Market Supply Methods in Light of Consumer Diversity

Yun-Shan Huang（China Productivity Center Agriculture Innovation Department）

It is still in my memory that professors in courses of consumer behavior research and consumer trends talk about the needs to design a sales approach through validation of hypotheses of models. With the changing times, the knowledge from textbooks became background information, replaced by unimaginable methods that yielded incredible results. It is interesting to see if this is also the case in the domain of agriculture. There are, of course, many aspects of consumer research that require careful examination and we cannot neglect the significance of past studies. This article is the inspiration from some readings and cannot claim to present a comprehensive discussion.

From traditional stores to those of diverse formats

Where do you buy flowers? At a flower shop? Online platforms? Wholesale stores? Supermarkets? Hardware stores? Or perhaps somewhere else?

A blog post by Uda Akira titled "A Few More Words," quoted the data from the once-in-five-years National Survey of Family Income and Expenditure conducted by the Japanese Ministry of Internal Affairs and Communications. It indicates that in 2019, for the first time in history, supermarkets and wholesale stores surpassed flower shops as the primary location for purchasing flowers. The proportion of other places, including department stores and online platforms, has also been increasing as channels for flower marketing. After reading Uda Akira's survey, three aspects caught the author's interest:

1. Diverse formats: Various formats, such as online stores and other industries, have been applied in flower marketing. Examples include UNIQLO, MUJI, BOOKOFF, flower subscription services, and vending machines.
2. Expanded customer base: New formats of marketing have not led to a decline of the consumer base of traditional flower shops. They have simply expanded to attract new customers, making it easier for consumers to buy flowers at any place they like.
3. Pricing methods: In the context of these new and diverse formats, emerging channels have adopted different pricing strategies. For instance, online platforms may offer various schemes and discount methods that differ from traditional brick-and-mortar stores.

Let me share my personal experience. I never bought flowers from a flower shop. On one hand, I lack knowledge about flowers and do not know how to select them. I am even afraid of being taken advantage of by the shop owners. On the other hand, I prefer comparing a variety of options, which classic flower shops do not often carry. Shop owners usually recommend their own available products. The limited options make it difficult to find the ideal choice. Finally, I am often unsure of where to buy flowers since flower shops are usually located in specific areas, not necessarily near my neighborhood. So I do not consider shopping for flowers unless there is a specific need for gift-giving. Price is another consideration of mine. I tend to compare prices and assess the cost-performance (CP) ratio in making any purchase. Option A may give a discount based on a higher original price, while option B may be cheaper but lack desirable quality. This makes price an important factor for consumers.

From traditional product to those of multiple formats

On the other hand, packaging and marketing models of products should not be overlooked. The knowledge from textbooks and our own experiences often dictate how certain products "should" be sold and where they can be found. However, in the 21st century, in the era of advanced Internet technology, things have changed significantly.

Traditional marketing approaches emphasize the importance of STP+4P, particularly in product positioning. Clear positioning helps in targeting specific distribution channels, markets, and customer segments. Taking the Japanese food market as an example, consumer habits are divided into the gift market and the home use market, which adopt different packaging and marketing models that significantly impact consumer behaviors.

1. Gift Market: Gift-giving is often practiced during New Year, Obon Festival, and Christmas towards elders, friends, colleagues, etc. Therefore, in the gift market, gift boxes play a major role, with exquisite packaging, good quality, affordable price, and substantial content…as the major consideration.
2. Home Use Market: For everyday household consumption, consumers in the home use market have relatively lower demand for exquisite packaging as compared with the cost-performance (CP) ratio. Major considerations include convenience of consumption, impact on health, and meeting personal or family needs.

However, with the ongoing changes in society, various unconventional marketing and consumption methods have emerged. Examples include Key Opinion Leader (KOL) marketing, subscription models, mobile apps, and group buying. The traditional frameworks on how products "should" be sold and where they could be found seem to have been broken.

Younger generations are driven by various factors in their purchasing decisions. A video of some idols praising a beautiful flower may spark a frenzy of buying similar products. Coffee enthusiasts may subscribe to daily coffee services at a discount to save on costs. Mobile apps and group buying with home delivery became one of the consumer choices during the COVID-19 pandemic.

What can be done at the supply end

As consumer trends and behavior patterns change and deviate from traditional practice, here are the two aspects the supply end can take into account:

1. Adding a touch of imagination and action: Apart from traditional consumption methods, it is worth considering the needs of consumers who have limited access to the products. For example, in the case of flower buyers mentioned earlier, they may not know where to buy flowers, feel shy about entering a flower shop, or fear being deceived. Then, channels of consumption more accessible to consumer can be developed, such as online platforms, hypermarkets, convenience stores, supermarkets, etc.
2. The only limitation is the imagination: While classic marketing strategies are crucial, there is always the chance that the combination of Plan A and Plan B will spark an extraordinary success. For instance, the God of Wealth during the lunar New Year in Taiwan may be similar to that of Santa Claus in the Western culture, as they both convey a sense of happiness, gift-giving, or gold coins. Can they be combined and utilized to capture consumers' attention?

The success of agricultural products and their marketing depends on the resonance produced in the consumers. If consumers are more price concerned, higher-priced products will not be considered even with better quality. If consumers only prioritize convenience, products that are not easily accessible will not be included in their choices.