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.
Regarding strategic control, they were faced with determining how to move forward, and with what mix of product offerings? The leadership realized that with shrinking profits and increased competition the status quo would not guarantee long-term survival. Execution via their previously successful marketing channels would be problematic without either some sort of peace offering to dealers and installers, or a total shift in the advertising and sales process. The dealers and installers interacting with the customer were more likely to understand the customers concerns. Unless the company rebuilds their relationship with these front-line sales force, the customer service will suffer and ultimately the brand equity will continue to erode. The idea that the dealer is treated as the most valuable link to the customer and feels completely supported by the supplier, is exactly what enabled Caterpillar to survive in the late 1990’s. (Fites, 1996). Regardless of how the company addresses their root problems, a marketing channel analysis will undoubtedly conclude that both order getting and order servicing expenses will initially increase. In the short-term, the relationships must be rebuilt. In the long-term, they must shift overall strategy to remain profitable. If they elect to maintain their high-end product mix, customer expectations will increase demanding more from
Besides marketing its customer service, the company markets different programs according to its three major types of customers. Some of them being,
...direct more attention to the services side of an industry. The growth rates for product services increases more rapidly than that of product productions, so there is great incentive to direct your primary resources to provide service after the sale.
Sally’s Beauty Supply is a company that have been in business for a while that has gone internationally, by not having a strategy and shortage of economic funding could lead to an unsuccessful industry. The three financial strategic goals I have established to the growth and accomplishment of Sally’s Beauty Supply includes: Growth in revenues, profitability and cash flow.
Another channel that we need to keep our eyes on was supermarkets. Supermarkets were becoming more popular and more powerful in the fresh flowers market. The average annual sales for supermarket floral departments were $104,950, having grown almost four times in the past ten years. However, supermarkets had two major...
Canyon Ranch has grown and expanded over the years, it expanded operations geographically as well as through different service lines, including medical services that were offered as health and healing services. As services grew, the size of the specialized workforce at Canyon Ranch also expanded to meet the unique and personalized needs of its customers (Applegate, 2008). This growth made the task and efficiency of providing specialized services that customers had come to expect much more difficult and required repeated opportunities to gather data from their customers. Canyon Ranch was also slow to grow their technology infrastructure, lacked the ability to leverage point of sale transactional systems at the many retail locations that they maintained across their resort and spa locations. This meant relying on inefficient means for gathering necessary customer information, while increasing the cost of providing personalized services. While Canyon Ranch remained profitable during this phase of growth in their company, the opportu...
Regional Gardens Ltd is a company that runs a number of related gardening enterprises. It has a large display garden that it opens for public inspection a number of times a year. The company also owns the Regional Gardens Nursery which sells plants and garden supplies to the public. The company also owns Regional Garden Planners, which is a small company that provides garden advice, design and consultancy services.
Opportunities- expand distribution channels, customize products from traditional patterns to culture patterns to meet local demand, improve product demand, product line for career driven women, focus more resources on online sales which is continuing to grow on average of 28% per year.
Caterpillar Inc. - Strengths and Weaknesses Caterpillar Inc., sought to better determine customer demand by leveraging the Internet. Using i2 Demand Chain Management, Caterpillar created an online dealer storefront that is accessible to both dealers and end customers, and the company has expanded its sales coverage, reduced the cost of sale, and increased productivity. Caterpillar’s Building Constructions Product Division needed to predict and rapidly respond to customer demand. The company wanted to empower its dealer network to provide the highest levels of service to the end customer. Company executives knew that the Internet was critical to their strategy. Caterpillar wanted to leverage the Internet to provide more visibility into customer buying habits. In doing so, it could save millions of dollars in inventory by building and configuring those products that customers demand, rather than stocking excess inventory. The company wanted to promote specific product lines and associated work tools using a combination of traditional (dealer) and nontraditional (Internet) channels th...
Cynthia also has an opportunity to expand the line of jewelry. Right now this is an area that is very strong and if it continues to grow it will help to make the company an even stronger competitor in the industry. Recently Cynthia Rose added a selection of jewelry to her showroom. The first appointment she had in the showroom with the jewelry she had 3 sales.
...ximately 4 percent of Herbalife’s independent distributors joined the company to earn a fulltime income and the vast majority joined for the primary purpose of buying product at a discount. (Herbalife)
University of Phoenix, (2007), retrieved January 19, 2007 from the University of Phoenix rEsource database MarketLine Business Information Center
...s of assorted candles (jars & individually wrapped), sconces, incense, tea-lights, tarts and candle accessories. This will occur through both retail (brick and mortar) and online sales. Online sales can provide easy access to reorders and new customers who live in various parts of the world. The retail store will provide our local customers a way to see, smell and touch the candles before they buy, as well as bringing in containers from their homes that can be refilled.
Q2. How did the sales and marketing affect operations when they began to sell standard pieces to retail outlets?
As Peter Duckers has put it, "The ultimate aim of all business organisation is - to create a customer". These days, for most products and services, the market belongs to the buyer. The customers e...