Effects of Pricing Influences and Selling Characteristics on Plant Sales in the Green Industry

Abstract

Data from the 2004 National Nursery Survey conducted by the USDA-CSREES S-1021 Multistate Research Committee (referred to as the Green Industry Research Consortium) were used to evaluate the effect of pricing influences and selling characteristics on total gross firm sales and gross sales of several plant categories (trees, roses, shrubs/azaleas, herbaceous perennials, bedding plants, foliage, and potted flowering plants) for commercial nurseries and greenhouses. As expected, the firm's selling characteristics play a large role in whether a firm sells a specific plant category. Demand factors also play a role in affecting plant category sales with income, population, and race tending to be the only significant variables, except for the potted flowering plants category. In regard to sales, our results show that certain factors affecting pricing decisions play a critical role in both plant category sales and total sales. Furthermore, demand and business characteristics play a limited role as well, but not as big a role as selling characteristics. Of note is that firms with an increased percentage of sales through wholesale channels (of most plant categories and overall) result in increased sales. By understanding the nursery and greenhouse industry environment and how decisions affect overall and categorical sales, firms can implement strategies that capitalize on factors that have the potential to generate increased sales.