Calyx Case

Situation Overview:

Calyx Flowers, a subsidiary of the Vermont Teddy Bear Company has struggled reaching its full potential despite gross margins of 50%. To improve financial performance of Calyx Flowers, the Marketing team has identified three action plans. 1. Increase the number of catalogs 2. Increase Mass Media Advertising 3. Increase Internet Advertising
Action Overview:
To solve the above problem the company should implement the strategy of “Increase in Mass Media Advertising” for the following reasons. 1. The leading flower distributor, 1-800-FLOWERS.com and the largest Floral Company FTD (Florist Transworld Delivery) FTD have used and continue to use a similar strategy, which allows them to reach a larger pool of potential customers. This strategy has high yields. The current strategy of Calyx flowers involves, promoting its offering through catalogs which reaches limited audience. 2. Increasing Mass media Advertising, allows Calyx Flowers to tap into the market share of the other leading Floral Companies like FTD which primarily does Mass Media Advertising to advertise its products . Since Calyx flowers ships flowers to the customer directly from the grower, the customer can be rest assured that the flowers shipped from the Calyx warehouse appear to be the same as the flowers displayed on Calyx’s website, unlike FTD which cannot guarantee the flowers delivered to the recipient are the same as they appear on the floral magazine, since orders through FTD are forwarded to different florists depending on the recipient’s location. This tactic of “predictability” would be attractive to FTD customers who would want to switch to Calyx Flowers. 3. Flowers are purchased for special occasions. Customers purchasing flowers care about the freshness, longevity, quick shipping, price among other things. Calyx flowers, unlike the other leading Floral Companies, by eliminating the traditional distribution channels i.e wholesalers and retailers, ships its flowers directly from the grower while they’re still in bud and ships overnight or a two-day service. This ensures longevity of the flowers, and guarantees freshness. Mass media advertising with an emphasis on Calyx’s “From bud to bloom” message would be attractive to customers and would play significant role in improving it financial performance.
Recommendations:
The demand for flowers is seasonal. Floral Orders for Special Occasions are a great source of Revenue. Calyx Flowers, with its Great customer service , quality products and other attractive qualities would still not be a desired shopping destination for customers as it does not deliver products on Sundays or Mondays if the special occasions were on Sunday or a Monday . Calyx Flowers should take steps to deliver products on all days of the week.