Blossoming Profits Through Superior Marketing: A Case Analysis of Calyx & Corolla

Blossoming Profits through Superior Marketing:

A Case Analysis of Calyx & Corolla

This analysis focuses on the case study of Calyx & Corolla, a mail order flower company.

Calyx & Corolla is a relatively new company that utilizes a different distribution channel than

conventional companies for fresh flowers. Calyx & Corolla mails flowers direct from the

growers to the customers via Federal Express and eliminates the middleman (Appendix A). This

permits Calyx & Corolla to provide fresher, longer-lasting flowers to consumers. The

management of Calyx & Corolla is contemplating a change in their long-term business strategy

as they examine their ability to compete with more traditional outlets such as retail flower shops

and wire services like FTD. Ruth Owades, the founder of Calyx & Corolla, has hired Marketing

Consultants (MarCo) to assess the strengths and weaknesses of her business and make

recommendations on how her company can fully develop their mail order concept.

Background:

Calyx & Corolla is a small mail order flower company that was founded in 1988 by Ruth

Owades. Ms. Owades secured $2 million in capital from approximately 18 different investors in

order to launch the company. By 1991, Calyx & Corolla exceeded $10 million in annual sales

and Owades and her associates were reassessing the firm's long-term growth strategy (Wylie and

Salmon, 1991). Up to this point, Calyx & Corolla was primarily a mail order company, but

management is now considering expanding their market and is unsure of how they should

proceed. Recently, a well-financed venture capital-backed start-up failed and Calyx & Corolla

acquired some of its assets. Another unproven competitor recently entered the market, financed

by a large Japanese conglomerate.

The company's success is primarily due to a few key employees. Ruth Owades plays a

major part in the selection and pricing of flowers and other merchandise that appears in the

catalog. Fran Wilson, the vice president of operations, is responsible for customer orders and

service, day-to-day communications with growers, systems development, and finance. Ann

Hayes Lee is responsible for merchandise development and catalog creation and production. She

is also responsible for non-direct mail initiatives that are aimed at accelerating the growth of the

business. Calyx & Corolla espouses the values and creativity of these individuals and their

employees. Taking into consideration the skills, values, and aspirations of the entrepreneurs and

the investors, and the external elements which confront them, MarCo is prepared to present a

plan to fully develop the Calyx & Corolla model.

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Strengths of Calyx & Corolla:

Calyx & Corolla provides a much fresher product to the customer than their competitors.

Fresh flowers are delivered within one to four days after being cut by the growers. The

competition (such as FTD) delivers flowers that were cut one to three weeks prior. Calyx &

Corolla works closely with the supplier or grower to provide the most optimum process from

cutting to point of shipping.

Calyx & Corolla have an excellent relationship with the growers. Calyx & Corolla uses

30 quality growers to supply their flowers. The top eight of these growers supply close to 80%

of their orders, however no one grower supplies more than 25% of its products to Calyx &

Corolla (Wylie and Salmon, 1999). Calyx & Corolla has exclusivity agreements with all

growers they do business with. The management of Calyx & Corolla works very closely with

the growers on a continual basis to ensure that quality arrangements and packaging are achieved.

Growers are paid wholesale prices and an extra surcharge to provide the extra services of

arranging and packaging the flowers. To accomplish these extra services or retail

responsibilities, the growers employ additional people. Calyx & Corolla senior managers stay in

close contact with representatives from each grower they do business with to collaborate on

availability of flowers, arrangements, schedules, accessories and packaging supplies.

Calyx & Corolla's relationship with their shipper, Federal Express, is just as strong and

critical as their relationship with the suppliers. They have a special contract with Federal

Express that includes special handling of the packaged flowers. During peak periods, Federal

Express provides trailers to the growers to expedite the shipping process. During adverse

conditions, such as extreme weather, Federal Express provides extra delivery services by not

leaving packages in situations where the flowers could be damaged or ruined. To help track

shipments and provide better customer service, Federal Express provides computer terminals to

both Calyx & Corolla and the suppliers.