ASSESSMENT TASK 1 BSBMKG506B
A Market Research Plan for D.A. Garden Supplies
Submitted by: MARTIN R. RETUERMA STUDENT# 5819
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INTRODUCTION AND PROBLEM IDENTIFICATION
David and Alison had put up a garden supply and nursery business and have been operating for thirteen years. The services they mainly offer include landscaping and garden maintenance. Over the years, D.A. Garden Supplies has prospered and added extra amenities. They opened a small café inside the nursery and later on expanded to larger dining operations which cater variety of food and beverages. Their service was not just limited to dining but served food for takeaway as well. They are situated just opposite a small shopping centre which includes a supermarket, department store, café and some specialty shops. Nearby is a large Bunning’s store which is a multipurpose hardware shop which also retails garden supplies, equipment and accessories. Then in the last two years, their sales started to drop. Although their gross revenue remains satisfactory, they are questioning what has gone wrong and would like to figure out by what means to amend with the situation.
HYPOTHESIS
Sales were successful over the years as steady stream of customers patronizes D.A. Garden Supplies. The nursery and landscaping business kept their regular consumers satisfied with the quality of their goods and services. David (owner) maintained a good relationship with his customers as he provides continuous professional advice and ensures their gardens are maintained. David and Alison (owners) extended their business to having a café then followed by a larger dining. This expansion made an impact to their business. Aside from allocating a capital for the operations of this new business, partially their focus had outgrown and time became insufficient to nurture both industries.
OBJECTIVE
The overall objective is ‘to determine the factors that affect the progressive drop in the net profit of their garden supply and nursery business ’.
MARTIN R. RETUERMA / STUDENT# 5819
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DESK RESEARCH
Purpose
The desk research will attempt to answer the following:
1. Should D.A. Garden Supplies invest more money in the café and focus on improving it? 2. Why the garden business is declining? 3. What is the impact of Bunning’s store in terms of trading hours and proximity? 4. Are they a garden business or a café business? 5. Are the customers of the garden business using the café and vice versa?
Procedure
The research will begin within with David and Alison. Their permission will be asked to consult the person who may have access to their records. The researcher will furnish them information about the pre-requisites of the research and that their presence is expected during the meetings. All employees who run the business including the gardeners, landscaping consultants, cashiers and café staffs may be part of the research. Access to documentations and information provided by staffs is needed.
A research outside the business premises will also transpire. Customers will be evaluated through a survey tool. Their feedbacks are highly anticipated to generate answers to the problem. Information on the presence and services provided by nearby business centres such as shopping malls, restaurants, hardware shops and other industries with similar retail products as D.A. Garden Supplies will also be investigated.
MARTIN R. RETUERMA / STUDENT# 5819
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RESEARCH METHODS USED
The following are the methods used to identify the factors that may have affected the progressive drop of gross revenue of D.A. Garden Supplies: 1. Assessment of sales records, trading hours and services offered 2. Problem identification and discussion with owners and staffs 3. Customer survey (150 Respondents) 4. Statistics from the council about possible competitors within the area
PRESENTATION OF COLLECTED DATA
1. Assessment of Collated Records The data presented in the table below were generated from the records of D.A. Garden Supplies.
D.A. Garden Supplies Nursery Garden Supplies
A. SALES EVALUATION DATA Contribution to Sales Overall Profit Declined 41% Declined 34%
Remarks 5% drop 5% drop
(but increased sales of mulch)
Landscaping Project Café Trade
No Change Increased
10% 15%
--2-3% growth
B. TRADING HOURS Monday Tuesday Wednesday Thursday Friday Saturday Sunday
9 am – 6 pm 9 am – 6 pm (9 am – 9 pm in summer) 8 am – 6pm 10 am – 6 pm C. SERVICES OFFERED GARDEN BUSINESS
Nursery Garden supplies Landscaping Landscaping consultation Landscape maintenance
CAFÉ TRADE Sit-in dining Takeaway food Beverages Variety of food (sandwiches, salads, gourmet pies, sausage rolls, quiches and savoury slices, chips/wedges, cakes and slices, ice creams and sorbets, kids menu, soups and casseroles in winter)
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2. Problem identification and discussion with owners and staffs A discussion was conducted with the owner and staffs of G.A. Garden Supplies. Staffs were encouraged to vent out their concerns and point of views on the progressive decline of their sales in the last two years. Owners also presented their assumptions. The summary of the discussion were simplified and collated. Majority of the staffs suggested enriching the skills of the gardeners and landscape consultants through trainings and workshops. It was also discussed to expand the nursery by increasing the number and variety of plants. All staffs were encouraged by the owners to strengthen their rapport with the customers by providing excellent customer service. The talk enlivened the spirits of staffs to actively work together while marketing strategic plans are still in process. 3. Customer survey (150 Respondents)
The researcher distributed questionnaires to 150 households living within 10 kilometres from G.A. Garden Supplies. Included in the survey are their existing clients and possible customers. Their responses are summarized as follows: Age of home gardeners a. 15 - 25 b. 26 - 35 c. 36 - 45 d. 46 - 55 e. 56 - 65 f. 66 and up
5% 9% 16% 14% 35% 21%
Gender of home gardeners a. Male b. Female
65% 35%
Socio-Economic Status a. Student b. Part-Time Worker c. Full-Time Employee d. Retired e. Unemployed
10% 20% 36% 26% 8%
What influences a home gardener to purchase plants and gardening supplies? a. TV gardening programs b. Advertisements
17% 15%
MARTIN R. RETUERMA / STUDENT# 5819
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Occasions Seasons Impulse (when they see plants and it looks nice and affordable)
11% 9% 48%
Availability of home gardeners to visit a nursery or garden shop a. Monday to Wednesday b. Thursday and Friday c. Saturday d. Sunday
15% 27% 34% 24%
Time preferred to visit a nursery or garden shop a. Between 7 am – 11 am b. Between 11 am – 3 pm c. Between 3 pm – 7 pm
52% 14% 34%
How often do people visit nursery or shop for nursery products? a. Monthly or more often b. Every 2-3 months c. Once every 6 months d. Once a year
46% 38% 13% 3%
Where do home gardeners buy their nursery and gardening supplies? a. Hardware stores b. Nurseries c. Discount department stores d. Food markets e. Variety supermarkets f. Markets
27% 27% 19% 12% 11% 4%
Where do home gardeners purchase plants? a. Nurseries b. Hardware stores c. Discount department stores d. Variety supermarkets e. Food markets f. Markets
57% 19% 10% 9% 3% 2%
Reasons for choice of outlets a. Convenience b. Range of Products c. Quality d. Price
28% 33% 23% 16%
Expectations of customers at a retail outlet a. Quality of plants b. Labelling c. Ability of staff to provide useful information d. Range of plants offered
34% 21% 14% 31%
What do customers expect in a nursery or garden shop as perks a. Discounts for existing customers b. Updates on new plants and gardening products c. Gardening workshops d. No charge for deliveries within 10km from the shop e. Free coffee, tea or lemonade f. Free consultation about products
29% 13% 21% 10% 16% 11%
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Main reason for visiting D.A. Garden Supplies a. Buying plants and gardening supplies b. Café services c. Just checking/browsing for best deals
33% 27% 40%
4. Statistics from the council about possible competitors in the area
Shopping centre - situated across the main road where D.A. Garden Supplies is located. This small suburban shop includes a supermarket, department store, café and 12 specialty shops.
Bunning’s store – located about 2 kilometres from D.A. Garden Supplies. This is a multipurpose household warehouse retailing diverse hardware products, plants and garden supplies.
ANALYSIS OF DATA
There is a continuous increase of 2-3% yearly in the sales of the café in the last 3 years which currently contributes 15% to the overall profit of the business.
There is no change in the sales of landscaping project. A steady contribution of 10% to whole revenue of the business has been noted.
Sales in the garden supplies have dropped by 5% but sales of mulch (drought-proofing related product) increased and contributed to 34% to total earnings.
Trades in the nursery products have declined in the last 2 years. These products presently contribute 41% to the overall income of the business.
There is recognizable decline only on the sales of plants and garden supplies.
Store’s opening hour is a bit late for customers whose only available time to shop is early in the morning.
MARTIN R. RETUERMA / STUDENT# 5819
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The store closes early during the weekends.
Most of the home gardeners are those who live within 10 km from D.A. Garden Supplies and are between ages 56 to 65. Majority of them are male and works on a full-time basis or has a regular job.
Home gardeners, are not usually influenced by gardening TV programs, advertisements, occasions or season of the year to buy plants, they purchase on an impulse. Such when plants look appealing and affordable.
Majority of the selected population visit or shop plants or gardening products monthly or more often. They are available to visit nursery and gardening shops on Saturdays and between 7am to 11am.
They usually buy their nursery and gardening supplies in hardware stores and nurseries. However, plants are largely purchased at nurseries. The reason for the choice of outlet depends on the range of products on sale, followed by convenience, quality and the price respectively.
Home gardeners expect quality plants and products at their selected outlets and as perks, they would love to receive discounts more than anything else. They are also interested in some gardening workshops (31%) and free hot/cold drinks (16%). Updates on new plants and products, free consultation and free deliveries at nearby homes are extra bonuses they anticipate respectively.
Generated through survey, 33% of customers do visit D.A. Garden Supplies to buy plants and gardening products and 27% patronizes their cafeteria. However, greater part of the home gardeners comes in not to purchase right away but just to check and browse their shop for best deals. Just as same with other businesses, where shoppers would go to the mall and check for items on sale, in promotion and are affordable. Good deals are predominantly the reasons for purchase of consumers from all industries.
MARTIN R. RETUERMA / STUDENT# 5819
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CONCLUSION
The performance data of D.A. Garden Supplies suggests that income of their cafeteria is continuously rising. However it contributes only a low portion to their business. On the other hand, landscaping services has maintained its steady contribution to the income of their business. Further, high revenue generates principally from nursery and garden supplies sales. However, their net profit in this section is constantly declining. Although their gross revenue is still acceptable, their business is at risk of liquidation if decline becomes uncontrollable and unstoppable. Nursery and garden supplies contributes 41% and 34% respectively to the overall profit and apparently are huge contributions. The management should focus reinforcing and boosting their garden business since it makes more earnings. Moreover, instead of improving the deals of their main business, they placed more attention on refining and expanding the café and problem arose from this mismanagement.
RECOMMENDATIONS
No modifications suggested for the landscaping business. Consultants should maintain their rapport with the customers by continuously providing services in a steady level. They can reinforce their services as needed but avoid drop and instabilities in the quality of their provisions.
Cafeteria may maintain their services as is and no further expansions suggested. Since it increased the overall sales by 10%, owners may still continue the café however, limitations must be set by keeping their services the way it is at the meantime. Developments may be deliberated as desired once the garden business has stabilized, recovered and vastly profited.
Suggests extending operating hours from 7am up to 7pm all days of the week. May extend up to 9pm during the summer. Majority of the home gardeners’ works on a regular basis, thus most of them are only available to visit businesses after working hours or during the weekends.
Additional staffing to work at PM shift may be required. Part-time workers may be hired to work during unfussy hours and/or late shifts depending on the discretion of the management and staffs. MARTIN R. RETUERMA / STUDENT# 5819
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Provide advertisements and offer wide variety of plants and products suitable for special occasions and appropriate for the season. New products should be available each month since customers are looking for remarkable variations. Ensure that items are interesting, affordable and worth their money.
Advertise creatively in several ways. May market the business by posting ads on newspapers, magazines and internet, utilizing radio announcements, distributing flyers, print-ads and brochures. Publicize offers, promos and discounts on a regular basis.
May also take advantage of disseminating information via email and text messaging. Social media is another productive approach to expand the coverage of target areas. If within means, may create a website which contains the services of the D.A. Garden Supplies. May also process online orders and door to door deliveries. Out of 10 km zone hence will be charged reasonably to cater to customers without transportation means. In relation to this, website must contain all the necessary photos, description, fees and information that consumers may need.
On site, guarantee that staffs are able to provide useful information about their products and label items appropriately with descriptions and prices.
Conduct monthly research for new trends in gardening and landscaping. May also have an ocular visit to other similar shops and take note of their advances which may be adopted, adapted and applied to enrich the strengths and scopes of the business.
Compare rates from other similar stores and ensure retail prices are reasonable. See to it that plants and products vended meets the quality of other nurseries and garden shops.
Provide monthly workshops or trainings to garden business staffs to update them with the new trends and learning.
Staffs must be encouraged to be innovative as well. Once in a while, team building workshops must be implemented to drive and motivate administrators and staffs to actively work together. Having a pleasant work environment and maintaining a good relationship with co-workers are keys to a fruitful industry.
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Offer free consultation, gardening workshops/updates and other perks to attract more customers. Bonuses may also range from the following (may be modified, listed only as examples): 1.
Buy 1 take 1
2.
Buy 2 and take 50% off on the next purchase
3.
Purchase 10 varieties of plants and get a beverage or food freebies.
4.
discount on plants that are off season
5.
free hot/cold beverages but limit to one cup or glass per person
6.
no charge for deliveries within 10 km from the shop
Lastly, report changes and seek consultation on any significant drop or surge in sales and whenever needed to monitor the developments occurring in the business.
TIMING
WEEK
ACTIVITY
1 2-4
First consult with D.A. Garden Supplies administrators and staff Undertake desk research Look into the company sales, records and data Identify problem and formulate hypothesis and objectives Contact local council Analyse information and scope the project Second consult with D.A. Garden Supplies administrators and staff Draft surveys/focus groups (home gardeners) Organise printing Undertake research/distribute questionnaires Assess and analyse collected data Generate conclusions and recommendations Prepare report Third consult with D.A. Garden Supplies administrators and staff/Meeting Schedule meeting for follow-ups
5-6
7-10 11 12 13 as needed
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REFERENCES 1. www.bunnings.com.au 2. www.brimbank.vic.gov.au
MARTIN R. RETUERMA / STUDENT# 5819