Teddy Bear and Calyx Flowers
©2008 by Alexander Chernev. Professor Alexander Chernev (Kellogg School of Management, Northwestern University) prepared this case solely as the basis for class discussion. This case is not intended to serve as an endorsement, source of primary data, or an illustration of effective or ineffective management. The data presented in this case have been modified and should not be used beyond the scope of a case discussion. To request permission to reproduce materials, e-mail permissions@marketingcases.com. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without a written permission of the author. Rev. 4/1/2012 Case 0845
ALEXANDER CHERNEV
Calyx Flowers: Managing Profitable Growth ohn Gilbert, President and CEO of the Vermont Teddy Bear Company, was reviewing a report prepared by his marketing team. The report indicated that the financial performance of one of its subsidiaries, Calyx Flowers, had not reached its full potential despite gross margins of nearly
50%. To address the issue, the report identified several alternative action plans designed to improve
Calyx Flowers’ financial performance.
The Vermont Teddy Bear Company
The Vermont Teddy Bear Company was founded in 1981 on the premise of providing their customers with “the best possible experience when they choose to send a gift to someone they care about.”1
In 2008, Vermont Teddy Bear’s operations included four business units: BearGram, PajamaGram, and TastyGram gift delivery services, and Calyx Flowers.
The BearGram service involves sending personalized teddy bears for special occasions such as birthdays, anniversaries, weddings, and the birth of a baby, as well as holidays such as Valentine's
Day, Christmas, and Mother's Day. Vermont Teddy Bear positioned its BearGram gift delivery service as a "creative alternative to flowers." Teddy
ALEXANDER CHERNEV
Calyx Flowers: Managing Profitable Growth ohn Gilbert, President and CEO of the Vermont Teddy Bear Company, was reviewing a report prepared by his marketing team. The report indicated that the financial performance of one of its subsidiaries, Calyx Flowers, had not reached its full potential despite gross margins of nearly
50%. To address the issue, the report identified several alternative action plans designed to improve
Calyx Flowers’ financial performance.
The Vermont Teddy Bear Company
The Vermont Teddy Bear Company was founded in 1981 on the premise of providing their customers with “the best possible experience when they choose to send a gift to someone they care about.”1
In 2008, Vermont Teddy Bear’s operations included four business units: BearGram, PajamaGram, and TastyGram gift delivery services, and Calyx Flowers.
The BearGram service involves sending personalized teddy bears for special occasions such as birthdays, anniversaries, weddings, and the birth of a baby, as well as holidays such as Valentine's
Day, Christmas, and Mother's Day. Vermont Teddy Bear positioned its BearGram gift delivery service as a "creative alternative to flowers." Teddy