ECON212-1501B-03: Principles of Microeconomics

Being in the floral business there are its ups and downs let’s take a real approach in getting a jump start on the competition. People are more enthused now a days to purchase their items earlier with set delivery days via email, phone or online purchases. To beat out the crowds our company will raise prices early for those who want to buy the flowers today instead of waiting until the last minute or the day of. Flowers aren’t a product that lives forever it’s more of a consumable, so they aren’t made to last. The latitude of deciding to purchase flowers or not is based highly on the timing of the year. With knowledge of the latitude of the year helps the company put together a set plan to supply the demand of products. Demand system models provides us as a company a clear picture of the consumer side of the market and attempt to provide the empirical insight into what drives changes in the purchasing behavior. Demand can be assumed completely exogenous to an industry and the industry just accepts the pattern of change. (Ward, 2003) Needing to understand the essentials of the products from the certain characteristics such as potted plants, Fresh cut flowers and the artificial flowers makes a company strong in different products offered to the customer.
Flowers are generally used for what you may ask? Everyone knows the biggest time of the year for flowers is Valentine’s Day. A holiday that is celebrated around the world in every country almost. But Valentine’s Day is only a kick starter to the spring season where flowers are at their highest peak of beauty and flourish in color schemes. Although, on any given day a flower can be given as a just because gift, (Valentine’s Day, Get well soon, i.e.) expressing certain emotions as well. Most consumers vary when it comes to either the occasion, the purpose and product availability. Knowing the demographics of your sales is a key fundamental to bring in the most income into the business. You wouldn’t set up a flower shop in the middle of a delict area, like a desert where the population of people is very small. Marketing and advertising is very important it’s the demand driver of the business. The measure of influence on your consumers are based solely on the prices, seasonality and events that may be going on at that time of the year or in the current situation of the consumers life(Weddings, Funerals & Love).
For example at the end of the Christmas season the huge demand for roses are filled. Valentine’s is the largest and the number one heaviest demand period when the long-stemmed roses and a variety of different rosebuds (Red, White & Yellow, i.e.) must be planted initially for every single long-stemmed rose that is eventually produced. However, this means that the grower is also sacrificing potential revenue on those buds in order to have product for Valentine’s Day. This is done through a process called “pinching”, which is in effect exactly what it sounds like. (Jones, 2011)
“Growers need 50-70 days for the plants to recover in order to produce enough red roses for Valentine’s Day.” (Jones, 2011)