Calyx and Corolla

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Calyx & Corolla’s long-term growth depends on increasing its core customers, who are: (1) high income-individuals (predominately women ages 30 – 55) who demand product quality and longevity and (2) corporations. Although this represents only a fraction of flower purchasers, deviating from Calyx & Corolla’s core consumers would force competition with existing companies like FTD. Converting customers of companies like FTD to Calyx & Corolla would require Calyx & Corolla to compete on price rather than quality. Calyx & Corolla is well positioned to pursue a strategy that increases its share of wallet of existing customers and attracts new customers who value quality over price. Our recommendation is three-pronged: (1) continue distributing product catalogues to existing customers, (2) increase advertising in magazines and publications targeted to Calyx & Corolla’s core customers (i.e., wealthy women: Southern Living, Home & Garden, Domino; corporate clients: Wall Street Journal) and (3) offer promotions to new and existing customers. To capture a greater share of existing customers’ wallet, Calyx & Corolla should continue to circulate all its catalogs to existing customers and cut back circulations to rented mailing lists, given their low response rates (~1%-2%). Additionally, for $0.09 (a $0.01 premium to the price of a rented mailing list), a mini-catalogue can be inserted into newspapers and magazines. This form of advertising has proved successful (articles in the Wall Street Journal and the International Herald Tribune have resulted in new corporate customers). Last, we suggest Calyx & Corolla offer coupons to new customers and customers who recommend the product. This promotion serves two objectives: (1) attracting potential customers who patronize florists but are not accustomed to mail order purchases, and (2) increasing word-of-mouth advertising. The above advertising strategy (total cost will be $0.32 for catalogs and $0.09 for...
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