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Calyx & Corolla Case Study. C&C revolutionized the model of fresh flower selling by eliminating 3 levels of distribution (distributor, wholesaler and retailer) so that flowers reach consumers on average 7 to 10 days sooner

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Introduction

Calyx & Corolla In 1988, Calyx & Corolla (C&C) entered the mail order fresh flower delivery industry. C&C revolutionized the model of fresh flower selling by eliminating 3 levels of distribution (distributor, wholesaler and retailer) so that flowers reach consumers on average 7 to 10 days sooner than the standard delivery method. This was accomplished through a premium catalog, a successful relationship with Fed-Ex and exclusive relationships with selected local flower growers. C&C?s catalog is the main form of advertising reaching the customers. They believe in the importance of showcasing a beautiful product in addition to providing information regarding the flowers and their display that consumers would find interesting and useful. Since 70% of revenue is derived directly from the catalog, it is an important element of their business model. As Fed-Ex is known all over the world for its on-time delivery and reliability, being able to transfer those qualities to overnight flower delivery for C&C was revolutionary. Establishing exclusive relationships directly with a network of select growers in Florida, California and Hawaii allows C&C to offset weather catastrophes that may affect their supply. The exclusivity contracts means that C&C is not competing for product supply with other mail order flower retailers. ...read more.

Middle

Dependency on growers ? if the product that the grower supplies is not grown and packaged in accordance with the established specifications, then C&C is not supplying the quality of product as pictured in the catalog and the customer does not receive what was ordered. Opportunities C&C has identified the targeted demographic as women aged 30 -55, most of whom work and have substantial disposable income. Marketing strategies targeting this specific demographic should be developed. These other business opportunities would be valuable in helping round out the seasonal peaks of the flower industry. Expanding corporate clientele - Potential for expanding with high-end client such as an exclusive hotel chain to do lobby and banquet / corporate events. This is an excellent twofold opportunity ? partnering with hotel chain get the hotel business and expose to a target market that would not necessarily get the catalog at home. The business traveler who misses an event at home such as a birthday or anniversary but has access to flower catalogues in the hotel. Target high-end hotels with high-end customers. Premium business alliances ? C&C should continue to develop promotional events at select premium retailers (similar to Bloomingdales) ...read more.

Conclusion

The relationship with their 30 growers is exclusive and therefore protected. Economic downturn ? flowers are a luxury not a necessity. When the economy is bad, and disposable income is reduced, fewer luxury items are purchased. In conclusion, C&C has the potential for significant growth based on the existing sales model. The number one target has to be expanding their exposure to the specific target market of women aged 30-55 to generate the first sale (Appendix 1). Repeat customers generate the highest rate of return. The targeted television advertising, corporate promotions, and business alliances with premium retailers will assist in showcasing their offerings to the most likely customers. Since 70% of business is generated from the C&C catalog, by focusing on whom the catalog is directed to and increasing C&C?s exposure to the target market to increase the repeat customer (where they generate a 5 ? 10% return) is where C&C?s advertising time and resources will be best and most profitably directed. APPENDIX 1 # Catalogues Return Orders Generated Cost of Catalogues Gross Sales (Avg $40/sale) Previous Customer 100,000 5-10% 60,000 $32,000 $2,400,000 Recipient 500,000 1-2% 150,000 $4,000,000 $6,000,000 Cold Call 12,055,000 1-2% MBQC 831 ? NCCB 503 Calyx & Corolla Individual Case ...read more.

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