Calyx Flower Case
Situation Overview
Our customers care about the following buying factors: longevity, presentation, speed of delivery, ease of ordering, freshness, and price. Our customers are 57% women between 30-55 years of age with high disposable income who want to send not only flowers, but love. Calyx offers our customers premium mail-order gifts. We differentiate ourselves from competitors (FTD, 1-800-Flowers.com) by delivering our product directly from growers to customers, ensuring we offer the freshest flowers with the most longevity.
Problem Identification: The Awareness Gap
While we have gross margins of 50%, and a premium product compared to our competitors, we do not reach full revenue potential. We have a desirable return on direct mail from current customers, but our returns from rented lists are low. Because our current customers are seasonal, and will most likely not increase annual number of purchases substantially, the growth potential of our current customer mail lists is low. We are stagnating, just pitching to our old customers, and not reaching our growth potential. To achieve full potential, we need to reduce the awareness gap; few consumers recognize the premium value of Calyx Flowers or even recognize the brand. Our new strategy should focus on educating potential consumers about the premium value of Calyx.
Potential Marketing Strategies
Option 1: Increase the number of catalogs. * Pros: Catalogs are a familiar mode of advertisement – we can confidently predict how much revenue we will receive from an increase in catalogs. Also, we can bundle Calyx Flowers catalogs with those of the BearGram Service that we are already mailing. * Cons: Increasing catalogues is not cost-effective. More importantly, this option does not address the underlying problem of not targeting new customers.
Option 2: Increase Internet advertising. * Pros: Internet advertising is low-cost and convenient for customers to click and purchase. More targeted market
Our customers care about the following buying factors: longevity, presentation, speed of delivery, ease of ordering, freshness, and price. Our customers are 57% women between 30-55 years of age with high disposable income who want to send not only flowers, but love. Calyx offers our customers premium mail-order gifts. We differentiate ourselves from competitors (FTD, 1-800-Flowers.com) by delivering our product directly from growers to customers, ensuring we offer the freshest flowers with the most longevity.
Problem Identification: The Awareness Gap
While we have gross margins of 50%, and a premium product compared to our competitors, we do not reach full revenue potential. We have a desirable return on direct mail from current customers, but our returns from rented lists are low. Because our current customers are seasonal, and will most likely not increase annual number of purchases substantially, the growth potential of our current customer mail lists is low. We are stagnating, just pitching to our old customers, and not reaching our growth potential. To achieve full potential, we need to reduce the awareness gap; few consumers recognize the premium value of Calyx Flowers or even recognize the brand. Our new strategy should focus on educating potential consumers about the premium value of Calyx.
Potential Marketing Strategies
Option 1: Increase the number of catalogs. * Pros: Catalogs are a familiar mode of advertisement – we can confidently predict how much revenue we will receive from an increase in catalogs. Also, we can bundle Calyx Flowers catalogs with those of the BearGram Service that we are already mailing. * Cons: Increasing catalogues is not cost-effective. More importantly, this option does not address the underlying problem of not targeting new customers.
Option 2: Increase Internet advertising. * Pros: Internet advertising is low-cost and convenient for customers to click and purchase. More targeted market