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Marketing Case study: The Gasa Case

Company background and the market situation

GASA ODENSE-BLOMSTER A.m.b.a. was established in 1929 as a sales organisation for Funen plant nurseries. It has enjoyed growth and development ever since, and today GASA ODENSE is one of Europe’s leading sales organisations for potted plants.

GASA ODENSE is a co-op of gardeners and most plants grown on Funen are sold via GASA ODENSE. This means that the owners are also the suppliers. It is a business area connected with a lot of traditions and genuine conservatism – not only in Denmark but in all markets and companies. Understanding the cultural background of production processes and within buying behaviour of the specific market, is therefore a key to success.

However, GASA ODENSE is facing still fiercer competition mainly because the product is very difficult to differentiate and also due to the degree of transparency in the market. These two factors combined means that customer loyalty and market entrance barriers are low. Consequently, the product is extremely price sensitive.

GASA ODENSE operates in stagnating home market therefore the focus is on export markets. Currently, 80-90% of the production is exported.

The market is characterised by a tendency of excess production and few and poor distribution channels. Distribution takes place mainly through wholesalers and chains of convenience stores; divided into 1500 export customers and 400 Danish customers. In addition, products are sold via detail(????) lists as cash-and-carry centres, reaching some 300 producers(???).

Generally, profits are small and new business activities is associated with risk taking. Especially because it is a agricultural product and as such, affected by strict directives and regulations. Furthermore, risks are pronounced because the products are fragile and have short durability. Economic stability and market accessibility are important for producers.

Competition

As mentioned, competition is very keen among suppliers due to the open and international structure of the market. Consequently, there are a lot of suppliers and a heavy competition on price. Main competition derives from Dutch producers and the home production on export markets.

Customers

Sales are predominantly carried out as business-to-business and customers can be divided into three groups: wholesalers, retail chains and end users.

The international market for flowers is roughly divided into a customer demand of 80% cut flowers and 20% potted plants. Few countries have as strong a tradition for potted plants as Denmark, where the percentages are remarkably different.

The buying incentive is influenced by price and appearance of the product. The customer is generally indifferent regarding brands and producers; however, Danish products tend to represent high quality to the buyer. Typically, the end user will not have flowers as a listed item on the shopping list but tend to buy plants spontaneously.

Wrapping identifies the producer, however branding is not very recognised by or crucial to neither wholesalers, retail shops nor end customer.

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