' j 1: * 9m: MARKET POTENTIAL FOR GRADED ‘ POMPON CHRYSANTHEMUMS Theszs for the Degree at Ph D M W“ WE ”N‘VERS‘W MARGARET JANE GOLF-MAN 1967 0-169. This is to certifg that the thesis entitled The Market Potential for Graded Pompon Chrysanthemums presented by Margaret Jane Coleman has been accepted towards fulfillment / [01 the requirements fol-i /‘ (I '/y degree in ‘Mf/Ctbgfl{kli_/ /(»f/ (u/ \ /1},%fl5’7777 Major professor Mxmmu V! lea 2:: F “" Adlai} gap. 31%;: , . L» 3:, , Ecrmy WW “mag“ , ABSTRACT THE MARKET POTENTIAL FOR GRADED POMPON CHRYSANTHEMUMS By Margaret Jane Coleman Pompon Chrysanthemums were grown and sorted to three standard grades designated by minimum stem length and open flower count. A mixed bunch was used as the basis from which to make price differentials for each grade. The three grades and mixed bunch were sold, primarily to a sample of six retail florists, through a wholesale florist for a ten week period. After two weeks introduction in the market at market prices, the prices of the different grades were varied by week, and the sales data recorded. Market demand rela- tionships were calculated by multiple regression analysis between percentage sales of each grade and both price differentials and price ratios among the groups. Few observations could be obtained and statistical evidence can be viewed as tentative. Regression coefficients were not significantly different from zero, and indicated buyer indifference to the relative price changes of most of the grades in the range used for this test. However there was a trend for price thresholds for the largest grade to be at 50 and 75 cents over the standard price, with the mixed bunch being substituted for that grade. Margaret Jane Coleman Each of the six cooperating retail florists was interviewed regarding grading for pompon Chrysanthe— mums. Their responses indicated that three grades may have been unnecessary becasue little differential use was found for each. However, the majority was in favor of grading. The evidence obtained in this study indicates that graded pompon Chrysanthemums would be generally acceptable in the market. THE MARKET POTENTIAL FOR GRADED POMPON CHRYSANTHEMUMS By Margaret Jane Coleman A THESIS Submitted to Michigan State University in partial fulfillment of the requirements for the degree of DOCTOR OF PHILOSOPHY Department of Horticulture I967 C%?+%S 3,7,;? ACKNOWLEDGMENTS The author acknowledges with sincere thanks the guidance and encouragement given throughout the study by Dr. R. S. Lindstrom; the advice of Dr. H. E. Larzelere and Dr. D. J. Ricks in planning the market tests and subsequent analyses; and the help with statistics given by Dr. C. E. Cress. Appreciation is expressed to Yoder Brothers who supplied all the rooted cuttings for growing the pompon Chrysanthemums; to Mr. I. Schneider, president of the Florists' Exchange in Flint, without whose interest and assistance the market tests could not have been conducted; and to the six retail florists who evaluated the grades. Financial support for the project was obtained from the federal government (Hatch funds, through the North Central Regions projects), and from Michigan State University. ii TABLE OF CONTENTS Page ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . . . ii LIST OF TABLES . . . . . . . . . . . . . . . . . . . . iv LIST OF FIGURES . . . . . . . . . . . . . . . . . . . vi LIST OF APPENDICES . . . . . . . . . . . . . . . . . . vii Chapter I. INTRODUCTION . . . . . . . . . . . . . . . . . I II. REVIEW OF LITERATURE 5 General Background . . . . . . . 5 Pompon Chrysanthemums . . . . . . 9 III. MATERIALS AND METHODS . . . . . . . . . . . . 15 Production and Grading . . . . . . . . . . . 15 Marketing . . . . . . . . . . . . . 22 Retailer Opinion . . . . . . . . . . . . . . 24 IV. RESULTS AND DISCUSSION . . . . . . . . . . . . 25 Production and Grading . . . . . . . . . . . 25 Marketing . . . . . . . . . . . . . . . 29 Retailer Opinion . . . . . . . . . . . . . . 47 V. SUMMARY AND CONCLUSIONS . . . . . . . . . . . 57 LITERATURE CITED . . . . . . . . . . . . . . . . . . . 76 Table LIST OF TABLES Page Average Weights of MSU- Grown Pompon Chrysan- themum Bunches, as Graded Summer 1966 . . . 27 Average Weights of Market Pompon Chrysan- themums from Two Different Sources, and of the Same Pompons Regraded to Floralux Specifications, October 1966 . . . . . . . . . 27 Prices Charged for Floralux Pompon Chrysanthe- mums in Flint Florists' Exchange During Ten Weeks, August 22 Through October 29, 1966; Average Market Prices and Differentials Between Graded and Ungraded Floralux Bunches . . . . . . . . . . . . . . . . . . . 31 Percentage of Total Pompon Chrysanthemum Sales Through Flint Wholesaler Taken by Six Retail Florists: Sales and Percentage of Floralux Pompons to This Sample of Florists During Eight Weeks of Price Variation, Summer 1966 . 33 Percentage of Total Pompon Chrysanthemum Sales Through Flint Wholesaler Occupied by Total Sales of Floralux Pompons During Eight Weeks of Price Variation, Summer 1966 . . . . 34 Sales of Floralux Graded and Ungraded Pompon Chrysanthemums to Six Retail Florists During Six Weeks of Price Variation, Summer 1966; Percentage of Each Group to Total Number of Floralux Pompon Chrysanthemums Sold . . . . . 36 Total Sales of Floralux Graded and Ungraded Pompon Chrysanthemums Through Flint Florists' Exchange During Six Weeks of Price Variation, Summer 1966; Percentage of Each Group to Total Number of Floralux Pompon Chrysanthe— mums sold . . . . . . . . . . . . . . . . . . 36 Percentages of Floralux Graded Pompon Chrysan— themums of Total (Graded and Ungraded) Floralux Pompons Sold During Six Weeks of Price Variation, Summer 1966 . . . . . . . . A2 Table Page 9. Income Gained or Lost (+ or —) by Grading Pompon Chrysanthemums into Three Groups Compared with Potential Income with All Mixed Bunches (Black) . . . . . . . . . . . . U9 10. Summary of Responses to Standard Questions Put to Six Retail Florists Regarding Pompon Chrysanthemum Grading and the Floralux Grades Marketed in Summer of 1966 . . . . . . 52 Figure 1. LIST OF FIGURES Pompon Chrysanthemum Prices in Detroit and Flint Wholesale Markets: including Flint market equivalent and Flora- lux grade prices: weeks ending August 27 to October 29, 1966 . . . Income Received from Sales of Floralux Grades Compared with That from the Same Number of Bunches Sold at Prevailing Black (Ungraded) Prices, weeks ending August 27 to October 22,1966. . . . . . . vi Page A6 A8 LIST OF APPENDICES Appendix Page I. Plates . . . . . . . . . . . . . . . . . . . . 61 II. Grades for Pompon Chrysanthemums . . . . . . . 65 III. Quality Specifications for Graded Pompon Chrysanthemums . . . . . . . . . . . . . . . 68 IV. Summary of Floralux Grades Purchased by Six Retail Florists: Test Weeks 1 Through 6 . . 72 V. Recommendations for Future Flower Grading Economics Studies, Based on Experiences Gained in the Study Reported in This Thesis . . . . . . . . . . . . . . . . . . . 7U CHAPTER I INTRODUCTION Grades and standards fin~cut flowers and potted plants have been under discussion for a number of years. Several systems have been developed, but only grades for Asparagus plumosus and Paeonia species have been adopted officially by the U. S. D. A. (19).1 Some far—sighted commercial flower growers have tested and adopted grading systems for other crops with success. However, many floriculturists are apprehensive about adopting any system of grading because they see little benefit in terms of enhanced profits for a possible outlay of extra equipment and labor. It may take some time for the grading and packing staff to become fully acquainted with a new grading system. Taking also into account the time it could take the wholesalers and buyers to accept the new grades, the grower may become discouraged if he is not assured of positive benefits from grading. There are several motives for grading, all of which can be equated with enhanced profits. A number of reasons 1Numbers in parentheses refer to ”Literature Cited,” pages 76 to 78. for the development of standard grades for floricultural products have been discussed (6). These include the need for a common language between sellers and buyers (4,2A), and for accurate recording. The increase in business volume carried out by telephone, the development of new markets, and the use of contracts and standing orders are contributing to the increased urgency with which standard— ization is required. The value of any proposed grading system tested in the market place is probably never fully realized while the majority of the same crop being marketed remains ungraded. The purpose of grading is "to sort products into mutually exclusive groups of approximately the same char- acteristics of type or size or quality,2 or of two or all of these characteristics."3 The development of grades according to type and size, with a consistently high level of quality, is one concern of the flower industry and of this thesis. 2Quality is here defined as that characteristic of the product, aside from dimensions and price, which influences a potential buyer to purchase a particular sample of one product. 3F. E. Clark and L. D. H. Weld, 1932. Marketing Agricultural Products in the United States (The MacMillan Company, New York), p. 25A. In 1965, Goodrich (12) reported on problems of obtaining continuous grower support, as have other researchers cited in the next chapter. For this reason a flower grading economics study was initiated at Michigan State University (MSU) using primarily pompon Chrysan- themums grown, graded, and marketed from the MSU green- houses. In this preliminary phase of the study the answers to four main questions were sought. These questions are: l. Is-grading acceptable to the flower industry? 2. Will grading pay (in terms of efficiency as well as higher returns)? 3. What grades are desired by the market (retailers)? A. What price differentials will the market pay for different grades? A series of three different grades was introduced. These grades or those in some similar grading system would not only enable the publication of more accurate market information, but retailers would be able to purchase large or small stems according to their needs. These benefits resulted when carnation grades were tested by North Central Region committeeu researchers. “Page 12. Answers to the above questions were sought in the following ways: 1. Pompon Chrysanthemum crops produced at MSU were graded and marketed for a ten—week period. 2. Market demand relationships were calculated by multiple regression analysis, to show the market response to different grades at various prices. Personal interviews were conducted with purchasers and users of the graded pompon Chrysanthemums, to add information regarding the acceptability and usability of the grades used in this study. From the experience gained in this first market test, recommendations for future testing procedures have been made; these are contained in Appendix V. CHAPTER II REVIEW OF LITERATURE General Background In a recent survey of mass market outlets (25) a great potential for the sale of cut flowers through super— markets and variety stores was indicated. Major problem areas included the perishability of flowers, obtaining adequate flower supplies, and price fluctuations. Improved packaging and display methods could reduce wastage, while supply and price problems might be partially solved through contracting. One way to facilitate contracting and to reduce the risk to both parties is to sell goods chonsistent quality and clearly defined dimensions. Standardized grading will be even more useful than individual systems since price quotations and contracts could be based on standard products throughout the industry. Buyers will need to be less concerned with individual variation with national rather than local standards. Grades are complementary to advertising and promo- tional efforts (7) which are in turn "of major importance if the growth potential for the industry is to be realized."lk 1U. S. Department of Agriculture, Economic Research Service, 1966. The Demand for Flowers-by—Wire by Sidney E. Brown, Marketing Research Report No. 762 (Washington, D. C.) p. 1. 5 The words "grade" and "quality"2 have not yet been isolated from one another in the minds of many people. To establish a certain standard for quality, various basic specifications are determined. These include flowers of one variety packed together (unless otherwise stated), freedom from disease or damage, characteristic shape, and a stated maturity level. A grading system with such basic requirements will enable the flower grower to grade into groups defined by size, all groups having the same speci- fied quality. As exceptions arise, the grades may be modified with descriptive qualifications. Two major questions raised by the industry when a grading system is suggested are: 1. Does the market want standard grades? 2. Will it pay the grower to grade his produce to different standards than used at present (his own system)? These issues are mutually dependent, and a number of studies have been conducted to point out the benefits of standard grading to the industry. An experienced grader should require little or no extra time to grade to some standard system rather than to sort to the grower's personal specifications. It has been found that in grading carnations and standard 2Page 2, footnote 2. Chrysanthemums to North Central Region (NCR) specifications, an initial increase in time of up to 60 per cent was exper- ienced for the process (12). After 12 months of continuous grading this increase had been reduced to negligible proportions, and certain efficiencies appear to have been introduced: The added care and precision required to carry out a grading program over that required to simply sort and pack flowers with little regard to quality calls for an additional investment in time. Yet, it appears that the systematic handling pro— cedures resulting from the maintenance of a strict grading operation introduced some efficiencies. Whatever added inputs were needed in order to comply with close attention to quality factors were offset by a more effective use of the labor in other phases of flower preparation. Handling techniques that had previously been somewhat haphazard were streamlined for more efficient output by grower incen- tive during the later stages of this research project. Thus it was implied that the growers involved may not have been achieving all possible efficiencies in their handling and packing procedures; yet the actual operations within "handling and packing" for which labor time was decreased were not specified. A verbal report from one wholesaler, on a two-grade packing system for pompon Chrysanthemums that was introduced by a commercial grower for use at peak crop times, indicated that efficiencies 3Page 12. LA) were found in the same processes that had become extra time—consuming flithe initial stages. In other words, the time lost through the necessity of retraining all members of the packing team was regained as they learned. Extra equipment for grading may not be necessary, except for that which will, in the long run, speed output and/or reduce the number of required workers. Additional costs for specially printed wrappers may be overcome by using the same printed labels with different colored tags glued or stapled in place to designate the grade of the contents. This method was used with evident success in record-keeping in the study reported by Goodrich (12). Standard grading will lead to reduced buying and selling costs because of less required inspection time. If buyers are willing to pay a higher average price for graded rather than ungraded material, the grower will receive higher returns for the graded flowers. Higher prices are possible because bunch content is stated explicitly and there should be little potential wastage from the bunch. It has been said (13) that standard grades will be of no benefit to small producers selling their crops locally; and that their greatest advantage is to be found in better service to their customers than can be given by larger growers. However, standard grades can be combined with personal service and individual differentiation, as Berninger has pointed out (3). While buyers fear dishonesty among growers in labeling their produce to any given standards, the growers themselves are opposed to legislation which will enforce the standards. However, it has already been shown that carnation grades result in increased returns to growers and enable more accurate purchasing to take place (1). The carnation grades in use today are not enforced, nor are they nationally standardized,but the industry has recognized the need for more uniform grades and is working towards that goal. When grading becomes nationally recognized the position regarding enforcement will undoubtedly have to be re—examined in order to avoid abuses. Pompon Chrysanthemums In 1966 the wholesale value of pompon Chrysan- themums in 23 selected major flower-producing states was 22 million dollars for 28.3 million bunches sold (27). Florida is the leading pompon-producing state, having sold Al per cent of the 23—state volume. California sold 21 per cent, and Pennsylvania with third with 7 per cent of the total volume. 10 The majority (91 per cent) of these pompons was sold at wholesale, frequently in other states. The Michigan— grown pompon sales were approximately 0.89 per cent of the 23—state total volume in 1966, and imported pompons were always available in wholesale markets. The 1965 population of Michigan was about 4.2 per cent of the United States' total, and is expected to increase at the same rate as the total U. S. population to 1980.Ll Since a much lower percentage of pompons, than that of the population, was produced in the state, Michigan is an excess demand area. Based on observations in Detroit, Flint, and Lansing wholesale markets, pompons and other main flower crops are imported continuously. They come primarily from the three major flower—producing states and from Ontario. Early grades for pompons, under the Cornell Standard Weight (CSW) system, were by weight per spray and stem count per bunch (21, 22). During their development it was reported that retailers liked uniformity of stem size and number in each bunch (20). The CSW grades were endorsed by the Society of American Florists (SAF) in 195“, and are as follows: “Project '80, 1966. ”Rural Michigan--now and in 1980; highlights and summary" (Agricultural Experiment Station and Cooperative Extension Service, Michigan State Univer- sity, East Lansing), p. 11 CSW/SAF Grades for Pompon Chrysanthemums Grade No. sprays Weight per Weight per Stem length: per bunch spray: oz. bunch: oz. inches Special 3 2% and up 9 and up 24 — 36 Fancy 6 1% — 2% 9 - 12 20 — 30 Extra 6 l - 1% 6 - 9 20 — 30 First 12 % — l 6 — 9 20 In 1957 a study was conducted to investigate the acceptance and economic feasibility of the CSW/SAF grades for pompons and other cut flowers (I). A commercial grower graded his pompons according to the above system. He discontinued using these specifications after a six— month period because he thought the larger bunches of ungraded pompons on the market were gaining prices superior to his. However, when graded versus ungraded material was compared on a cents—per-ounce basis, there was a slight market gain for the graded pompons. Proposed U. S. grades for pompon Chrysanthemums were developed soon after the North Central Region (NCR) projects began in 1956 (ll). Grades were based on the number of "fairly tight" top flowers per stem, stem number intflxzpack, and stem length. The numerical values were later altered by the NCR committee, and are as follows (18): 12 Summary of NCR Grades for Pompon Chrysanthemums Min. no. fairly tight Minimum stem Grade top flowers per stem length: inches Blue: Extra Fancy 9 30 Red: Fancy 7 25 Green: No. l 5 20 Yellow: Design 3 l5 These grade specifications, along with those for other flower crops, have been developed from investigations into factors determining quality in the crops. The NCR committee, which consists of representatives from a number of state universities in the region, is engaged in both the preliminary investigation and the development of meaningful grades, and their market testing (1“). After the grades have been established, i.e., found suited to both crop and market, the information is released to the SAF Grades and Standards Committee which promulgates it in the industry. In the NCR program, tests were conducted in Wichita, Kansas, on pompon Chrysanthemum grades defined by number of stems per bunch, flowers per stem, and flowers per bunch (16). These grades were: l3 Grade Number of Number of Number of stems/bunch flowers/stem flowers/bunch Blue A 8 — 10 32 — 40 Red 6 5 — 7 30 — 42 Green 12 3 — A 36 — A8 Carpenter (l6) worked with one grower and one whole- saler in this test, but he reported difficulty in getting the grower to grade continuously. The grower said that counting flowers was too slow, but that his profits were greater when he stayed with the 40—flower (graded) bunch rather than matching the variable sizes of ungraded bunches in the market place. Despite the various grading systems recommended for pompons, Seeley (24) stated in 1966 that grading specifi— cations are still in the research stage. A recent study (2) discovered many different methods used by growers in bunching pompons. These include weight and stem count, display area at the top of the bunch, minimum number of stems, and bud count. A close correlation was found between open flower number and stem weight for the Florida—grown pompons measured in the study. A survey of a number of retailers in Wisconsin was also conducted (2), and showed a fairly evenly distributed comment for and against the proposed NCR grades. However, many florists believed they were able to make their 1A purchases by inspection alone (without grading), and felt this enabled them to obtain the best for their money. As pointed out in the NCR meetings, for example (18), grading will assure both buyer and seller of the content of a bunch. It also reduces transaction time in the market place, so introducing efficiencies for both wholesaler and retailer. CHAPTER III MATERIALS AND METHODS Pompon Chrysanthemumsl were grown in the Plant Science Greenhouses at Michigan State University (MSU) in the summer of 1966. The crop was graded and sold through the Flint Florists' Exchange wholesale market in Flint, Michigan. Marketing began on August 22 and continued for a ten-week period. Production and Grading2 Two assumptions were made when the crops were planned for the market test of pompon Chrysanthemum grades. First, stems developed at the outer edges of the bench produce more flowers per stem than do stems inside the bench and surrounded by other stems. The second assump— tion was that pompons grown on single stemmed plants have more flowers per stem than those that were pinched. Both assumptions were based on past experience and obser— vations of the crop. Ten benches were planted at one-week intervals. Rooted cuttings were set at 6” by 6", and after two weeks lRooted cuttings were donated by Yoder Brothers, Inc., Barberton, Ohio. 2Appendix I photographs illustrate the system used for grading the pompon Chrysanthemums. 15 16 they were soft-pinched and subsequently pruned to three stems per plant. A small portion of the same proposed crop was planted at 6" by A" two weeks after the 6" by 6" planting, and not pinched. Short days were given to the whole crop five weeks after planting the pinched section, and three weeks after planting the smaller, single stem part of the crop. Before planting each bench a complete soil analysis was carried out using the Spurway method. Monthly soil checks were run for the major nutrient factors. Ferti— lizer was applied as necessary. A spray program was initiated, using Isotox at 8 to 14 day intervals. Cultivars Four different color cultivars were grown in the approximate proportions that were suggested by the whole- saler to satisfy market demand in late summer and early fall (see next page). Marketing records were taken for all pompons sold, disregarding color differences. The reasons for this were that salesmen were unable to make records of each individual color sold, and it was not considered of sufficient importance in the test with the small numbers that were involved. l7 Proportions of pompon chrysanthemum cultivars grown at MSU in summer of 1966, for market grading tests. Percentage to be sold during test: Cultivar Weeks l—5 Weeks 6-10 Iceberg (white) 50 40 Dark Yellow Iceberg (yellow) 30 30 Pennant (pink) 5 5 Dillon's Beauregard (bronze) 15 25 100 100 Grades and Grading Based on the same quality specifications that were used for the NCR grades [(18) and Appendix III], the grades used in the MSU program are summarized below. An earlier report (17) indicated that only 6 per cent of the marketed pompon chrysanthemums had 9 or more open flowers per stem, so the blue grade minimum was reduced to 7 open flowers. Thus the system differs from that set out by the NCR Committee (page 12). 18 Grades for pompon chrysanthemums used in 1966 market grading project at Michigan State University3 Number open flowers“ Stem length: Number of Grade per stem (minimum) min. inches stems/bunch Blue 7 3O 6 Red 5 25 6 Green 3 20 6 Black (ungraded) mixed 20 - 30 6 or more, to give bunch equivalent to standard mar- ket bunch at start of test. In addition to the three grades in this test, a mixed bunch was sold, with a black label. This gave a closer comparison with market bunches, since the latter are generally mixed, and was made equivalent to the standard market bunch at the start of the test. Quality and content of the black bunch was maintained constant through— out the period, while those of the commercially grown ungraded bunches varied (Chapter IV). Thus the black bunch provided a base from which to set the different price differentials as well as a check on comparative qualities of the graded versus market pompons. 3 ”Open flower is defined here as any flower that has opened to a minimum of a complete circle with all the back petals in one plane, at 90 degrees to the peduncle, and with the center not yet fully developed or Opened. A half-open flower was counted as half an open flower; buds were not counted. See also Appendix II. 19 A minimum of equipment was necessary to facilitate grading and wrapping the bunches. A grading board, similar to that used for grading roses or carnations, was used. This consisted of a wooden board raised at the upper end, which had a strip of wood across the lower end to form a stop for the cut ends of stems. Colored bands painted on the board indicated the designated grade lengths: green at 20 to 25 inches from the lower end of the board, red from 25 to 30 inches, and blue from 30 inches to the top of the board. Scale drawing of grading board as used in 1966 market grading project for pompon chrysanthemums at MSU* $2" m 35.5" Scale: 0.125" represents 1". *Photograph on page 63. The procedure for grading the cut pompons of each cultivar was as follows5: 1. Strip stems from about 10 inches above cut end, downwards. 5Appendix III. The wrapping cone was by means narrower stems of 20 Separate different open flower number groupings-- blue, red, green, culls (discarded). Sort into stem length groupings. Bunch into groups of six like stems, using two rubber bands—-one at the base (stems were cut to approximately the same length), and one, looser, closer to inflorescences. second piece of equipment could be used for any bunches——graded or ungraded. An aluminum supported at the top of a regular flower bucket of the cone's flat base. There was a hole at the (basal) end through which passed the stripped a bunch. The paper wrappers, shaped and glued into cones, were stacked on the outside of the metal cone. A bunch was placed into the cone, stems down, the wrapper drawn up replaced around the flowers, and the bunch removed and in water. 21 Scale diagram of wrapper cone as used in 1966 market grading project for pompon chrysanthemums at MSU*. Longitudinal section. -——— -Aluminum cone 12.5" //,rHeavier aluminum base ¢_9 "Aluminum collar 1.75" 9” I Scale: 0.25" represents 1" * Photograph on page 63. 22 Marketing 'Volume A many as 160 bunches21week were marketed during the test period. The inventory at the Florists' Exchange was Inaintained with approximately equal numbers of each of ‘the graded and ungraded MSU pompons so that buyers could Inake any choice. Since this volume was a small percentage of the total pompons sold, market supplies of pompon chrysanthemums from other sources did not have to be altered. Six retail florists in the Eastern Michigan area were invited to test and evaluate the MSU product. Those bunches that remained in the market after these six retailers had bought what they required were offered on the open market at the same prices as were asked of the participating florists. Labels MSU pompon chrysanthemums were labeled FLORALUX, Michigan. The grades were identified by different color printing and a solid color band around the top of the paper wrappers. The minimum number of open flowers per stem, stem length, and stem number per bunch, were stated on each grade wrapper. The black (ungraded) bunch was identified with the same name and a solid black band on the paper, but no grade specifications. 23 Prior to the test marketing period the six cooper- ating retailers were informed of the grade specifications to be used,and of the purposes of the test. Pricing For the first two weeksof‘the test the prices were suggested by the wholesaler; they were those estimated to sell approximately equal numbers ofeach grade. The six participating florists made standing orders for these two weeks in order to become acquainted with the grades being offered. After this time the price differentials between the three color grades (blue, red, green) and the black bunch were varied each week. It was recommended by the wholesaler that the prices be changed by not more than 25 cents at one time. During the test the prices were varied in such a way as to attempt to duplicate each differential, as well as to arrive at each price from both above and below. However, the market was said to be unwilling to accept the alter- ation of more than two grades prices at any one time, so a limited range only could be achieved in this test. Even though these two restrictions were applied during this study, the author feels that in future they need not necessarily be followed. 2A Retailer Opinion During the final two weeks of the test marketing period each of the six participating retailers was Visited. They were requested to indicate their preferences for the grades, and to suggest modifications to the grading system used. Characteristics of the six florists' businesses are discussed on pages 51 to 56. CHAPTER IV RESULTS AND DISCUSSION Production and Grading As the pompon Chrysanthemum crops were cut and graded, a count was made of the number.of stems in each grade designation. Although every bench produced different numbers of the grades, some general obser- vations can be made with respect to the two assumptions noted in the preceding chapter. The yields from the pompon crops produced and sorted to grade at MSU indi- cated that the majority of stems fitted the specifi- cations of the grading system used in this test. In the majority of cases the single stem portion of the crop lacked sufficient vegetative growth to attain the minimum stem length requirement of the blue grade, although the flower number was good. Some of these were used in the black (mixed) bunches, but many had to be classed as culls since equal numbers of all types were used in the market test. The single stem plants needed more than three weeks of long days, and would probably have been better planted at the same time as the pinched crop and thus given five long—day weeks instead of three. 25 26 However, many three-stem plants (more than expected) produced seven or more open flowers per stem, and they were generally long enough to be graded as blue. Owing to the higher light intensity factor, high flower numbers per stem were obtained at the edges of the bench, but these flowers tended to be distributed down one side of the stem. Also, the stems were often shorter than were stems taken from the center of the crop. Thus, an average of 27 bunches of blue, and 38 each of the red and green grade and black bunches were marketed each week (a total of 141 bunches per week, on average) for the ten weeks of the whole test. These were adequate_ to maintain equal numbers of every grade available to all potential buyers at the wholesale house. The remainder of stems from the pinched crops were classified in the red and green grade divisions. The most common discrepancy was lack of stem length, partic— ularly in the unpinched crops. To provide a comparison with pompon chrysanthemums that had been graded by weight, a sample of each Floralux bunch was weighed (Table l). The black (mixed) bunch averaged 7.7 ounces, and was between the red and green grades in weight as well as market price in the test. The blue grade had an average weight of 12.4 ounces. 27 TABLE 1.——Average weights of MSU-grown pompon chrysanthemum bunches, as graded summer 1966. BLUE grade: 12.4 ounces RED grade: 8.2 ounces GREEN grade: 6.4 ounces BLACK bunch: 7.7 ounces TABLE 2.--Average weights of market pompon chrysanthemums from two different sources, and of the same pompons regraded to Floralux specifications, October 1966. Source A: average of 40 bunches Source B: average of After regrading,* Floralux BLUE: average RED: average GREEN: average BLACK: average of 13 of 15 of 6 of 16 20 bunches 11.2 ounces 13.2 ounces graded and mixed bunches: bunches bunches bunches bunches = 14.0 ounces 10.9 ounces 6.3 ounces 10.2 ounces *The total number of regraded market bunches was recorded here: Floralux bunches from the original 60. This was due to many very small stems with fewer than 3 open flowers in the lighter market bunches (Source A). bunches from the 60 i.e., there were fewer 28 When pompons were purchased and regraded to Floralux specifications in the final weeks of the market test it was found that the MSU-grown pompons were below the average weights, of 11.2 and 13.2 ounces, of those market bunches bought (Table 2). However, the bunches that were regraded were originally priced at about ten cents more than the market equivalent to Floralux black at that time. They were different cultivars than those grown at MSU, and some were grown in California where more vigorous. plants were attained than those previously marketed. The same bunches, when regraded, resulted in heavier Floralux bunches which ranged from an average of 14.0 ounces for the blue grade to 6.3 ounces for the green. This comparison was not intended1x>imply that the NCR grades should incorporate weight. As stated in the footnote to Table 2, there was a lot of cull material in the so-called better quality1 market bunches when they were regraded to the test specifications. These stems were of little potential value to a retail florist who, as was found in this study, often preferred the larger sprays. The practice of adding small sprays to fill out the bunch and make it heavier may result in lost customers, and, if all growers continue it, diminishing returns as the market value of the bunches decreases. 1See page 30. 29 In 1960 the NCR committee (15) compared NCR grades for carnations with similar CSW grades, and found that, more flowers could be sorted into the high grades using the NCR system which specifies stem length and flower diameter. Although a similar study was not carried out for pompon chrysanthemums, the same situation may exist. Much of a spray's weight may be in the stem, but not all large sprays have heavy stems. The lighter stems from pinched crops are usually within the limits for stiffness and straightness (Appendix III). This was an apparent contradiction to the evidence in Table 2, that fewer Floralux bunches could be sorted from the purchased market bunches. However, the latter were not graded according to the CSW system, and con- tained many stems too light-for that system of grading. While the grades used in this test were designed with a specified number of stems in each bunch, it is customary to speak about minimum stem number in the bunch. However, the possibility of having a maximum stem number limit should also be considered since growers tend to pack ever-increasing bunch sizes. Marketing Table 3 shows the prices and price differentials between Floralux grades and the market equivalent (black) during the entire ten weeks of the study. Tables 4 30 through 7 exclude or separate the first two weeks from the last eight. During the first two weeks prices and orders to the participating florists were fixed so that they could become acquainted with all groups in the market-test. In the last eight weeks both factors varied. Prices of the blue Floralux grade (Table 3) varied from $1.25 to $1.75, or from 25 to 75 cents above the black bunch (market equivalent) price. Those for the red and green grades varied less than the blue prices. The red was never more than 35 cents above, and the green 50 cents below the market equivalent. Little variation was achieved because of the restrictions imposed (page 23) and the brief duration of the test. There was an increase in the apparent quality, as measured subjectively and by bunch weights, of the commercially marketed pompon chrysanthemums (i.e., those competing with the Floralux bunches) during the ten weeks in which Floralux pompons were being sold. While this apparent quality of the commercial material became better, that of Floralux graded and ungraded pompons remained approximately the same. During the final weeks of the study there was less demand for any pompon chrysanthemums while supplies were increasing in quantity and quality. 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