Throughout the entire report I have looked at landscaping as a social responsibility of the target market. An approach where everyone wants to go Green, in order to achieve this, it is important for landscaping firms to build awareness among their target customers in order to generate revenue out of it. I have gone into depth with the position and progress of the landscaping industry within America. I have explained the current situation, the past situation and where the landscaping industry can go in the future. Market segmentation, positioning, objectives, opportunities and consumer behavior have been discussed throughout this paper. There is an action plan which is based totally upon my views.
The organization started 21 years ago with a truck, an ad in a local newspaper and a whole lot of determination and sincerity. At present, they are the number one landscaping agency within Middle Tennessee.
The organization was founded by Belvie Jordan 21 years ago with a few years of experience in the same field as part of his resume, when he decided he needed to stand out on his own. What Jordan did was to build relationships with his customers who remained loyal even 20 years later. Today, at Jordan’s they provide a wide range of services from landscape designing to mowing to irrigation to hardscapes and grading. At Jordan’s, they make it a point to use only quality products and all of their nursery stock are hand-picked from some of the best growers within the region. Their list of satisfied customers includes Subway, The Hilton, Samsonite, and Mack. (Jordan’s landscaping LLC, 2007).
It is important for a firm to deliver superior products. In most cases customers are not hindered by the prices they need to pay as long as they know they are not compromising on quality or efficiency.
Landscaping Industry within USA
This industry is ideally supposed to conduct business that involves planning, designing and development of land areas like parks, hospitals, hotels, commercial locations, residential areas, and schools by applying land developing properties and design.
There are a couple of industries that work in coexistence with the landscaping sector like single-family housing, carpentry, hardware stores and home improvement stores. Landscaping also includes landscaping counseling, horticulture, landscape architecture, garden planning and so on. (2009 U.S. landscape architectural services industry report, n.d.). The industry is likely to experience a very slow growth for the next couple of years due to low economic growth within the country. The industry is also within its development phase, but with a rise in population, age, and outsourcing of landscaping services, there is a scope for the industry to grow well. (Landscaping services U.S. industry report, 2009).
The US landscaping industry consists of over 70,000 companies and their combined annual revenue equals $40 billion (Landscaping services, 2009). Though there are several large companies, a majority of this industry consists of small companies with annual revenue less than $2 million and hence the largest companies hold only 15% of the share of the entire market (Landscaping services, 2009).
The demand for landscaping is highly determined by the increasing housing construction requirements and also tends to grow when there is a general growth within the economy. The success factors of any landscaping company is ideally determined by the number of orders or the demand for their services, the efficiency of their services and also, to a great extent, their affordability which is largely the one factor that Jordan’s concentrate upon. Most of the costs incurred by landscaping companies are fixed, hence making it very easy for small companies to compete with larger ones unless they miss out on corporate orders. Bigger companies have branches across the country and each branch is customized according to the need of the population within that region of the country. Landscaping is also an interesting area of employment with a decent pay scale.
Landscaping companies provide several features and functions but smaller ones have to offer only one. It is the installation and maintenance of these landscapes that account for over 30% of the entire industry revenue and during colder climates they provide services that include snow removal. (Landscaping services, 2009).
Today, landscaping has become a major part of our lives and it is not necessary for us to look far to find out the effects that landscaping has on our lives. Most of us choose a particular vacation spot, hotel, resort or spa for its landscaping brilliance where many find inner peace and comfort. Today, landscaping can be found almost everywhere, within our schools, our hospital, our places of work and most importantly our respective homes. Even office spaces are highly innovated and a lot of concentration and care has been put into creating corporate landscapes as they come as a cheaper means to employee motivation and satisfaction. Today, even within most suburban residences, people are considering changing their rather child- like and muddy backyards into a garden space that can be part of a family. Today, most landscaping companies work their way around the nation by building up franchises. Though it was thought of to be very difficult in the beginning, it is currently becoming more and more effective, efficient and affordable. The fast and rapid growth of the landscaping industry was initially dulled down by the presence of Do-it-yourself (DIY) home projects and retail outlets which did not require any outsourcing of this kind of work. (Devenish, n.d.).
The growth of the landscaping industry has been attributed to the constant development in technology, communication, packaging and logistics. All these factors have largely been attributed to the success of the landscaping sector. Many companies have provided their own services and perks as a part of their package. Most of them also have created brands of their own as a part of a sustainable act. The whole landscaping business is based on how creative you can get with your services.
Marketing Management Plan
It is important to have a clear objective before any organization starts implementation. A clear-cut marketing plan will help if you get where you want to and that too on time. But, in order to deliver a successful marketing plan it is important to have researched and analyzed the impact of your external and, to certain levels, your internal environment like competition, the current trends that are prevailing within the market, industry statistics and so on. All these factors have a huge impact on your business decisions. A marketing plan needs to be practical in order to be functional. In most organizations, marketing managers are highly responsible for the completion, execution and evaluation of the marketing plan. Ideally, in order to plan an effective marketing plan, it is important to understand the opportunities that are available for your organization within its market and how you can exploit those opportunities. Customer behavior is also a huge criteria especially within the landscaping industry since most of them believe in Do-it-yourself home project and gardens which are also very cost-effective, even though time consuming. Market segmentation leads to dividing the market into various types of customers mostly based on their demand and yield. Like home customers have smaller orders and pay less whereas a corporate customer will have an elaborate order and will be a huge source of revenue, but you need to make sure their happiness in order to keep them in your loyal base. The last factor on the list is positioning, which ideally means placing an image about oneself in the minds of the customer. This also means how a firm would like its customers to look at it.
A Marketing Management Plan for Jordan Landscaping
Jordan’s is a leading landscaping agency within Middle Tennessee and we are going to develop a marketing plan for them with an advertising budget that is 10% of the entire annual revenue.
Ideally, it is important for any industry to understand the opportunities it has in the current scene to build a plan for the coming year. In the field of landscaping, market opportunities would arise with the introduction of innovation into the various services that can be provided by an individual firm. Like in the case of Jordan’s, they provide an all-around the year property maintenance for any project that they have maintained for very competitive rates, which ideally means that the firm does not want to end their responsibility with their project but wants to assure constant satisfaction in order to bring about a strong customer base. Certain opportunities are created while many others are exploited. It is important for any firm to act and think quicker than its competitors in order to get to the top or they shall have to perish. In order to create better opportunities, it is important for any firm to improve technologically, like using tools that are more compact and more durable. For example: choosing the various types of plants and the advanced logistics that transport them from any place within a short period without actually harming the product’s quality.
Customers buy benefits, not products. The benefits a customer receives from a firm’s offering, less the costs he or she must bear to receive those benefits, determine the offering’s value to that customer.
In the landscaping industry, most customers end up being the end users as well. The product or service is not bought for another and hence the level of involvement within this area is very high. Within the landscaping industry, the purchasing decisions will take some time and involvement from every member within the family. Landscaping also involves monetary risks which are higher than in certain other fields, like textiles, certain simpler electronics, and cosmetics. Landscaping at Jordon’s is done in such a manner that nearly every decision is taken after involving the customer into it, mostly because the customers may have a different requirement out of the entire deal and they may not like the end result if not consulted with. Ideally, within the area of landscaping, a firm can have 2 varieties of customers, mostly corporate and the other being home users. There is a process in which customers come to the decision as to what product to engage themselves in. Firstly, they need to identify the problem that they are facing and as to why they have decided they need the vacant land to be landscaped. There may be many answers to this, the most important one being beautification. Once a customer understands and agrees that he has a problem at hand that he would like to resolve, he will start searching for information and since landscaping is a high involvement product it is likely that he would take his time in researching and asking his/her friends and other relatives about the finest option at hand. Word of mouth plays an important role in the business of landscaping, mostly because most people do not forget a beautiful sight all that easily. At this stage, the prospective customer would have acknowledged the presence of quite a few alternatives. It is not necessary to landscape an available plot; a customer can leave it bare, build a spare room, grow his own vegetation or pick up a Do-it-yourself kit from any retail outlet. At this stage he will decide what he needs to do with his problem at hand. When he decides that he wants to landscape his vacant land, then he will contact a landscaping agency that he has decided will do the best work for him within his budget. The purchase is made in this stage once the customer consents to the firm’s proposal. Once the services have been paid for and the work is done the customer will evaluate his purchasing decision. If he finds it satisfying, then it is highly likely that he will come back for more. He will also recommend the same at work, to his friends, colleagues and other family members. Under corporate law, we can introduce bigger establishments than a residential plot, like schools, public parks, hospitals, hotels, business premises and the government. For these individuals, the decision process is slightly different since the project is on an industry level. They will ideally invite quotations from multiple suppliers and will come to a conclusion depending on who is ready to do the best job in the lowest sum. Ideally, under this segment, the level of involvement required is higher and the revenue is higher as well. Most corporate offers will come only to top quality landscaping agencies, because their work is on a larger scale and it also involves a huge investment of time and money. Most corporate will also tend to request for services that come along with the entire deal.
For example: if an international chain of hotels would want you to do their landscaping for their branch in a particular region, then they would also expect the same firm to manage their garden from that day on and this would ideally stay stable under all climatic conditions. Ideally, this is done so that they do not need to go through the trouble of finding another company to maintain someone else’s work. This may also prove to be more expensive.
For home users, their garden or landscaping may occur after a lot of thinking and investment. It is done within their personal home space, a place they get back to after a long and tiring day. Hence it is also an emotional moment to decide what their landscape should depict. Unlike business deals, home users do not lead to a lot of revenue and their plan will be simpler.
Market-oriented firms—those that plan and coordinate company activities around the primary goal of satisfying customer needs—tend to outperform other firms on a variety of dimensions, including sales growth, return on assets, and new product success.
Market forecasting is a more technical field of marketing and involves a lot of field work, research, calculation and evaluative study. There are ideally 2 kinds of sales forecasting – top down and bottom up. There are various methods with which one can evaluate the market potential and worth for a particular industry. Let’s have a closer look at some:
- Statistical methods: These use the various statistical tools that are available for evaluative study like mean, median, regression, correlation and so on. The statistical tool used by each industry may differ form the other and is mostly based upon the comfort of the researcher.
- Observation: Under the observation method, a researcher or a group of researchers are sent to the market to study and analyze the behavior of the consumers and how they react to certain products and also to understand their purchasing behavior. This method requires a lot of analytical thinking even though this method may at first appear to be easier. This tool also has its demerit of being highly perceptual in nature. The report may change from researcher to researcher.
- Surveys: This system consists of a set of standard questions that are answered by the general market in order to understand the feasibility of a particular product within that market. This method is still very popular especially in the introduction of a new product or technology and normally surveys provide a better insight into the thinking of a customer.
The above are just some of the tools that can be used for market forecasting. There are several others as well. Ideally, market forecasting is a time consuming event and requires a lot of patience. Most business activities and decisions are made according to the response from these researches. Some customers may be fast adopters while others are slower and hence certain research material can appear to be biased.
Trust and Innovation
In most landscaping firms, it is very important to bring about new changes into the business since only innovation can help a landscaping business to sustain itself in the market. Over the years, there have been multiple inventions in the field of machinery for the green industry. These have helped in cutting down the time taken for each activity and in turn help the firm in servicing more customers and in a more efficient manner. Some great inventions of all times are the mini excavator, the hydro seeder, the mechanical bed edger and the bark blower. (Great innovations- Chris Bacon, 2009)
As in most other industries, branding also plays a vital role within the landscaping industry. Most of the landscaping industries have built upon a brand image of being an environmental-friendly company. Now, landscaping has become a customized business ordeal where each customer can demand for their requirements. Jordan’s has captured a market by building a brand name which reflects the firm as not only a quality provider but also one that is affordable by the masses.
Today, consumers are ready to pay a higher price for a commodity they know will last a lot longer than most others. This is why in the fashion industry consumers are ready to pay a price that is 20 times more than the actual price of the product. Of course, brand name is also a part of it. But what one needs to understand is that a brand name is a factor of a product that is built up after many years of hard work and this also includes the fact that firms need to provide products that are high on quality to achieve a brand name of its own. Jordan’s has its set of loyal customers who are still with the organization for the same reason. A consumer can recognize a brand based on its services and products. Name recognition is an important ordeal for a business entity to seep into common man’s homes within the market. A company’s brand name is like a “Trade Dress” which is the customer perception of the company around the world or in the case of Jordan’s across the nation.
For the purpose of marketing and reaching the customers, most marketers segment their target market into different groups based upon the type of customer they are catering to. In the case of the landscaping industry we can ideally divide the customer base into commercial and home business since those are ideally the only 2 types of customer segments that a landscape industry can have. Commercial customers will consist of large scale orders and ideally reap a lot of revenue in comparison to home business. The needs and wants of both these sectors are very different from the other and hence landscaping industries need to look at them from different perspectives and cater to them differently.
Decisions about the depth and breadth of product lines must be carefully considered in market segmentation terms. Product lines that are too long or too short can place the company at a competitive disadvantage.
Positioning is creating a difference and building a perception between one’s products from their competitors as believed by their consumer. This makes positioning a function that looks into building an image in the eyes of the customer. Market positioning does not relate to the type of customers that the product can cater to. In order to position your product better within the market, it is important to identify the competitive products that serve the target market; ideally the innovation served by your competitor. Identify what makes your product different from the others. The next vital point would be to understand your customers and your potential customers’ understanding of your product as well as your competitors. Once you understand how the market has perceived your worth, evaluate where you have positioned yourself and whether it is in an accessible manner. It is important for any industry to understand the customers’ requirements out of your offerings. In the landscaping industry, it is necessary for each client’s requirements to be studied separately, since they will differ vastly from one client to another. Once this is done, decide on how you want your services to be positioned within the market space and how to play alongside your competitors. Positioning is considered to be highly effective in reaching towards the customers and determining the future of a product or service.
Clear and distinctive positioning that differentiates a product from others with which it competes is usually essential for developing a winning marketing strategy.
Analysis of current situation
(A) Market Situation:
- The US market for landscaping is supposed to increase by 5.9% to $7.3 billion by the year 2013; (Landscaping products to 2013 (US Industry forecasts for 2013 & 2018), 2009). A huge increase from the figures of this year. This would be mainly because the housing market will grow and recover.
- The US landscaping industry consists of over 70,000 industries and their combined annual revenue is $40 billion (Landscaping services, 2009). Some of the largest companies include TrueGreen, Landcare, The Davey Tree Expert Company and The Brickman Group.
- A vast majority of the companies are all small and their revenues are less than $2 million.
- The top 50 companies hold only 15% of the market.
(B) Competitive situation:
- Jordon’s is the best landscaping firm in Middle Tennessee.
- It has at least 70,000 other competitors within the country, many of which have branches in multiple regions across.
- Home users prefer Do-It-Yourself kits in comparison to paying for landscaping.
- Retailing of DIY has proven to bring down the market share of landscaping companies.
- TrueGreen and Valley Crest are the best landscaping companies in the USA and accounted annual revenue of $1,500 million and $935 million respectively in the year 2007. (2008 LM 100, 2008).
- Jordan’s was not even there in the list of top 100 for the year 2008.
(C) Macro-environmental situation:
Macro environmental factors do not have a direct effect on the business, neither can the business control or limit them in any way. There are many types of variables that are included in an industry’s macro environment like, political environment, technological environment, socio-cultural environment and the international market. Ideally, these variables can either prove to be a threat or an opportunity to the industry and this need to be considered while making strategic plans in order to achieve a competitive edge within the market. Most of the forces in the macro-environment cannot be altered by the activities of the firm, but these will definitely influence the firm’s progress and hence the business entity needs to find a way to work around these variables in order to sustain in the market. (Macroenvironmental forces, 2009).
Some of the macro-environmental factors that affect the landscaping industry are:
- The age of the population can determine a higher growth in landscaping needs. Today with an increasing rise in aging population, it is a great opportunity for landscaping to grow.
- With over 20% of the population in the disabled segment, there will be a higher demand for landscaping needs within the USA.
- There is a rising interest in Going Green among the citizens of the world and most of them are becoming environment-friendly. This is the right moment for landscaping to seize its opportunities.
- With a rise in the education level within the country, many are able to earn a better income in comparison to the country’s status a decade ago. With a lot more income coming in, people have less time in hand and more money which makes landscaping easily affordable.
- With growing demand in employment opportunities, employees and staff are also becoming choosey about their place of work. With the infrastructure playing a vital role, corporate giants are paying a huge percentage on landscaping and beautification of work space.
- Lifestyles have changed in most parts within America. Most sub-urban and urban residential locations are well maintained today. People want their environment to be beautified.
- Today people are becoming socially concerned about the environment and their social responsibilities are increasing which is why Green thoughts are spreading and people want more trees and plants around them. The natural way is the way to go.
- With the coming of the wireless irrigation systems which save water consumption; people are demanding services from landscaping industries in order to fulfill yet another social responsibility of theirs. This new system will utilize 20% less water than otherwise. (Headline news: Remote- Accessed wireless irrigation system can conserve water, labor, 2009). The legal requirements within the landscaping front are what stunt the number of landscaping industries within the country. Each state is governed by its own rules (except for the state of Vermont). To set up a landscaping firm you need to be highly educated in the field of the same and ideally most licenses require landscaping professionals to attend a set of exams.
(D) Past product performance:
- The landscaping industry is still within its development phase and has not yet obtained complete growth.
- Unlike in the past, in the present time there have been technological advancements within the field of landscaping.
SWOT analysis evaluates the strengths, weaknesses, opportunities and threats that are handled by an organization or by a business venture. Ideally, a SWOT analysis includes all the internal as well as external factors that affect a business entity. This technique was introduced by Albert Humphrey using data from Fortune 500 companies. Ideally an organization needs to determine what the various objectives are when he/she intends on doing a SWOT or scan analysis.
A SWOT looks into the following features:
- Strengths: these factors determine what can help a business to sustain itself and what can be used as a positive deal to achieve their goals and objectives.
- Weaknesses: these are attributes within and around the environment of a business entity that affect the business directly. In most cases they may prove to be very harmful in nature.
- Opportunities: these are conditions that prevail outside the organization that may prove to be very helpful towards achieving their goals and objectives.
- Threats: these are the external conditions that can prove to be very harmful to the existence of the business entity.
It is important for any business entity to identify their SWOT since only then can they work out a strategic course towards achieving their goals. Ideally, the strengths and weaknesses of an industry are those that arise from within, that is internal factors which can be controlled to a great extent, whereas opportunities and threats are external factors of an organization that cannot be controlled from inside.
- Great growth prospects in the field of landscaping and with great home improvement progress on the way, better revenue earning capabilities coming up within the next 3 years.
- There are very few alternatives available to consumers besides landscaping and hence it always turns out to be the better option.
- Jordan’s target on affordability; hence making them more attractive especially to home business clients.
- Pricing is a concern among most customers since landscaping is always an expensive option.
- Huge expenditure to be used for advertising and response does not equal expenditure.
- With the upcoming rise in Green Revolution, there is great opportunity in the field of landscaping.
- The country’s economy will grow rapidly in 3 years and hence will help landscaping to reach its heights.
- Government regulations against landscaping firms, laws that preside within each state govern these firms.
- For license in the landscaping industry, you are required to be a professional with advanced education in the same field. You also have to undergo several exams in order to get a professional permit.
- After assuming that we are spending 10% of our annual revenue into the field of advertising this financial year, we want to increase our revenue to at least $ 4 million from the under $2 million that we are currently earning.
- Need to look for at least a 25% return on investment within the next 3 years.
- Increase expenditure in the technological field; this will help not just our employees but advanced tools will also make work easier and less time- consuming helping us to serve more customers and build better relations.
- Import trained and skilled professionals within the field of landscaping since one skilled professional is worth 3 non-experienced workers.
- Though Jordan’s is the number 1 within Middle Tennessee, it is important for the firm to grow further on to different regions. Though this may be expensive, but their affordability factor may prove to be a great business incentive.
- Increase the marketing expenditure and promote themselves among corporate giants rather than home clients. Ideally, one corporate deal is more profitable than multiple home business deals.
- Set up experiments and promote innovations among employees within their daily work. Innovations will definitely provide an edge in market sustainability.
- Increase the target population that you are aiming at through mass publicity and word of mouth.
- Change tools and techniques for newer and less time-consuming ones.
Marketing action plans/Plan of Action
- Promote going green. It’s a social responsibility and everybody needs to be a part of it. Promoting the green revolution will explain to the target audience their social responsibilities within the society and how they can help in making the world a better place to live in.
- Sponsor marathons and walks that support the cause of green revolution.
- Provide discocunts to old and disabled people. Since this bracket of the population can actually provide maximum revenue, a discount would be very appealing not only to them but also to the government.
- Let your clients tell you what they want; it makes your work a lot easier. Involve people in every stage of the activity; this will keep them in the loop and they cannot get back at you if anything goes wrong.
- Promote activities that deal with cleaning up your environment. Let your employees spare a few hours of their day off to clean up your local beach or park; this will also give you great publicity.
- Provide rebate coupons on magazines that promote gardening and going green like Lawn and Landscape and the American Gardener.
The data and figures below is a complete assumption.
Cost estimation chart $
|Current Annual Income||2000000|
|Advertising Expenditure(10% of Annual Revenue)||200000|
|Other Media & Promotional activity||25000|
|Expenses towards technological advancement(a one time expense)||40000|
The above table has not considered human resource, land maintenance, raw material, inventory costs and miscellaneous expenditure. This has been created to explain costs that are involved in advertising and promotional techniques. An expected income of $ 4 million approx. is to be accrued by 2011 with a high rate of return from corporate clients.
Product Penetration strategies
- Increasing the customer’s loyalty towards your brand by increasing awareness of environmental protection.
- Extend yourself to markets that have a better customer base in order to increase revenue.
- Market yourself to corporate giants better. This is always the best example of working towards Pareto’s principle (80% of your revenues come from 20% of your customers)
- Increase the usage of certain products within the market and among consumers which are unique to that region.
- Maintain this marketing plan and wait for results.
- When getting successful, slowly cut down advertising costs but remain to be loyal to your society and clients. Everybody loves a company whose main tagline is to maintain business ethics.
- Devenish, A. (n.d.). Franchise business changes the landscaping terrain. Franchise Prospector: Entrepreneurs guide to Franchising.
- Great innovations- Chris Bacon. (2009). Hydrograss corp.com.
- Headline news: Remote- Accessed wireless irrigation system can conserve water, labor. (2009). Lawn & Landscape: The Industry’s News and Resources Center.
- Jordan’s landscaping LLC: Where landscaping is not just beautiful it’s affordable. (2007).
- Landscaping services. (2009). First Research. Web.
- Landscaping services U.S. industry report. (2009). IBIS World: Where Knowledge is Power. Web.
- Landscaping services. (2009). First Research. Web.
- Landscaping products to 2013 (US Industry forecasts for 2013 & 2018). (2009). The Infoshop.com: by Global Information, Inc.
- Macroenvironmental forces. (2009). Enotes.com.
- 2008 LM 100. (2008). Landscape management.
- 2009 U.S. landscape architectural services industry report. (n.d.). Research and Markets.