Calyx & Corolla

Executive Summary

Calyx & Corolla is an entrepreneurial venture which deals in retailing garden produce, especially flowers, through an unconventional distribution channel. The flowers are delivered directly from the growers to the consumers through Fed-Ex service, thereby enabling customer access to fresher flowers at a competitive price. The company has shown excellent growth in sales, which exceeded 10 million, has led to an increase in investor confidence in the company by infusion of fresh capital. Now the company is contemplating a change in its strategy. They want to decide whether to aggressively market against traditional florists and mail-order services like FTD through the new advertising program or to continue its operations so as to attain a stable position in the market by fully developing their mail-order model.

Situational Analysis

The 5C framework has been employed to approach the case, where the 5C’s are Customer, Company, Competitor, Collaborator and Context. Following it is the analysis of the strengths and weaknesses of the company based on the inferences drawn.

Customer

The U.S. flower market is currently valued at $9 billion and has a healthy growth of 7.7 per cent. The customer base comprises mostly women of age 30-55 with a household income of at least $35000 which comprise 43.2% of the local population (Table A). Apart from that, thecorporate clients are a potential opportunity to boost incremental sales. The typical demands of a customer in horticultural business is freshness and longevity of the delivered flowers, sensitivity to delivery date, a large variety for separate occasions and reliable customer-support service. Also, a large no. of customers are loyal to the local traditional florists and do not utilize the mail-order service.

Company

C&C has been in the business of selling fresh flowers by mail for about two and a half years. Its sales revenue crossed $10 million with 150,000 transactions and fresh capital of $1 million was infused in 1990. Led by Ruth Owades, a Harvard Graduate having experience of running direct mail business, the company has benefited from her previous similar venture “Gardener’s Eden”.

The core competency of C&C was delivering fresh flowers as advertised within duration of 3-4 days. The earlier chain of Grower  Wholesaler  Retailer  Consumer was shrunk to Grower  Fed-Ex  Consumer, thus reducing delivery time, improving freshness of delivered flowers and reducing the overall cost of delivery.

The marketing tactics such as delivery of flowers in insulated boxes, hand written calligraphic messages added the personalization dimension ensuring satisfaction of customers. Most importantly, calculated delivery of catalog containing updated pictures of flowers stimulated the consumers