MARKETING STRUCTURES AND PRICE FORMATION MECHANISMS IN GERMAN NURSERIES

In 1990, there were 3927 nurseries in Western Germany which cultivated 5.1 ha on average and 21,000 ha in total. More than half (60 %) of the turnover of those nurseries which are organized in the ''Bund deutscher Baumschulen - BdB'' (''German Nurseries Association'') results from nursery products, 32 % from trading, and 8 % from services. Traditionally, we find a high concentration of nursery production in two regions which are located in Schleswig-Holstein and in Lower Saxony. Almost half of the turnover is held by nurseries located in these producing regions. Another agglomeration of nurseries can be found in North Rhine Westphalia. In the rest of the Federal States of Western Germany the nurseries are in scattered locations. With respect to their main activity, one may distinguish between firms which are exclusively or predominantly engaged in production, nurseries that specialise in trading, and other ones which concentrate on direct marketing to private consumers. In contrast to those nurseries dealing directly with private consumers, nurseries specialising in production or trading are mainly located in the producing regions mentioned above. On the market for nursery products, the trading partners traditionally use a price list drawn up by the ''Arbeitsgemeinschaft mittelstandischer Baumschulen - AmB''(''Working Group of Medium-sized Nurseries'') as an instrument for orientation. The prices taken from this list are handled with rebates which vary according to the customers' position in the market. The requirement for this system of fixed prices and rebates is to act in tone with respect to rebates. This is only given as far as sales between nurseries themselves are concerned. Looking at the other groups of customers, it is not. Especially in the sectors of landscape gardening and customers of public domains, the lowest rebates and greatest variation can be found. The AmB list and the system of fixed prices and flexible rebates is still an important orientation platform for the nurserymen to calculate their prices. However, in case the applicability of the price list and the uniform behaviour in granting rebates will continue to decrease, there will be no sufficiently realistic basis for price calculation for the nurserymen any more. Four models to reform the price orientation system have been discussed as possible solutions: a. concept of a 'cartel on trading conditions'', b. concept of an 'anonymous feedback'', c. concept of comparison of market and list prices'' and d. concept of . price lists for specified groups of products''. Finally, it is suggested to develop a price and quantity reporting system based on regular notations of actual gross prices and of rebates in the different market sectors. This will allow for the continuation of the list prices which are then based on reliable market information.