and Traditions. The Intelvid Group, 2005.

31. Selling Terms Selling: the process of influencing a buying decision.
*You must first greet the customer!
Impulse sale: an unplanned purchase. Such as a greeting card, etc.
Up-sell: to suggest or show to the customer one or more premium options rather than a less expensive choice. Up-selling may also encourage the sale of additional goods or services.
Hunter, Norah T., The Art of Floral Design Second Edition Delmar, Chapter 21.

32. Telephone Etiquette Confident, happy voice Answer every call promptly
Friendly greeting
Include name of shop
Include name of person speaking
Offer assistance
“ Good Morning. Sally’s Flowers. Samantha speaking. How may I assist you?”
Aware of products and pricing
Obtain all information on order form—date, payment, delivery, items, etc.
Clarify name spelling
Clarify any items
Ask for questions
Thank customer
Invite further purchase
Let customer hang up first
Hunter, Norah T., The Art of Floral Design Second Edition Delmar, Chapter 21.

33. Six ways to Market Ways to advertise!
Newspaper Ads TV
Radio
Displays
Flyers
Coupons
Internet
Demonstration
Sponsorship

34. Advertising must do the following.
Attract potential customers
Have effective design
Simple message
Include name of business, address, phone, website,
Products or services offered
Any special messages

35. Marketing tools
Paper Ads
Displays
Brochures
Radio/TV

36. Marketing Plan
A written plan that explains in detail how your products/services will be marketed.
Includes pricing strategies
Includes advertising methods
Includes marketing cost factors

37. What factors effect your purchase choices? Buying Decision?
Cost
Convenience
Quality
Where it was produced/grown
Features
Etc.

38. List what makes this salesman successful???
Went to a target audience
Showed the qualities
Wasn’t afraid to ask
Let them try it

39. Example Sale Pattie’s Palm Trees
Identify potential customer
Present your product to them
Display it’s qualities
Make the sale
Arrange details (pick-up or delivery)
Follow through!
Southern Utah Resident
Mexican Fan Palm Tree
Grown in St. George, already acclimatized, supports local economy
Make the sale
I’ll deliver it on November 23rd at 10 AM
Follow through!

40. Methods of payment Cash Credit – cards or customer accounts
Purchase Orders – PO’s
Check

41. How to Create a Marketing Plan
1- Identify an audience 2- Determine how you can reach your audience - Newspaper Ad - Phonebook -Word of mouth -Flyers/brochures -etc 3- Design marketing materials

42. Greenhouse plant packs
Single pots can range in size 4” common
Pony Packs – usually 6 or four packs
Flats – contain pony packs, usually 12,8 or 10
See Handout – provided.
Used to determine production costs - #seeds, soil, etc.

43. Are all Florals the same?

44. The Floral Industry

45. The Floral Industry terms
Floral industry: a collective term for the people and business entities engaged in the production, promotion, and sale of floral products and related merchandise. Aspects of the floral industry include growers, wholesalers, retailers, transportation, product-development, manufacturing, freelance designers, educators, allied associations, publications, wire services, etc.
Florist: a person or business entity associated with the sale of flowers, plants and other related products. 
The American Institute of Floral Designers. The AIFD Guide to Floral Design. Terms, Techniques, and Traditions. The Intelvid Group, 2005.

46. The Floral Industry terms
Retailing: the business of selling goods obtained from a wholesaler or other supplier to the consumer
Wholesaling: one who buys flowers, plants, and/or related products from growers, brokers, and manufacturers.
The American Institute of Floral Designers. The AIFD Guide to Floral Design. Terms, Techniques, and Traditions. The Intelvid Group, 2005.

47. The Floral Industry terms
Logo: a graphic representation of a name, brand, symbol or trademark, designed for easy and definite identification and recognition.
The American Institute of Floral Designers. The AIFD Guide to Floral Design. Terms, Techniques, and Traditions. The Intelvid Group, 2005.

48. The Floral Industry terms
Wire service: a commercial organization whose primary function is to administer the handling of wire orders between member florists. Referring to the transfer of floral design orders from one shop for delivery by another shop.
Hunter, Norah T., The Art of Floral Design Second Edition Delmar, Chapter 21.
The American Institute of Floral Designers. The AIFD Guide to Floral Design. Terms, Techniques, and Traditions. The Intelvid Group, 2005.

49. Types of Flower Shops
Full-Service flower shop: a floral shop that provides every floral product and service needed by customers, including delivery and wire service.
Specialty flower shops: a floral shop that targets particular floral needs, such as weddings, high style designs, or everlasting designs.
Hunter, Norah T., The Art of Floral Design Second Edition Delmar, Chapter 21.

50. Types of Flower Shops
Limited-service flower shops: a flower shop characterized by little or no added service and products; for example, a floral department in a grocery store.
Flower merchandisers: a retailer specializing in loose cut flowers sold by the stem or bunch who generally does not provide design or delivery services.
Hunter, Norah T., The Art of Floral Design Second Edition Delmar, Chapter 21.

51. Locations for Flower Shops
Free-standing flower shop: a shop in a single unit building.
Strip-center flower shop: combines several businesses that adjoin one another and make up a small shopping complex.
Shopping mall: floral shop found within a shopping mall.
Hunter, Norah T., The Art of Floral Design Second Edition Delmar, Chapter 21.

52. Free-standing flower shop
Miamibeach411.com

53. Free-standing floral shop
Topix.com

54. Strip-center
About.com:phoenix

55. Shopping mall
About.com:phoenix

56. Kiosk in a Mall
Photograph-london.com

57. Locations for Flower Shops
Business complex: often combine the full-service features needed by business accounts with merchandising loose fresh flowers for personal, office, and home use. Clearly defined customer base determined by immediate tenants.
Downtown location: usually long-established businesses, building adjoin each other, but have own store front.
Hunter, Norah T., The Art of Floral Design Second Edition Delmar, Chapter 21.

58. Downtown business front

59. Downtown business front
Jpgmag.com

60. Downtown business front
Historicphotoarchive.com

61. Downtown business front
Yelp.com

62. Locations for Flower Shops
Floral department: supermarkets and mass merchandisers with aggressive flower merchandising programs. Usually prepackaged assortments. Some may have complete floral services.
Mass merchandiser: a retail enterprise that seeks to sell large quantities of goods quickly by means of discounting, customer self-service or unadorned display and packaging.
Hunter, Norah T., The Art of Floral Design Second Edition Delmar, Chapter 21.

63. Mass merchandisers
Chicago tribune.com

64. Shop layout
Display area: purpose is to capture attention and motivate people to buy.
Four primary goals:
attract attention
create interest
turn interest into desire
generate sales
Hunter, Norah T., The Art of Floral Design Second Edition Delmar, Chapter 21.

65. Shop layout
Window display: communicate visually with people who pass by the shop.
bright and bold
able to communicate a message in a split second
name of shop prominent and easily read
influence viewer to stop and then to entice this prospective buyer to come into the flower shop
Hunter, Norah T., The Art of Floral Design Second Edition Delmar, Chapter 21.

66. Window Display
i.ehow.com

67. Window display
i.ehow.com

68. Shop layout
In-store display: product presentation should move the customer through the store in a preplanned sequence
position the display refrigerator with fresh flowers at the back of the store
attraction pulls the customer through the store
show full range of services offered by the florist
Vignette: refers to displaying or grouping similar types of merchandise for maximum visual appeal
Hunter, Norah T., The Art of Floral Design Second Edition Delmar, Chapter 21.

69. In-store display
Nz.flower.co.nz

70. In-store display
Nz.flower.co.nz

71. In-store display (closeup)
Saveoncrafts.com

72. In-store displays with vignettes
worldpanaramastock.com

73. Shop layout
Customer service area: sales counter and consultation spaces
help customers make selections and purchases
includes space for telephone sales, fax, and computer orders
Hunter, Norah T., The Art of Floral Design Second Edition Delmar, Chapter 21.

74. customers
Chicago tribune.com

75. Shop layout
Design work area: area within the floral shop where designers make arrangements
must be with tools and supplies organized and at hand
Hunter, Norah T., The Art of Floral Design Second Edition Delmar, Chapter 21.

76. Design work area
Sunset.com

77. Shop layout
Storage area: area where seasonal and extra supplies are stored
Inventory: the items available for sale by a business at a given time, including the raw materials on hand used to produce completed items for sale
Perishables: items such as fresh cut flowers or living plants that are subject to spoilage or decay
Hard goods: nonperishable staples, supplies, or inventory items, such as baskets, vases, ribbon, etc
Hunter, Norah T., The Art of Floral Design Second Edition Delmar, Chapter 21.

78. storage
Gocentralamerica.about.com

79. Shop layout
Refrigeration area: fresh cut flowers and foliage are stored before and after designing
Storage refrigeration: large walk-in storage coolers hold flowers in buckets of preservative solution for use in arrangements, store boxes of fresh greenery, and keep arrangements cool and fresh while awaiting delivery
Display refrigeration: form of visual merchandising. Exhibit flowers by the stem, floral arrangements ready for sale, and floral arrangements ready for delivery
Hunter, Norah T., The Art of Floral Design Second Edition Delmar, Chapter 21.

80. Storage refrigeration
Nz.flower.co.nz

81. Display refrigeration
Topix.com

82. Shop layout
Accounting/Business area: space designated for paying bills, ordering flowers, paying wages, sales planning, etc.

83. accounting/ business area
Superstock.com

84. Roles of a full-service floral shop:
Owner: may or may not work in shop
Manager: oversees day to day operations of floral shop
Sales: customer service, selling
Design: design arrangements for delivery or sale
Delivery: deliver floral arrangements
Accounting: take care of paperwork of floral shop
Hunter, Norah T., The Art of Floral Design Second Edition Delmar, Chapter 21.

85. Sunset.com

87. Assignment: Create a Marketing Plan for the UHS Greenhouse
Make a slogan
Create a sign advertising the our plants or poinsettias that are for sale

88. Assignments Complete a sales ticket for a retail floral.
Script out how to properly and professionally answer a telephone at a business.
See Mr. Wilson for Assignment sheets.