callyx & corolla

8/3/2019 Callyx & Corolla

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Calyx & CorollaES1- G8Nilanjan BASUStphane QUENETGuillermo PENSO BLANCOAnumeha SINHA

Nozomi TAKAYANAGI


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Outline

Background

Case

Analysis

Strategy

Marketing Plan

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Background: Calyx & Corolla

Flower market: $8.4 billion and a growing rate of7.7% since 1985

Innovative value chain

Human capital as one of its main resources

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Case

Initial success and $1 million capital increase

Hiring of ES1-G8 marketing group to assessstrategy

Further growth and market share

Asses its competitiveness

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ES1-G8 Analysis

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Core competencies

Strong relationship with other members of thevalue chain

Supply Distribution

Logistics

Customer Service

Marketing

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Porters five forces analysis

Different forces haveunequal bargaining

power

Affects the industrysattractiveness andcompetitiveness

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Bargaining Power of Suppliers

Provide materials and services to the industry

Attempt to gain a larger share of the profit byraising their cost

Growers

Federal Express (FedEx)

Threat of Integration by growers

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Bargaining Power of Customers

Buyers --individuals or organizations-- are thosewho create demand in an industry

Very limited or no bargaining power

Small size

Lack of organization

Can change

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Threat of New Entrants

Raise competition

Dependent on entry barrier

High entry barriers

New entrants new to find new ways to be moreefficient

High initial investment

Relationships and strategic alliances take time

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Threat of Substitute Products

Lower industry attractiveness and profitabilitysince they limit price levels

Depend on:

Buyers propensity to substitute

Potential switching costs

The relative price and performance of substitutes

Differentiation as key to maintain customersloyalty

Quality

Delivery

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Competitive Rivalry within anIndustry Generally rivalry will be high in an industry if:

There is l ittle differentiation between the products sold tocustomers

Competitors are approximately the same size of each other Competitors all have similar strategies

Exit barriers are high, hence prompting competitors to stay

C&C has a distinctive concept

Low competition on niche segment

High competition on flower market Florists TransworldDelivery (FTD)

59% market share

25.000 associate florists

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SWOTStrengths Good niche Placement Innovative value chain

Expertise in both mail-order andflowers High quality sales and customer

service staff Strong strategic alliances

Weaknesses Dependence on FedEx Dependence on Information

Technology to fulfill orders Lack of customization abilities vis--vis

the local florists Dependence on the growers to meet

customer expectations

Opportunities Exploiting the B2B market Improving IT systems to increase

efficiency Expanding continuity programs New potential customers in a

healthily growing market (7.7% since1965)

Threats Fragility of flowers Seasonality of demand Impact of weather on supply of

flowers Size of FTD (25,000 affiliate florists) and

associated marketing budget Supermarkets gaining market share

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Strategy

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Growth

Should plan on growing aggressively

Need to get more market share from FTD as wellas Supermarkets

Need to invest more on marketing; financingfrom investors

Need to confront FTD; Spend more on advertisingin the off-peak seasons

Less clutter easier to grab the customers attention

Customer likely to order with you even during peakseasons

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Marketing Plan

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Target market

Men and women over30 years of age

Substantial disposable income

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Positioning

Gift your loved ones freshness when and whereyou want

Emphasize freshness and assured day delivery Convenience an added factor

Dont treat it like a mail-order service but a giftservice

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Product

Expand your products from just flowers to more

Flowers

Bouquets Arrangements

Bonsai

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Distribution

Continue the current logistics arrangement

Increase the base of suppliers

Need to work out a deal with FedEx to includedeliveries on Sunday and holidays

Set up order systems/ kiosks at supermarkets

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Price

Maintain prices at current levels

Special package prices for birthdays,anniversaries and special occasions

Special benefits for re-orders

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Promotions

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Advertisement Success of the test campaign in Minneapolis

10% response rate: generate inquiries

2% orders: value derived from customers over thelifetime

Expand to other regions

TV spots

Radio

Print media

Outdoor hoardings

Mini brochures in newspapers

Mini brochures/ pamphlets at supermarkets

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Catalogue Catalogues should communicate warmth,

thoughtfulness and good wishes

Create special addendums for birthdays,anniversaries and holidays like Christmas, etc.

Include all gift options

With flowers include other accessories like

Cards (existing) Candles

Table decorations

Wines / Champagne

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Other associations

Tapping more in the B2B segment

Corporate clients for gifting

Adding clients in hospitality with continuousrequirements for flowers. E.g. hotels, hospitals, etc.

More promotional tie-ups with supermarkets andother businesses on the lines of the tie-ups withBloomingdale and SmithKline Beecham

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Questions??

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callyx & corolla

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