Table 1. Internal and external information gathered in the situation analysis

Business related (Internal) Information:

(1) Financial resources and capabilities:

• Gross profits and net earnings after taxes
• Financial ratios – return on investment, breakeven analysis, leverage ratio, current ratio, age of accounts receivable, inventory turnover, working capital turnover, and profit margins.
• Cash flow analysis (actual and/or projected)
• Record keeping system
• Borrowing capabilities

(2) Operating facilities:

• Production capacity – based on land, labor, and equipment availabilities (wholesale nurseries only)
• Production scheduling of cultural practices (wholesale nurseries)
• Inventory levels by variety, grade, size, and loss rates (may affect markets targeted in the short run)
• Manpower requirements
• Equipment requirements

(3) Competitive strengths and weaknesses:

• Competitive status of company’s products (name recognition, quality perception, etc.)
• Sales force capabilities
• Market share projections (as compared to competitors)
• Competitiveness of prices – volume discounts
• Advertising and promotion capabilities
• Depth of product mix
• Distribution methods and channels
• Service capabilities

Market Related (External) Information:

(1) Environmental constraints:

• Costs and availabilities of materials (chemicals, soil media, etc.)
• Costs and availabilities of energy (fuel, electricity, etc.)
• Economic conditions – housing starts, inflation, recession, interest rates, unemployment rates, capital availability.
• Technology advancements
• Political environment – environmental quality, pesticide issues, etc.

(2) Market conditions:

• Market size – population, family size, number of households, rate of growth in an area, geographic concentrations.
• Market segments (alternative outlets) differentiated by age, sex, income level, education, occupation.
• Buyer purchasing habits – time, place, credit or cash, frequency.
• Buyers use habits – when, where, for what purpose.

(3) Analysis of competitors:

• Number of competitors in the market area
• Market shares (industry surveys)
• Strengths and weaknesses in terms of prices (last 3-5 years), product mix, quality, promotion, advertising, cost structure, transportation costs.

Sources of Information:

• State or national trade associations (TAN, American Association of Nurserymen, etc.)
• Landscape contractors or architects (can indicate plants they are currently using or plan to use and those which are difficult to obtain)
• County Extension Agents and Horticultural Specialists – Extension Service
• Texas Departments of Agriculture (Texas Grown program)
• Trade publications (American Nurseryman, Nursery Business – Retailer, Nursery Business -Grower, Nursery Manager)
• Trade shows (SNA, TANMISSLARK, Penn Allied, etc.) I
• ndustry surveys (TAN, AAN, etc.)
• Census data (excellent source of demographic information)

Table 2. Examples of specific marketing objectives

• Increase overall return on investment by __% for the next fiscal year.
• Increase specific product sales by __% for the next fiscal year.
• Increase market share by __% in “X” market by December 31, 1990.
• Increase sales volume by __% in selected regions/territories by specific dates.
• Prices should yield a minimum unit contribution to profit of __%.
• Increase manpower training by __% by a specific date.
• Achieve advertising/promotion goals in specific markets for the year.
• Introduce __ new products to fill out product mix by specific dates.

Table 3. Tactical product mix decisions.

Product Related Decisions

• Determining the most effective product mix (species, cultivars, sizes, etc.) to serve each market segment (should be based on costs and buyer demand).
• Branding the products in the product line, if possible (plant patents, etc.)
• Using attractive and efficient containers that hold up during storage.
• Provide attractive and informative labels for plant materials.
• Provide guarantees for each product in the product line. Modifying the existing product mix as the need arises.
• Planning and introducing new products (cultivars, sizes, etc,) when possible.
• Provide information on the care of the plants after they are sold.
• Service considerations – delivery, credit, convenient business hours.

Promotional Related Decisions

• Select and prioritize target groups and geographical marketing areas.
• Determine whether advertising is required for the target markets selected. If so:
  • Determine advertising appeals and specific messages to use in those campaigns.
  • Select appropriate advertising media such as radio, television, newspaper, road signs or direct mail.
  • Determine the size of the ads to be used.
  • Determine the duration of the advertising campaign.
  • Determine the frequency of advertising.
  • Determine how advertising effectiveness is to be measured.
• Select appropriate sales promotional media such as point-of-purchase materials, samples, demonstrations, or trade shows.
• Develop a logo that is colorful and prominent.
• Public relations events – donate to charities, community meeting place, sponsor festivals, etc.

Pricing Related Decisions

• Determine base prices for each product in each market served
• Determine the appropriate types and sizes of volume discounts used, if any.
• Determine the use of psychological pricing tactics such as prestige pricing, promotional pricing, etc.
• Determine credit policies.
• Allow consumers to buy the quality of plants they can afford.

Distribution Related Decisions

• Provide protective packaging for goods in transient and storage.
• Determine the modes of transportation to be used.
• Determine inventory requirements and maintain these requirements.
• Provide frequent small shipments, even on weekends, if necessary.