Pat Overton of McDonald Garden Center faces issues with marketing and promotions. To prepare for the spring season, Overton must 1) grow the customer base by targeting new consumer segments and appealing to loyal customers, 2) allocate the media mix by examining social media, paid digital ads, and direct mail, and 3) determine the future of the rewards program by enhancing the customer database and adding more value. The case analyzes McDonald Garden Center's marketing challenges and provides alternatives to address increasing customers and market share against big box retailers.

1. McDonald Garden Center
In-Depth Case Analysis
Prepared by:
Matt Boster, Cory Dunkovich, Marty Diaz, Dylan Hartmann
In partial fulfillment of the requirements of
Marketing Management & Policies 479-01
Submitted
11/24/15 11:59pm

2. Case Synopsis
Pat Overton faced a serious issue with her marketing and promotional efforts associated
with McDonald Garden Center. McDonald Garden Center was founded in 1945 in
Hampton, Virginia and now has two additional stores located in Virginia Beach and
Chesapeake. McDonald Garden Center is focused on providing customers with the most
informative, enjoyable, and successful shopping and gardening experiences possible.
After walking through the greenhouses one winter day, Overton identified three
important decisions that needed to be made in order to be properly equipped for the
spring selling season.
Overton needed to:
 Grow the customer base
o What consumer segment(s) should be targeted?
o What benefits appeal to MGC’s most loyal customers?
o What is drawing potential MGC customers towards big-box retailers?
 Allocate the media mix
o Do MGC’s consumers use social media sites? If so, which ones??
o Should MGC invest in paid digital advertising?
o Examine potential attractiveness of a direct mail piece?
 Determine the future of the rewards program
o Examine database enhancement possibilities
o Should MGC redefine the term “active” user?
o How can MGC add value to the customer through their customer loyalty
program?

3. Problem Definition
The primary problem in this case deals with Marketing Development. Specifically,
How should McDonald Garden Center establish a more loyal base of customers to
increase the number of active users in its geographical locations given the lack of
competitive pricing, the inadequate brand awareness, and the diminishing market
share for specialty retailers?
Alternative Identification
1. Do Nothing
MGC already has a customer loyalty program in place that identifies an
active user as someone who accumulates 50 points (spends $50) in a
calendar year. This program has been successful in the past, but has
plateaued in recent years.
MGC’s database would remain cluttered and would eventually become
more of a liability than an asset for the company.
MGC’s marketing strategy would continue to use newspaper
advertisements as the main source of promotion (45%), in addition to
Broadcast media (30%) and Direct mail pieces (22%).
2. Clean and Expand Customer Database
1. MGC could redefine their definition of an “active user”
2. Identify lowest tier of customers using RFM
3. Send Catalog with specific source code
4. Track inactive customers
3. Keeping the Offer Fresh
1. Initiate tier system based on yearly expenditure within the loyalty
program.
2. Establish tier completion benefits
4. Reallocate Media Mix Budget
1. Determine target markets accessibility to social media
2. Determine importance/reach of media types
a. Newspaper
b. Broadcast
c. Direct Mail
d. Social Media

4. Relevant Information-Environmental Factors
Market Seasonality
In the gardening industry 56.6% of sales occur during April-June (typically spring time).
30% of total sales occur in May specifically. The problem with this is climatic spring
begins at different times of the year depending on the climate zone the company is in.
Garden Industry Sales by Quarter
Industry Analysis
McDonald Garden Center participates in the do-it-yourself indoor/outdoor lawn and
garden activity segment of the Gardening Products Industry. 84 million households in the
U.S. participated in this segment last year and spent over 32 billion on gardening
products. Our industry is directly correlated with local property sales. When property
sales increase so do McDonald Garden Center sales. A major reason for this is the high
percentage of military personnel located in the surrounding areas. Many of these families
are located in this region for only a relatively short amount of time.
Retail sales in this industry are expected to grow to $40.8 billion in the next five years.
This indicates the beginning of the growth cycle considering sales have been down the
past few years. Garden seeds and plants were the industry’s top sellers while maintenance
equipment such as shovels and other hand tools were the lowest sellers. Despite bringing
in the least amount of revenue the purchase of maintenance tools are expected to grow in
the coming years, while the sales of fertilizer and other chemicals are expected to plateau.
Sales
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
18.1%
18.9
5.5%
56.5%

5. Competition
Direct:
McDonald Garden Center identifies itself as a specialty garden retailer and competes with
other local independent garden retailers.
Indirect:
McDonald Garden Center indirectly competes with big-box stores such as Walmart,
Home Depot, and Lowe’s. These retailers account for roughly 52% of all residential
garden products sold in the U.S. Retail outlets such as those listed above, indirectly
impact MGC because of their various offering capabilities that range outside of the
gardening department.
*Home Depot specifically plans to open Landscape Supply stores across the
nation. This could potentially make it more difficult for specialty garden retailers such as
MGC to hold on to market share*
These big-box retailers are capable of possessing this percentage of market share because
of their competitive advantage in price, variety, and location. These stores position
themselves in the industry by attracting customers with low prices, high assortment
variety, and convenient locations. These specific characteristics give MGC’s competitors
legitimacy in the gardening products industry.
Indirect Competitors Market Share
Home Depot 24%
Wal-Mart 18%
Lowe’s 10.5%
Total: 52.5%
Relevant Information—Internal Factors
Target Demographic
MGC targets garden enthusiasts who are active, civic minded customers who are willing
to pay more for personalized service.
These customers are typically:
 Female
 35-65 years old
 College graduates
 Annual income of at least $50,000.
 Married
 Owns their own home.

6. The gardening industry does not target any specific gender. However, industry purchase
history illustrates that men purchase more lawn seed, fertilizer, and tools, while women
are more likely to purchase plants and other lawn decorations.
The National Gardening Association estimates that the average household spends $450
annually on gardening products.
Positioning
MGC identifies itself as a specialty garden retailer, and in doing so acknowledges that
they have higher prices than big-box retailers. MGC does not plan on changing its current
pricing strategy, but can change customers’ perceptions of its business through the
positioning efforts.
MGC positions itself as a full service retailer that provides its customers the highest
quality gardening products in the market. MGC customers are seeking close personal
relationships and valuable advice from the knowledgeable employees at MGC. MGC
believes this is an added benefit to shopping at its specialty garden stores as opposed to
big-box retailers that do not employ the same quality of gardening experts. MGC believes
the quality of its products and services add value which justifies the higher prices at its
stores.
Media Mix
This is MGC’s current media mix:
MGC’s current media mix does not take into account the influence of social media. This
will alter the media mix moving forward. Social Media could be used to directly relate to
the younger segments of MGC’s target market (35-45). While traditional media such as
newspaper and direct mail could be effective for MGC’s older segments (45+). Despite
the decline in newspaper subscriptions overall, the older generations still use newspapers
35%
20%
25%
20%
Adjusted MediaMix
Newpaper
Broadcast
Direct Mail
Other/ Social
Media
45%
30%
22%
3%
CurrentMediaMix
Newpaper
Broadcast
Direct Mail
Other/ Social
Media

7. to stay up on current events. Since MGC’s target market ranges from 35-65, newspaper
advertisements are still relevant for this target market.
Promotional Events
MGC runs several special events throughout the year to highlight seasonal items and
activities. These events help drive customers towards MGC stores and create an overall
brand awareness. MGC runs several types of events including: educational seminars,
outdoor demonstration shows, and promotional festivals.
In addition to these physical events, MGC sends out their annual newsletter to
approximately 20,000 customers. This newsletter highlights MGC events and upcoming
products.
New Media Success Metrics
 Finding better balance in the media mix to reflect MGC’s target market is
essential
 Emphasizing a multichannel approach will better reflect the younger segment of
our target demographic
o Focus on collective following
o Create visually inviting content once a day based around MGC’s variety
o Engage 20% of current following
o Generate in-store traffic

8. Uncertainties
 MGC is unaware of current promotional efforts by its direct competition
 MGC is unaware of current expansion strategies of big-box retailers gardening
departments.
 MGC is unable to accurately determine when climatic spring begins each year
 MGC states that it spends 3.5% of annual sales on its marketing budget, but the
case does not present the exact figure of annual sales.
 MGC spends approximately 3.5% of annual sales on its marketing budget, but its
promotional efforts are not presented in the case. (Ex: Newspaper visuals)
 Garden supply stores dropped in sales 2% over the past year, but there is no
conclusive evidence as to why this occurred
 MGC doesn’t express its conversion metrics for current media mix
Assumptions
 Given the lack of specific information presented in the case, MGC would have to
assume that other specialty garden retailers are positioning themselves in a similar
fashion to that of MGC.
 Given Home Depot’s plan to open landscape supply stores (the first nationwide
lawn and garden chain), MGC would assume that other big-box retailers, such as
Lowe’s and Walmart, will follow the same business model to gain more market
share.
 Given general weather patterns, MGC assumes spring takes place between April
& June.
 Given that Americans spent $32.1 Billion on gardening products last year, and
that garden supply stores accounted for 21% of these sales. It is assumed that
these supply stores accounted for $6.74 billion in sales.
*MGC is part of this segment*
 Given the allocated budget presented in the case, it is assumed that MGC releases
some sort of visuals through all media channels.
 Given the recent emergence of big-box stores in the garden sales industry. It is
safe to assume this has taken sales away from MGC and other specialty garden
retailers.
 Given the allocation to the current media mix it is assumed that the marketing
budget is optimized

9. Alternative Evaluation
1. Do Nothing
 Description: For MGC, Do nothing means that the current customer loyalty
program will be retained, the customer database would remain cluttered, and the
allocation of the media mix would remain untouched.
 Advantages
o The media mix will still appeal to their oldest target customers
o No changes to the loyalty program results in no companywide training
required to update employees
o Customer loyalty program still appeals to the initial target
 Disadvantages
o Current media mix does not appeal to entire target market
o A cluttered database makes it hard to identify best customers
o Customer loyalty program continues to lose interest among customers
 Financial Implications
o Media mix allocation loses MGC sales due to improper targeting.
o MGC loses sales because of inability to locate and market to its best
customers.
o In the short term the loyalty program may continue to run effectively, but
in the long term the program will begin to lose interest, and in turn
customers will begin to lose interest in MGC.
2. Clean and Expand Customer Database
 Description: MGC could syphon out irrelevant or duplicate customers in their
database to reduce clutter and improve database efficiency and effectiveness.
MGC could also redefine the definition of an “active” user. MGC could do this by
analyzing their database to determine the recency, frequency, and monetary value
of their current customers.
 Advantages
o Identifies best customers based off RFM data
o Increases Marketing efficiency

10.  Disadvantages
o Labor Cost & Time
o Risk of inadvertently losing valuable customer data
 Financial Implications
o Cleansing the database takes labor hours and employee wages that could
be more efficiently used.
o Erasing or clearing customer data can be risky and if the wrong data is
deleted MGC risks losing sales.
3. Keeping the Offer Fresh
 Description: MGC needs to maintain customer interest and satisfaction through its
customer loyalty rewards program. MGC could create a tier reward system within
the loyalty program and establish tier completion benefits.
 Advantages
o Increased incentives to participate in rewards program
o Develop a more loyal customer base
o Interest/Excitement  potentially higher sales
 Disadvantages
o Not all customers are interested in the same incentives
o Incentives can become increasingly more costly to MGC than previous
efforts
o MGC would have to transfer current rewards program participants over
into the new tier system
 Financial Implications
o Potential to increase revenue through additional sales via the rewards
program
o Inefficient use of time and energy if customers don’t respond to new
rewards program
o Incentives cannot become more costly to MGC than the revenue that the
different tiers bring in.

11. 4. Reallocate Media Mix Budget
 Description: MGC could adjust its current media mix to better suit its present
target market. This could be done by researching the accessibility to social media
in the current target market and the weighted importance that MGC consumers
place on other media channels.
 Advantages
o Optimizes communication with target market
o More efficient use of the marketing budget could create a higher ROI. The
budget would be spent in the most effective way to communicate to
MGC’s key target markets.
o Increase in overall brand awareness.
o Increase in ability to reach customers through various avenues
 Disadvantages
o Costly market research must be done to understand the channels each
segment uses and the importance they place on certain channels.
o Increase in social media outreaches takes marketing dollars away from
other channels
 Financial Implications
o Labor costs of marketing research
o Brand awareness  increased foot traffic  increased sales

12. Recommendations
The overarching problem of this case was how McDonald Garden Center should establish
a more loyal base of customers to increase the number of active users in its geographical
locations given the lack of competitive pricing, the inadequate brand awareness, and the
diminishing market share for specialty retailers.
Given the proceeding analysis, McDonald Garden Center should:
1. Clean and Expand Customer Database
Once MGC has analyzed their customer database it should identify customers who have
been inactive for over a calendar year. MGC could send out a catalog with a special
source code to these customers to track which ones still hold value for the company.
Those customers who don’t respond to this effort will be put on a suppression list and
MGC should not target them directly.
Once MGC has revised its customer database it should categorize its customers into the
following tiers. “Platinum” and “Gold” are customers that generate the most value for
MGC while “Silver” and “Bronze” are the average customers.
Platinum
Gold
Silver
Bronze

13. 2. Reallocate Media Mix
Once MGC has properly adjusted its customer database it should focus on how to
communicate with its target market. At this point MGC should conduct market research to
determine the target markets’ accessibility to social media and preferred way to
communicate with the company. This research should identify which media channels are
most effective for connecting with the MGC customer. After this research is conducted
MGC can efficiently allocate their media mix to conveniently reach its wide target market.
3. Keeping the Offer Fresh
After MGC cleans its customer database and identifies its best customers, it is now ready
to obtain new acquisitions through an updated loyalty program. This program will
emphasize the new tier system (see figure above) to reward the most valuable customers
for their business. The tiers will be assigned by dollar value of individual annual customer
expenditures.
The associated benefits of each tier are listed below:
Platinum
 Customer spends: $1000+ (Annual)
 Customer rewards:
o Personalized Seminar/ Expert Assistance (At customer residence)
o Free (guest) pass to all Seminar/Workshops for the upcoming spring (April-
June)
o Mystery Gift Box of gardening essentials (Ex: tools, seeds, books/articles,
small potted plants, etc.)
o Free set of work gloves and a Geranium plant ($10 dollar value)
Gold
 Customer spends: $500-$999 (Annual)
 Customer rewards:
o Free pass to all Seminar/Workshops for the upcoming spring (April-June)
o Mystery Gift Box of gardening essentials
o Free set of work gloves and a Geranium plant
Silver
 Customer spends: $250-$499 (Annual)
 Customer rewards:
o Mystery Gift Box of gardening essentials
o Free set of work gloves and a Geranium plant
Bronze

14.  Customer spends: >$50-$249 (Annual)
 Customer rewards:
o Free set of work gloves and a Geranium plant
Implementation Issues
Timing
 MGC must clean its current customer database before it progresses to expand
through the use of its new rewards program.
Relevance
 MGC must continuously monitor media trends amongst its target market to
properly determine the appropriate channels to use and reallocate the marketing
budget to efficiently communicate with these customers.
 MGC must update its loyalty rewards each year to ensure maximum appeal to its
customer base.
Growth
 MGC will need to update its definition of an active user as sales grow and the
average customer begins to spend more in order to maximize profits.
 MGC will also need to increase the dollar values associated with each tier level as
the amount that the average customer spends increases.