Individual Assignment 1 - Session 2 - Calynx Flowers

Question 1: What is the key reason for the weak financial performance for Calyx Flowers?

One of the key reasons could be that the current strategy of promoting using catalogues is
outdated and cannot compete with methods used by other retailers. Although the costs of
producing and mailing the catalogues are relatively low, the response yield is just too low.
With 4.5% for old customers and 1% for new customers. Thus, a shift in marketing strategy
would likely allow Calyx Flowers to leverage its operations on a wider scale to better
compete with other retailers and improve their financial performance.

Question 2: Which of the three options presented at the end of the case would you
choose in order to improve Calyx Flowers’ financial performance and why?

I would select either increasing mass-media advertising or internet advertising. Both of

these ways would allow Calyx Flowers to compete with another significant retailer, either
FTD florists or 1-800-FLOWERS.COM. Ideally, I would suggest pursuing both approaches but
at different times. Internet advertisement should be more or less consistent over the year
to capture flower sales on birthdays and special occasions. On the other hand, mass-media
advertising could be boosted shortly before and during holiday seasons and Valentine’s Day.
This will allow Calyx Flowers to access both the online market and capitalise on larger tv-
audiences during holidays.

However, if I had to pick one option, I would go with Internet advertising. This way Calyx
Flowers can save on the high mass-advertising costs of Mass-media marketing. Moreover, as
their online sales constitute 40% of total sales, this would likely lead to a significantly
volume of total sales.