Gross Margins ~ 50%
Competition: retail florists, 1800Flowers.com, FTE, supermarkets
Core Competency: fresh flowers directly from the grower to the recipient. Tend to last longer than other delivery companies as the flowers come directly from the grower and are shipped via fedex using either overnight or two day service.
Typical order averages $80
Shipping charges of around $16.95
Year of plants (6 mos worth) $250
Prior customers: 5M ??“ 4.5% yield
Flower recipients who were not customers: 2M ??“ 1% yield
Targeted direct mail: 3M ??“ 1% yield
57% of Calyx customers were women, 30-55, with above avg disposable income.
Marketing expense: .68 per catalog + .06 per rented name = 6.8M + 180,000 = 6.98M
1.) Increase # of catalogs to rented mailing lists.
a. Cheap, but very low yield.
2.) Increase mass-media advertising.
a. Used successfully to launch tastygram and Teddy Bear brands.
3.) Increase internet advertising
a. Online sales represented 40% of Calyx revenue.
Can only use 1 strategy, that will have the greatest impact to the company??™s financial performance.
Bear Gram = 2M catalogs sent out to existing customers, 66% of whom are men who purchase gifts at the last minute. ? a market that Calyx is missing.
? Standard shipping service: $16.95
? Rush Delivery: add $10
? Sat Delivery: add $10
– Synergize with Bear Grams to 1.) look for cross-market opportunities with their predominantly male custumer base 2.) send targeted catalogs directly to Bear Gram customers, or add an insert to a current Bear Gram catalog, offering 20% any Calyx order with the purchase of a Bear Gram. Still making margin of 30%. ? Customer matrix thingy (existing customer, new product).
– Increase internet advertising, to target male market. ESPN, WSJ, Maxim.com, CBS during NCAA Tournament, etc. Have adds tell the story of why Calyx flowers will make your significant other happier and more pleased with you than other delivery services. Need to let the customer know that Calyx flowers are a higher quality, and worth the price. This will promote the product with a target audience that is likely to spend additional money for rush / Saturday delivery.