distributor. Interstate haulers transported flowers in refrigerated trucks. and then regional distributions spider-webbed with panel trucks...

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distributor. Interstate haulers transported flowers in refrigerated trucks. and then regional distributions "spider-webbed" with panel trucks and vans to reach local retailers, Traditional channels of distribution in the floral industry have been from grower to wholesaler, to retailer, to ultimate consumer Wholesaler trucks still transport floral products; however Federal Express (FedEx) and United Parcel Service (UPS)have also emerged as strong competitors in moving flowers to the retailer and the consumer. Although the methods of communication and transportation have changed,retail florists still distribute the majority of floral products: nontraditional retailers such as supermarkets. discount stores, and street vendors account for the rest. Customers still buy about half of their flowers for special occasions. such as Valentine's Day. But distribution channels are evolving in new directions in the twenty-first century. Retailers and consumers can purchase directly from growers via phone or through a broker via an Internet dot-com or other intermediary reseller. These options were previously not available. The Wholesaler's Role Some retailers like to personally select the flowers they resell. If that is not possible, then they must have confidence in the wholesaler's ability to make selections. So having a trusted wholesaler nearby is very useful. Many small floral businesses, such as Clark's Flower Shops, do not sell large quantities of certain flower varieties. However,consumers often demand a wide variety of products. Consequently,retail florists need quick and reliable access to broad inventories of flowers to operate a viable business. Here again,traditional wholesalers have been a valuable resource for providing such product availability for retail florists. Flowers are traditionally shipped in box lots, not bunches to the wholesaler. The traditional wholesaler can then repackage the product and provide the needed assortments and sizes. The small retailer confronts the dilemma of variety versus quantity versus perishability, specifically during peak demand periods when it is difficult to stock the required inventory given needed lead times. Discussion Questions 1. Please draw the channel structure of flowers. 2.Do you think the traditional wholesaler will or should be largely disintermediated from floral marketing channels? Explain your rationale for disintermediation of the wholesaler or the need for the wholesaler to remain in the channel. II.Read following case and answer questions: Clark's Flower Shops Will Disintermediation Occur in the Channel? Marketing Channels for Flowers Twenty years ago the local grocery store,the discount store, and the mass marketer were not recognized as major sellers of floral products. Flowers were not an everyday part of people's lives. Consumers purchased flowers mainly from their local retail florist. National wire services. such as Florists' Transworld Delivery Association(FTD), also played an important role in the retail floral community by facilitating purchases and deliveries of flowers throughout the world. Credit cards were not as widely used as they are today. As a result, individuals used their local florists to arrange for delivery of flowers to other areas. Most consumers perceived flowers as something for special occasions. Today mass-market retailing and the promotion of flowers for everyday use permit consumers to help themselves through cash-and-carry merchandising. Moreover, consumers can use the Internet to contact florists worldwide directly and place an order through the individual florist's Web site. Alternatively, consumers can access a dot-com wire service,transmission clearinghouse, or even a grower to have fresh flowers delivered locally rationally.or internationally. History of Clark's Flower Shops Clark's Flower Shops is an eleven-year-old cut-flower retailer located in rural upstate New York. Clark's, founded and owned by Bob and Dee Clark. represents their vision to put fresh flowers in everyone's home. The Clarks have been in the flower business since 1976. The company has grown from a home-based greenhouse business to a regional grower and wholesaler of potted plants with three full-service flower shops, a garden center. And two retail "bucket shops." Clark's offers fresh. Affordable flowers to the consumer using a cash-and-carry business model.Roses are the number-one selling flower, and Valentine's Day is the number-one holiday for the business. Refrigeration in the building is minimal and the flowers are marketed European style in buckets and vases displayed around the store. Historically. Bob and Dee have purchased primarily from regional wholesalers located in Albany, New York: in Burlington, Vermont; and throughout Quebec Province,Canada.Always open to new ideas they have also sourced flowers from the flower auction in Montreal, buying direct from growers, and on the Internet, by using an online broker and auction service,flowerbuyer.com. Flowers come from all around the world: bulb and corm flowers such as tulips, lilies, and irises frorn Holland; roses from Colombia and Ecuador, tropical flowers such as anthurium and heliconia from Hawaii: protea from South Africa, and potted plants from Canada. Because the pricing strategy of the market is based on volume sales, Clark's purchases the majority of its flowers in box lots, not individual bunches, This enables Clark's to price competitively with mass marketers and grocery chains. Purchase price is extremely important to the profitability of the flower business, and pennies saved on the "cost per stem" and costs savings resulting from more efficient methods of shipping have a strong impact on the bottom line. The industry E-commerce and the opportunity to buy directly from the grower or online suppliers, possibly disintermediating the regional wholesaler, have placed Moral retailers such as Clark's in an enviable position. Traditional channels of distribution are experiencing competition from technology-oriented direct sellers, offering a change in traditional purchasing methods. Twenty years ago cut flowers were distributed to rural upstate New York by wholesaler truck and Greyhound bus,and by rail before that. Typically, the flowers were either grown in the United States and transported overland to regional wholesaler. or imported via broker to a receiving port such as Miami. Florida, and then shipped via truck to a regional wholesale distributor. Interstate haulers transported flowers in refrigerated trucks. and then regional distributions "spider-webbed" with panel trucks and vans to reach local retailers, Traditional channels of distribution in the floral industry have been from grower to wholesaler, to retailer, to ultimate consumer Wholesaler trucks still transport floral products; however Federal Express (FedEx) and United Parcel Service (UPS)have also emerged as strong competitors in moving flowers to the retailer and the consumer. Although the methods of communication and transportation have changed,retail florists still distribute the majority of floral products: nontraditional retailers such as supermarkets. discount stores, and street vendors account for the rest. Customers still buy about half of their flowers for special occasions. such as Valentine's Day. But distribution channels are evolving in new directions in the twenty-first century. Retailers and consumers can purchase directly from growers via phone or through a broker via an Internet dot-com or other intermediary reseller. These options were previously not available. The Wholesaler's Role Some retailers like to personally select the flowers they resell. If that is not possible, then they must have confidence in the wholesaler's ability to make selections. So having a trusted wholesaler nearby is very useful. Many small floral businesses, such as Clark's Flower Shops, do not sell large quantities of certain flower varieties. However,consumers often demand a wide variety of products. Consequently,retail florists need quick and reliable access to broad inventories of flowers to operate a viable business. Here again,traditional wholesalers have been a valuable resource for providing such product availability for retail florists. Flowers are traditionally shipped in box lots, not bunches to the wholesaler. The traditional wholesaler can then repackage the product and provide the needed assortments and sizes. The small retailer confronts the dilemma of variety versus quantity versus perishability, specifically during peak demand periods when it is difficult to stock the required inventory given needed lead times. Discussion Questions 1. Please draw the channel structure of flowers. 2.Do you think the traditional wholesaler will or should be largely disintermediated from floral marketing channels? Explain your rationale for disintermediation of the wholesaler or the need for the wholesaler to remain in the channel. II.Read following case and answer questions: Clark's Flower Shops Will Disintermediation Occur in the Channel? Marketing Channels for Flowers Twenty years ago the local grocery store,the discount store, and the mass marketer were not recognized as major sellers of floral products. Flowers were not an everyday part of people's lives. Consumers purchased flowers mainly from their local retail florist. National wire services. such as Florists' Transworld Delivery Association(FTD), also played an important role in the retail floral community by facilitating purchases and deliveries of flowers throughout the world. Credit cards were not as widely used as they are today. As a result, individuals used their local florists to arrange for delivery of flowers to other areas. Most consumers perceived flowers as something for special occasions. Today mass-market retailing and the promotion of flowers for everyday use permit consumers to help themselves through cash-and-carry merchandising. Moreover, consumers can use the Internet to contact florists worldwide directly and place an order through the individual florist's Web site. Alternatively, consumers can access a dot-com wire service,transmission clearinghouse, or even a grower to have fresh flowers delivered locally rationally.or internationally. History of Clark's Flower Shops Clark's Flower Shops is an eleven-year-old cut-flower retailer located in rural upstate New York. Clark's, founded and owned by Bob and Dee Clark. represents their vision to put fresh flowers in everyone's home. The Clarks have been in the flower business since 1976. The company has grown from a home-based greenhouse business to a regional grower and wholesaler of potted plants with three full-service flower shops, a garden center. And two retail "bucket shops." Clark's offers fresh. Affordable flowers to the consumer using a cash-and-carry business model.Roses are the number-one selling flower, and Valentine's Day is the number-one holiday for the business. Refrigeration in the building is minimal and the flowers are marketed European style in buckets and vases displayed around the store. Historically. Bob and Dee have purchased primarily from regional wholesalers located in Albany, New York: in Burlington, Vermont; and throughout Quebec Province,Canada.Always open to new ideas they have also sourced flowers from the flower auction in Montreal, buying direct from growers, and on the Internet, by using an online broker and auction service,flowerbuyer.com. Flowers come from all around the world: bulb and corm flowers such as tulips, lilies, and irises frorn Holland; roses from Colombia and Ecuador, tropical flowers such as anthurium and heliconia from Hawaii: protea from South Africa, and potted plants from Canada. Because the pricing strategy of the market is based on volume sales, Clark's purchases the majority of its flowers in box lots, not individual bunches, This enables Clark's to price competitively with mass marketers and grocery chains. Purchase price is extremely important to the profitability of the flower business, and pennies saved on the "cost per stem" and costs savings resulting from more efficient methods of shipping have a strong impact on the bottom line. The industry E-commerce and the opportunity to buy directly from the grower or online suppliers, possibly disintermediating the regional wholesaler, have placed Moral retailers such as Clark's in an enviable position. Traditional channels of distribution are experiencing competition from technology-oriented direct sellers, offering a change in traditional purchasing methods. Twenty years ago cut flowers were distributed to rural upstate New York by wholesaler truck and Greyhound bus,and by rail before that. Typically, the flowers were either grown in the United States and transported overland to regional wholesaler. or imported via broker to a receiving port such as Miami. Florida, and then shipped via truck to a regional wholesale