edited calyx and corolla case ppt

Calyx & Corolla

Industry Analysis

• Growth Rate- 7.7% (1985)• Size- $9 bn (1998)

Problem Definition

• Business Growth for CC• Fragmented DISTRIBUTION system• Focused on Retention than Acquiring• Whether to proceed or not with the new

advtng campaign?

Creating Customer Value

• Efficient Distribution system• Relationship Marketing- Forward and Backward• Quality• Emotions• Service• Technology• Price• Information srvice

Product Market Matrix

Existing Market New Market

Existing Product Market Penetration Market Development

New Product Product Development Diversification

CC Comparison with FTDCompetitors Price Distribution

Margin to growers

Major Channel of Distribution

Revenue from the major channel of distribution

Present Strategy

Future Strategy

FTD $40 10% Yellow Pages(35% of Advtng Rev)

CC $23 20% Catalog 70% ????

Financials• Sales/Revenue Growth-• Opex-• Profit Growth-• Market Size• Cost of Customer Acquisition at present• Cost of Customer Acquisition under new campaign• Cost of Mini Catalog- $10.26 mn• No of Orders for CC- approxly 320600 in 1990• No of CUSTOMER for CC in 1990-

LOYAL CUSTOMERSPARTICULARS AMOUNT

Number of customers 100000

Total orders 60000

Response Rate 7.5%*100000= 7500

Number of orders per customer 60000/7500= 8

Catalog expenses per customer p.a 100000X12= 1.2 million

RECIPIENT AND RENTED LISTSPARTICULARS AMOUNT

Customers 500000

Catalogues sent 6*500000= 3 million

Remaining catalogs 12.055 million

TOTAL CATALOGS= 1.2+3+12.055= 16.255 MILLION

PER CATALOG COST

Using Exhibit 1

PARTICULARS AMOUNT

Selling & Advertising expenses (1990) $7021000

Share of catalogs 70%

Total 4914700

Cost per catalog 4914700/16.255= 30 cents

CUSTOMER ACQUISITIONPARTICLULARS AMOUNT

Potential Market 12.055 mn

Response Rate 1.5%

New customer acquisition 125325

Catalog Cost $4.5 mn

Cost per new customer $35.9

SWOT ANALYSIS

Cont…

Flower Market Segmentation

Product Attributes Personal Gift

Events(Wedding; Funerals

Corporate

fresh

unarranged

Floral variety

information

No sun/hol delivery

Come in fed Ex box

Matrix for Freshness and Willingness to assemble

Funerals Supermarkets

Florists C & C

Willingness to assemble

High

High

Low

Low

Demand for Freshness