Calyx & Corolla Case Study

I. Problem Definition

Calyx & Corolla (Calyx) needs to determine whether it should change its current strategy and positioning as a mail order operation to compete more directly against more traditional outlets, such as florists, and wire services, such as FTD. How could Calyx attract the largest group of potential buyers who patronized florists or other retailers and were not accustomed to buying by mail order. Calyx needs to determine what actions it should take to make a profit and grow its business.

II. Solution Possibilities

Calyx's objective is to position and market its flower business to fully utilize its competitive advantage to reach its profit and growth potential. To accomplish this objective, Calyx must determine whether it can effectively target potential buyers who patronize florists and other retailers versus mail order.

The retail plant and flower industry in the U.S. is a $9 billion per year industry. The industry has grown at a rate of 7.7% since 1985. The market landscape is broken into three areas. Twenty five thousand retail florists have 59% of the market ($5.31 billion) and supermarkets have about 18% of the market ($1.6 billion). Nurseries, mail order companies (seed companies) and other retailers accounted for the remaining 23%.

FTD is a member owned co-operative of 25,000 florists. Member florists take orders from local customers for delivery by member florists elsewhere. FTD positioned itself to target customers in a wide cross section of households with incomes greater than $35,000. FTD provided a service by allowing customer who desired to purchase flowers for someone in another location to conveniently use a local florist to make that purchase without a need to find a florist in a...

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...e sales currently make up 20% of Calyx's revenues and offer significant potential for growth at less marketing cost. Calyx offered flowers at a discount as part of these promotions, but Calyx had little to no other sales and marketing expenses because retailers paid the advertising expense. Calyx should also decrease the number of catalogs it sends to recipients of prior orders, people who made inquires and rented names. The cost of marketing to these groups is not productive. The marketing dollars used for these catalogs should be redirected to placing ads in national magazines and newspapers. These advertisements should focus on the high quality, high value, freshness and longevity of its flowers with a guaranteed delivery date. Calyx should also continue to seek out positive press about Owades and the company to generate new catalogue and corporate customers.