Calyx Flowers case analysis
Calyx Flowers is relatively new company (under new management) in the fresh flowers market. They have pioneered the concept of selling fresh flowers by mail. During the years they established a strong relationship with Federal Express, their primary distributor.
The main issue:
How to increase the financial performance of Calyx Flowers through marketing and thus enlarging customer base and adding more segments. Existing way of reaching customers through a catalogue is not efficient in finding new customers and has a low response rate.
The main competitors:
• 1-800-Flowers.com – a large flower distributor in US, which uses mainly mass media for its advertisement.
• FTD – the largest flower company in the world. Uses mainly toll-free # & online website.
• Supermarkets – offer lower prices but not the same variety. Not as fresh as flowers by mail.
Pros & Cons of the Alternatives:
1. Attract new customers by increasing catalog mailings to potential buyers by 3mm. Pros: Expand size of potential customer base; Increase brand awareness; Provides more information for profile-based segmentation. Cons: Added cost (rental fee for the mailing list) involved; new people who receive catalogs might have aversion to the company acquiring their names and personal information; Yields only 1% return.
2. Advertise more aggressively using traditional mass media (radio, TV).
Pros: Able to reach broader audience and create brand awareness; Previous success launching other brands; Allows for partial segmentation by choosing specific channels. Cons: Higher costs than option #1 or #3; Difficult to target specific market segment; Cannot gauge effectiveness of their target audience receiving message; Cannot assess target segment’s reaction.
3. Advertise more aggressively on the Internet.
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