Contamination of the final product will result in the cargo being rejected at the port of entry. Chapter four integrates business theory with the data and observations in an attempt to build a meaningful picture of the economic potential of this proposed venture.
Background of The Research
Climatic conditions in most countries of the southern hemisphere are excellent for growing flower crops. Primary data will be collected from persons involved in the cultivation and marketing of the crop.
Project and Trial Location
During this process, severe stress is placed on the seedling as many of the roots are cut during the separation process. Planting seedlings with the roots bent upwards is called "J" rooting and results in poor development of the transplanted seedling. Consequently, the seedling is not stressed at any time by the actively growing stage of the seedlings.
Light Sources
Excellent Flair
Excellent Flair is a free variety in the sense that no royalties are required to be paid on the finished product marketed and as a result, most growers wishing to plant Pink)' Flair must first master the art of growing Excellent Flair before they get the chance to breed. Pinky flair. Any grower wishing to plant this variety must first successfully grow Excellent Flair before growing Pinky Flair, to keep the quality of the final product at a uniformly high level. This cultivar does not show the same tendency to flower as Magical Beauty and as a result the stem lengths will be longer than those produced by Magical Beauty.
Trials conducted on this variety revealed that this variety will flower regardless of day length. This can be a desirable trait in that the significant expense associated with installing lighting may be a sidestep if one chooses to grow this cultivar. The vigorous growth mode of Magical Beauty on the right with Magical Red on the left.
Although the agent representing these varieties stated that this was one of the best colors she had seen on this variety from all the trials conducted so far. Further trials and observations should be carried out on this breed to determine the potential this breed has to offer.
Market Data For The USA
Vissers (2003) indicated that 40 percent of the units in Table 2.19 should be deducted as these were wholesale prices and not grower prices. According to the United States Department of Agriculture Inspection Service, the Northeast region of the United States is the entry point for the Dutch flower industry. According to the section The effect of the protection afforded by the grant of a plant breeder's right under this Act is that any person intending to obtain a preliminary authorization during the term of the plant breeder's right must, with a license under section 25 or 27, do so.
If a breed is not registered, the breed enters the public domain, which does not give rise to any of the rights stated in Article 23 of the PBR Act. Marginpar, the registered holders of the license for Pinky Flair, have used excellent marketing techniques to ensure that demand for the product exceeds supply. According to the Agricultural and Industrial Marketing Company, the following factors contribute to hindering the development of the cut flower industry in KZN.
In the case of the Uniflo rose group, three growers are based in KZN and are part of a group of 10 growers who combine their product to achieve the required volumes. Gerhard van Egmond of the Vegemoflora company, says they have to absorb between R1.60 -R2.00 per kilo in additional costs in order to get their product to Johannesburg.
Product Marketing
Retail Florists
This group of customers typically has access to flower auctions where they can purchase their needs. As this group of customers sells several thousand sterns per week, it would be beneficial if an agreement could be reached whereby a fixed quantity at a fixed price per week could be delivered to each prospective customer. Rene Vissers, of United Flower Trading, a Dutch flower wholesaler, indicated that this distribution method works well, resulting in maximum returns for growers and wholesalers.
Fishers indicated that they had built a reputation for supplying only the highest quality to retail florists and subsequently demanded only the best product one had to offer. Steve Densem of Vale Flora indicated that they would be interested in negotiating fixed quantities, delivered at a fixed price. Arrnstrong (2001) indicates that by 2005 more than 50 percent of flower sales in European countries will be sold through supermarkets with this figure potentially as high as 60 percent in Switzerland and the United Kingdom Dave Swart of Sunshine Flowers suggests that product volumes must be high , of an acceptable grade and of a low price to meet the requirements of this group of customers.
According to SAA Cargo, freight space on the Johannesburg-New York route was expensive and not freely available, with preference given to existing customers. After contacting British Airways Cargo Division it was indicated that cargo space to New York via London would not be a problem. It was felt that the stopover in London would not result in degradation of the product, provided the product was kept in cold storage. .
Crop Fertilisation
Excellent bud and cimus formation on Excellent Flair due to the high level of fertility available to the growing crop.
Pests And Diseases
Rust
The symptoms are a yellow spot on the top of the leaf with orange to yellow colored pustules on the lower leaf surface. According to Agrios (1998), rust spores can be transmitted for hundreds of kilometers and then washed from the air by rain. Having covered relevant considerations regarding Hypericum culture, it would have been noticed that the timing of harvest would depend on the lighting of the crop, to ensure that flower bud initiation would take place over 18 hours.
Several options were considered, time constraints unfortunately did not allow full exploration of available lighting options. The success of a propagation unit depends on the quality of the plant material that enters the unit, various observations revealed that the most suitable material is from the middle of the stem, this material gives the most stable rooting and development of seedlings. According to Ilkova & Donnelly, the main objective of any firm is the creation of wealth for its owners, coupled with the maximization of the firm's value.
An investment decision affects the company's ability to generate future cash flows and undertake projects that will lead to higher future cash flows, resulting in the maximization of the company's value. Early adopters are those consumers who imitate the behavior of innovators (Bhowan & Lord 2002).
PEST Analysis
Political /Legal Environment
Economic environment
It assumes that the customer is no more important than any other aspect of the microenvironment. Looking at two aspects of the competitive environment will enable an understanding of the three strategies. Once product acceptance is achieved, it is often cheaper for competitors to enter the segment as many of them.
Lynch (2000) points out that according to Porter neither a low-cost strategy nor a product differentiation is possible for an organization in the entire wide range of the market. A focused strategy results when an organization concentrates on a specific niche in the market and develops a competitive strategy to meet the needs of consumers within that niche. To realize the highest profits in the project, the marketing of the finished product plays an integral role in determining the profitability of the project.
The 60 percent marketing cost is not reduced proportionately as the price of the goods increases. Should one take the second lowest price in the table, it will be noted that the local auction price is only 33 percent of the Excellent Flair price offered at the Dutch auction, and 20 percent of the Pinky Flair and Magical Red Prizes.
Product Life Cycle
The most interesting aspect of breeding for the consumer is the new colors that are released. Demand for the product continues to grow and prices remain at levels that justify growers' production of the crop. Most of the countries in the northern hemisphere are first world countries with weU developed economies.
It is believed that the government does not fully understand the extent of the epidemic. The best-selling variety of Hypericum is Excellent Flair, although sales of Pinky Flair threaten to replace those of Excellent Flair, due to the attractive coloring of its berries. Hypericum prices should not be under pressure from the increased availability of substitutes, due to the differentiated nature of the product.
It is believed that selling Pinky Flair directly to select buyers would be beneficial to both grower and buyer as some of the marketing costs such as handling and auction commission would be eliminated. Limitation in the focus strategy is believed to be negligible in this study due to the increased demand for the product.
Chapter Four Summary
We would advise the company to increase their Magical Red plants to have enough base plants from which to source cutting material, as this variety has better disease resistance compared to the Flair series. Considering that the project would be located in the hail belt, the installation of a shade house to protect the growing crop is highly recommended. The potential losses from hail damage are outweighed by the capital savings that would have occurred if the decision not to install a shade house had been made.
It would be advisable to market most of the product in the US, where the best prices would be obtained. Initially the various flower markets located in San Francisco, Boston, Chicago and Philadelphia will be used to sell the product. The Multiflora flower auction in Johannesburg will be used to sell the poorer quality products made up of stems.
An alternative marketing strategy that could be pursued would be to target wholesale exporters in South Africa with Pinky Flair, who would then be able to sell the product directly to retail customers in Europe, thus bypassing the restrictions of the auction. This strategy would be beneficial as the costs and problems associated with the transportation of goods would be eliminated.
