Marketing price and place
...osal (or recycling). Adding a harvest date on the label of cut trees may reassure customers about freshness. To increase sales, tree marketers can persuade new households to display trees and convert artificial tree users into natural tree buyers and encourage organizations to display trees (perhaps by offering additional services, such as delivery, setup, decoration, care, and removal). To encourage existing customers to buy more than one tree (e.g., a formally decorated tree, a family tree, a tree for outdoor decoration), tree retailers could post signs limiting households to three or four trees and test the limits to make sure that the signs have the desired effects on sales. Product branding. A strong brand name can increase a product's perceived value. The letters in a brand name, its pronunciation, its symbolism, and its imagery can all contribute to its success. When brand recognition is the objective, Lerman and Garbarino (2002) recommend using nonwords (e.g., "monit") and irrelevant words (e.g., "parade") as brand names. To boost brand recall, they recommend using irrelevant words and words linked with advertising (e.g., "north mountain" or "glen crisp"). Another option is to communicate additional value to consumers with insignia. State associations in California, Indiana, Kentucky, and Michigan, for example, have developed brands and logos to promote locally grown trees. Ecolabeling can help highlight the environmental benefits of natural trees. Studies have found that ecolabels can boost sales for some market segments (e.g., Wessells et al. 1999). Product assortment. How broad a product line should one offer? Presented with two equally attractive options, people sometimes avoid making the choice. Therefore, there should be clear differences between the products in the product line. The US Department of Agriculture's Christmas tree grades include eight color-coded tree height classes. Marketers may be more successful if they focused on only three groups. The compromise effect suggests that, when consumers face a choice among three options that they can rank, most tend to choose the middle option (Simonson and Tversky 1992). Thus, if a retailer had two classes of trees, adding a third superpremium class might encourage some people to trade up and buy the new midgrade. To boost sales of the top class, marketers can increase the salient quality difference (e.g., tree height) between the middle and top classes proportionately more than the price difference (Guiltinan 2000). Showing customers the final product, a fully decorated tree, can inspire customers to decorate their trees just like the model. Impulse sales of decorations and other complementary items (e.g., wreaths, candles, wrapping paper, foods, and other holiday products) can make significant contributions to profits. However, it is important not to offer too much variety. A study in 24 supermarkets found that eliminating some duplicate items increased sales (Willard Bishop Consulting 1993). Price Tactics Christmas tree marketers can apply principles based on demand elasticity studies and psychology to improve pricing decisions and boost their marketing effectiveness. Demand elasticity and pricing. Davis (1993) examined how familiarity with different tree species was related to willingness to pay. Using data from Hamlett et al. (1989), he found that people may pay more for fir trees than spruces and more for spruces than pines. Prices probably should vary accordingly.Christmas tree marketers can use price to signal the value they offer. Because of the power of first and last impressions, marketers who want to create a low-price image expose consumers to low prices at the beginning and end of their experience. Similarly, showing shoppers quality images at the beginning and end of their visits will reinforce that image. Some marketers follow a prestige pricing strategy and use high prices to signal quality. If customers are concerned about price, dividing the price by the number of days the tree will be on display may help. Because "pennies-a-day pricing" can have a negative effect in some cases, it probably should be tested first, however. Another signaling option is to use a low-price or price-matching guarantee. With a reasonable refund offer and list of competitors eligible for the price match, this type of guarantee can boost patronage intentions. The order in which prices are presented can be important. Because consumers do not always remember prices, tree marketers may be able to increase their price expectations by showing consumers the superpremium price class first; that price becomes a standard for comparison. When marketers offer additional services (e.g., delivery, setup), quoting the prices for the services separately at the end of the transaction may be better than offering them as a bundle. However, if the retailer wants to sell the bundle of services, presenting a bundle price and letting customers drop components may generate larger transactions than presenting a base price with add-ons. Tree marketers should exercise caution when discounting their products. Anderson and Simester (2001) found that, when stores had too many sale signs, total volume decreased. Prices should be raised in small increments and lowered in larger, more noticeable steps. When prices are reduced, it helps to list the regular price and the percentage discount. Suri et al. (2000) concluded that, when retailers use fixed prices, consumers receive a signal of quality. When price discounts become common, consumers focus more on the price and the sacrifice needed to make the purchase. When temporary incentives are employed to boost sales, Munger and Grewal (2001) recommend offering one option free rather than lowering the price of the product. An option that may encourage households to buy more than one tree is multiple unit pricing. In the supermarket, "two-for" and "three-for" specials can boost sales. A related tool, called anchors, involves suggesting a certain number to buy or a reason to buy more. When consumers see a sign that gives them a reason to buy another unit (e.g., "buy one for your neighbor"), sales may increase. This illustrates how pricing can interact with other marketing tools to boost Christmas tree sales. Promotion Tactics Many promotion options are available for small businesses. An important consideration is timing. Scheduling promotions when customers are interested and able to buy can improve their effectiveness. Promotion options for Christmas trees can be divided into advertising, merchandising, and sampling tactics. Advertising. Every component of an advertisement needs to communicate the desired message. Childers and Jass (2002) found that the more consistent an advertisement's typeface, visual cues, and copy, the higher the recall of the message. Several communication tactics appear applicable for tree marketers. Florkowski and Lindstrom (1995) found that attitudes toward natural trees varied by age and gender, which suggests messages should vary accordingly. Advertising and public relations can educate consumers about trees. Davis (1993) noted that knowledgeable consumers were generally willing to pay more for natural trees and suggested that tree marketers invest more in educational campaigns on tree species. Tactics to generate publicity include developing relationships with local media and encouraging news stories on how trees are produced; how to select, care for, and recycle trees; trivia about Christmas trees; or the history of the tree farm. Christmas tree marketers often use outdoor advertising. Attention to outdoor advertising tends to be higher if the ad contains artwork instead of photographs and if it is placed near highway signs or exits and usually on the right side of the road. Clear signage, detailed maps, and directions that list mileage and landmarks can help make trips to tree retailers more pleasant. Some growers advertise using direct mail. One option for enhancing buyer loyalty is to develop a customer newsletter. Besides announcing special offers (e.g., buy a pumpkin and reserve your tree or "Bring Your Neighborhood" day and save 10 percent), the newsletter can include information on tree care, recycling options, and allergy issues along with holiday decorating tips and recipes. One cut-your-own grower sent newsletters and maps printed on colored paper to several mailing lists of prospects. As each car arrived at the farm, he recorded the color of the driver's map to measure the effectiveness of each mailing. Using vehicle license numbers and a computerized customer database, marketers can quickly call up a customer's purchase history, greet the family by name, and ask whether they want a similar tree this year. Referring to people by name can improve the persuasiveness of the communication (Howard et al. 1995). A promotion in New Orleans involved 20 cut-your-own growers and a pizza delivery specialist. The pizza restaurant chain advertised on television that each delivery would include a map showing the 20 local growers and a $1 discount coupon for a tree purchase. Hinson et al. (1992) found that the average sales at 10 farms increased 13.7 percent over the prior year. Of the 20,000 coupons printed, about 2.4 percent were redeemed. This promotion helped diversify each farm's customer base. If growers were able to convert new customers into loyal buyers, the promotion also produced long-term sales gains. Merchandising. Displays and signs at retail operations and at informational booths, trade shows, and community events can generate buyer interest. Signs can boost sales even when prices are not reduced (Inman and McAlister 1993). Both visual images and text can improve purchase intentions (Bone and France 2001). Artwork should be placed on the left side of the sign, package, or print ad; text is best remembered when it is on the right (Rettie and Brewer 2000). Displaying product benefits on a sign is also helpful, as is adding descriptive words to some items. Because some people prefer to touch products, using signs such as "Feel the Quality" can increase impulse purchases (Peck and Childers 2003). Some firms link sales with a special cause. Barone et al. (2000) found that when the perceived motivation behind the company's actions was positive, the customer response tended to be higher. Events that offer discounts to customers who donate to a charity tended to be more effective when the sponsor did not benefit (Ellen et al. 2000). Incentives (e.g., for each tree purchased, $1 will be donated to a charity) appeared to be more effective for discretionary products than practical ones (Strahilevitz and Myers 1998). Christmas trees could benefit from such promotions, but the cause or sponsored program should have a logical fit with the firm: An ill-fitting cause or program can hurt a brand's image. Donating gift certificates to charity fund-raising auctions or donating trees for display in public locations may also increase awareness, improve the reputation of the operation, and help tree marketers boost customer counts and sales. Sampling. By offering samples, a tree retailer who also sells hot chocolate or apple cider can generate beverage sales and increase browsing time. Another idea is giving children miniature wreaths with tags listing where trees can be purchased. Place Tactics According to the National Christmas Tree Association (2002b), about 33 percent of consumers purchased their natural trees at a Christmas tree farm and 54 pe...