Carlyx & Corolla
Calyx & Corolla
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The Product: Fresh Flowers
• May need arrangement, especially for weddings and funerals; • Many varieties and combination possibilities. • Highly perishable for both sellers and end users;
– Delivery and logistics are particularly challenging.
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FTD’s Channel
Customers Florist Customers Florist FTD Florist Florist Customers Florist Florist
This channel is useful for flowers sent as gifts remotely.
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C&C Strengths and Weaknesses
• Strengths:
– Long house life. – Freshness and full bloom. – Competitive price with a more direct channel. – More info with a catalog. – Accessories (vases). – More variety with 30 growers geographically dispersed. – Long-term relationship with customers.
• Weaknesses:
– No Sunday delivery. – Delivery system is vulnerable to bad weather, especially during the peak Christmas season. – No consultation services and flower arrangement for weddings and funerals.
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C&C Strengths and Customer Preferences
Gift C&C Strengths Freshness Full bloom Longevity Good information Greater variety Greater ability to personalize C&C Weaknesses Unarranged No consultation No Sunday delivery Bad weather problems I I VI ? I VI UI UI I UI VI VI I UI VI VI UI VI VI VI VI Wedding/Funeral Commercial Use Personal Use
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UI UI UI I 15
Value of a Catalog Customer
• • • • • Price range: $23-$70. Average price: $45. Gross margin: 80%. Gross contribution: $45x0.80=$36. Other variable costs:
– Freight out (shipping) and processing: $9+$5=$14.
• Net contribution: $36-$14=$22 per order.
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Value of a Catalog Customer (Continued)
• Assume a response rate of 1% of firsttime customers.
– Net contribution/prospect = $22x0.01=$0.22.
• Cost/catalog = production & mailing ($0.32) + name list rental ($0.08) = $0.40. • Loss/catalog = 0.40 – 0.22 = $0.18.
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Value of a Catalog Customer (Continued)
• Assume a response rate of
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2
3
4
7
The Product: Fresh Flowers
• May need arrangement, especially for weddings and funerals; • Many varieties and combination possibilities. • Highly perishable for both sellers and end users;
– Delivery and logistics are particularly challenging.
8
10
FTD’s Channel
Customers Florist Customers Florist FTD Florist Florist Customers Florist Florist
This channel is useful for flowers sent as gifts remotely.
11
13
C&C Strengths and Weaknesses
• Strengths:
– Long house life. – Freshness and full bloom. – Competitive price with a more direct channel. – More info with a catalog. – Accessories (vases). – More variety with 30 growers geographically dispersed. – Long-term relationship with customers.
• Weaknesses:
– No Sunday delivery. – Delivery system is vulnerable to bad weather, especially during the peak Christmas season. – No consultation services and flower arrangement for weddings and funerals.
14
C&C Strengths and Customer Preferences
Gift C&C Strengths Freshness Full bloom Longevity Good information Greater variety Greater ability to personalize C&C Weaknesses Unarranged No consultation No Sunday delivery Bad weather problems I I VI ? I VI UI UI I UI VI VI I UI VI VI UI VI VI VI VI Wedding/Funeral Commercial Use Personal Use
I VI I VI
VI VI I VI
VI I UI VI
UI UI UI I 15
Value of a Catalog Customer
• • • • • Price range: $23-$70. Average price: $45. Gross margin: 80%. Gross contribution: $45x0.80=$36. Other variable costs:
– Freight out (shipping) and processing: $9+$5=$14.
• Net contribution: $36-$14=$22 per order.
16
Value of a Catalog Customer (Continued)
• Assume a response rate of 1% of firsttime customers.
– Net contribution/prospect = $22x0.01=$0.22.
• Cost/catalog = production & mailing ($0.32) + name list rental ($0.08) = $0.40. • Loss/catalog = 0.40 – 0.22 = $0.18.
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Value of a Catalog Customer (Continued)
• Assume a response rate of