Calyx & Corolla Case
Target Market & Brand
Calyx & Corolla is fighting for business in a field crowded by supermarkets, Amazon, and local vendors. In such a crowded space, where prices are being driven down, who does it target and how does it position its brand?
Calyx & Corolla should elevate itself as a luxury flower brand, targeting middle and high income households. Capitalizing off its existing strengths in distribution, Calyx & Corolla should deliver the best, most rare, and most stylish flowers for a premium to women at the highest income brackets. For this population, flowers are a part of interior design. Once the product has been figured out, collaborations with well known fashion designers or style experts (ex., the Marc Jacobs living room bouquet, the Manrepeller , the Tom Ford bedroom collection, etc) can help elevate the brand to the luxury level. Calyx & Corolla should envision how every part of their brand is experienced – from the color of box the flowers are delivered in (think of how Tiffany’s has used its branded color), to the plastic they are wrapped in, to their experience on the Calyx & Corolla website.
Where is Calyx & Corolla being seen? It could provide flowers for the most elite restaurants and stores in key cities where it aims to grow, with a small, discreet sign indicating that these are Calyx & Corolla flowers. It could co-sponsor posts on Instagram and Pinterest with brands like 1stdibs, Vogue, and prominent wedding magazines. Calyx & Corolla associates can consult on wedding flowers on any budget, and specialize on making the most unique bouquets.
Once it has established itself as a premium brand, it can create a more basic product, priced a little lower, for which it can charge a premium. For example, it can provide a monthly flower delivery. The monthly bouquet will be Calyx & Corolla quality, but stylistically more basic. However, it is the experience of receiving a luxury product that will renew your home that consumers will pay for, not specifically the flowers.
To keep its competitors at bay Calyx & Corolla should focus on the following areas when it comes to product offerings.
New Product Offerings in existing product lines. Calyx & Corolla should continuously offer new and exciting bouquets to reflect changing tastes, seasonal variation, or to introduce new products. Calyx & Corolla should put more emphasis on rare and fresh variety, and work with existing luxury brands to continue to elevate their product in the market. Products that are rare or/and stay fresh for longer are more valuable to customers. Flowers that last longer give customers sense of more satisfaction and value, and rare varieties of give them sense of being special.
Product Diversification. Calyx & Corolla should, in the short term, stick to flowers, as it is in its core strengths. However, eventually, it may want to diversify into interior design accessories – little details for the home that keep it on trend and stylish.
Standardization. Calyx & Corolla should create a standard line of interior design flowers, a classic line that will always be available for order. It should also have one or two other lines rotating designs and aesthetics that are more trendy or up-to-date.
Customization. Calyx & Corolla should not significantly customize their product, and keep their focus on high quality and consistent delivery.
Leveraging Internet and IT to offer better and new products. Calyx & Corolla should leverage the internet and information technology. Internet and IT can help the Company in multiple ways such as identifying changing customer tastes, tracking frequently ordered products, and tracking past history of purchase. It can also be used to continue to bring customers back to Calyx & Corolla, by tracking tastes and preferences and using them in marketing efforts.
Calyx & Corolla will not be competing on price. Cheap flower delivery companies are a dime a dozen. In order for Calyx & Corolla to survive, they need to price substantially higher than their competitors. They will need to become a luxury brand with a luxury price.
Another reason why Calyx & Corolla needs to price higher is because price is often seen as an indicator of quality and this is especially the case when dealing with uninformed customers. Calyx & Corolla is likely to deal with uninformed customers. Therefore, they should price higher than its competitors. Supplemental information and services provided by Calyx & Corolla can help support higher prices. A quick google search reveals most budget flower delivery is around $20. Most flower delivery packages on Amazon are around $15-$50. I suggest Calyx & Corolla’s prices should be at least $15 above this for similar packages and in reality, they should offer a variety of packages that are substantially above their competitors’ prices that include offerings not provided by the competition.
For bulk orders such as a weddings or other events encourage people to call a representative. At this point sales representatives can extract the most out of each customer. Simply put, the survival of Calyx & Corolla depends on its ability to carve out a niche. Its niche is the luxury/high end flower services and people in this market expect to pay higher prices.
One of the key success drivers for Calyx & Corolla was the efficient distribution channel that the firm utilized. Delivery by mail was an unchartered path for the industry at that point of time and the ease of ordering for customers coupled with better quality and long lasting flowers paid off well. The promotion through catalogues was also quite successful in the early days. However, with the internet penetration getting better, online ordering was the next channel to be capitalized upon.
In order to keep pace with the rapid growth in e-commerce, Calyx & Corolla needs to invest significantly in promoting its online ordering system and move from the Catalogue driven orders to online sales. At the same time, the firm also needs to be aware of the fact that it operates in a segment which has an emotional aspect of the consumers attached to it and that the sales experience is an important component of the marketing efforts.
While Calyx & Corolla invests in strengthening the online sales through its website, it should also try to collaborate with other e-commerce platforms and gift stores for cross promotion and sales. Overall, the firm needs to maintain its stellar presence in the Delivery by Mail channel, it needs to make sure of its presence in other channels as well to widen the customer segment that it can serve.
Unformatted text preview: Harvard Business School Case Study – Group 6 1. Who are Calyx & Corolla’s main competitors? ▪ Retail Florists – 59% Market Share ▪ Supermarket Florists – 18% Market Share ▪ Online direct competitors such as Stillwater 2. How should Calyx & Corolla be positioned vis-à-vis the competition? ▪ Service – Special packaging and messages – Quality of products and service – Make sure the consumer knows they are getting a fresher product ▪ Logistics – Need to ensure that there are enough growers to purchase from to meet consumer demand – Develop a relationship with FTD or comparable in consumer beliefs delivery service – Ensure a marketing campaign that will promote the business 3. Whom should Calyx & Corolla target? 1. Target demographic are women 30 – 55 who work and have substantial disposable income. They should send the multiple mailings per year to these customers and focus advertising in areas that will reach them. 2. Corporate clients, work on developing relationships with more corporate clients. 3. Market to people who have previously ordered. Email incentives and reminders of upcoming events could reengage previous purchasers. 4. Target new buyers with direct marketing and pair with local newspapers to reach those not use to 4. How does Calyx & Corolla fare in terms of sustainable competitive advantage? Favorable: ▪ Personal relationship with Growers ▪ Relationship with Federal Express ▪ Experienced, Knowledgeable, and dedicated management team Unfavorable: ▪ System is easily copied ▪ Relying on individual growers talents for arrangements and packaging 5. How should Calyx & Corolla grow? ▪ Increase selection to include other gifts for birthdays and other special events to try and compensate for traditional floral holiday trends ▪ Add more subscription lines like their Year of Orchids to appeal to other floral preferences ▪ Add a package deal that allows for delivery of flowers on 2 holidays (their choice) and an additional delivery day to ensure that you’ve captured the consumers for the holidays in advance ▪ Continue to build relationships through media that way people can post on your site when they receive flowers or gifts. Have an incentive program for them 6. How fast does Calyx & Corolla need to grow? ▪ Need to at least meet their projected sales growth. ▪ Cut costs by continuing to improve operational efficiency. ▪ Find ways to grow business through new marketing avenues. Current Projected Growth Sales $10,259 $15,163 47.76% COGS 2,452 3,487 42.21% Gross Margin 7,807 11,676 49.56% ...
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