Universitat Pompeu Fabra Barcelona School of Management Master of Science in Management
CALYX & COROLLA
Study Case for Practical Session
October – 2012
Background history Calyx & Corolla is a company that sells fresh flowers by mail, which was founded in 1988 by Ruth Owades. She had 18 investors who had provided her $2 million in capital to launch the company. By 1990, they raised $10 million in sales. The major point of success behind the company was that they have changed the way of flower distribution by directly linking the customer with growers. They have established strong relationships with 30 different growers that have exclusivity agreement with Calyx & Corolla. When an order is received either by mail, fax or telephone, the order is forwarded to one of the growers. The flowers are cut after the order was made; therefore the customers get fresher products compared to typical florist shops. Calyx & Corolla also have a strong business relationship with the courier service FedEx. FedEx is a successful company, which is known for its speed, on-time delivery and reliability. They used FedEx for delivering perishable products, so that they reduced the time it took to deliver flowers to customers. They also have a good customer service. With the online tracking system, they are able to see the location of the products and give immediate feedback to customers about the whereabouts of an order. Most of the revenues were derived from catalog, corporate clients and promotional tie-ins. In the catalog, fresh and dried flowers, plants, bouquets, vases and other accessories are displayed and the continuity program was presented. They send catalogues to customers and rented mailing lists. But the response rates of rented mailing list were low and this made is difficult to reach to new customers. The Calyx & Corolla management team has talented members like Owades and Lee and now they are evaluating new growing options. One option is capturing more gift business from traditional florists and increase flower sales. And the other is a test advertising campaign in Minneapolis/ St Paul market. If this campaign was successful, they could double the annual FTD adverting budget in the first year. But the management team does not want the cost of acquiring new customers using this campaign to be more than current methods. With television advertising, 800 number, newspaper and magazine advertisements they could highlight their products and their freshness, quality and long lifetime. If this campaign would be successful, they could reach to more new clients and increase their sales and revenue.
1.- How would you segment this market? Describe the several segments that you may find (use your own experience and creativity)
The flower-sales market can be segmented, by behavioral criteria, so we decided to Classify people according to their willingness to buy, motivation and attitude.
Funeral Clients: Clients with a Timely delivery expectation, who need facility to order the product, usually flower-crowns or flower bouquets with expectation of a high cost and high quality of the product. Wedding Clients: Women with a need for highly customized products, like flower bouquets, flowers arranges and need a long planning process, with willingness of a high cost and high quality of the product Special Event Clients: People who needs Facility to order standard products, like flowers arranges for special occasions in high quantity, timeliness of delivery , high quality, and with a high cost expectation House Decoration clients: People who wants to buy flowers in low quantity, in the form of flowers bouquets or table arranges to decorate their home. They are not so urgent about the timeliness of delivery , expects quality, and with a average cost expectation Landscape Decoration Clients: Clients who wants to use flowers and plants as a decoration for buildings or landscapes with an architectural purpose. Are...
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