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Calyx and Corolla

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Executive Summary
The goal is to reduce sales and marketing costs by 45% (Exhibit 3) by targeting customers who value fresh and long-lasting flowers for decorative purposes. Our key impediment is cost effectively identifying and reaching our targeted customers. The solution is to: (1) correctly identify Calyx’s optimal target segment and (2) develop a marketing mix that effectively and efficiently reaches this segment. To reach this segment, Calyx should advertise through print media outlets whose readership values Calyx’s unique offering, namely flower longevity and freshness, and continue to pursue in-store promotion opportunities with select home décor retailers and upscale department stores.

Problem Analysis
Segmenting the market by looking solely at the demographic and geographic characteristics of its existing customers has led Calyx to believe that it can expand its customer base by simply sending catalogs to individuals who share similar demographic profiles. However, the large discrepancy in yields between current customers and those who were obtained from rented mailing lists (Exhibit 2), highlights the fact that Calyx is not effectively reaching the customer segment that most values its services and is unprofitable due to excessive catalog spend. In order to guide the process of identifying Calyx’s target segment and proposing alternative methods to reach this segment, we have constructed the following positioning statement:

To those who value flowers for decorative purposes, Calyx is the distributor of flowers and plants that are fresh and long lasting, because of our direct relationships with flower growers and Federal Express.

Calyx should focus its segmentation efforts on targeting customers who value what is unique about its service. Based on the value proposition of delivering flowers with longevity and freshness, we have identified

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