Calyx Corolla

Dissecting the case: Calyx & Corolla

This is a summary of the Calyx & Corolla case that intends to tie together some of the in-class discussion with general themes that come up in many of our cases. It should also give you an idea of what types of issues you should be addressing in your major case group write-ups.

Overview

There are a few major challenges that C&C is facing in this case. The most immediate challenge presented in the case itself is their desire to grow the business and reach more customers. Specifically, the management is considering a major advertising campaign to go head-to-head against FTD. However, this masks a deeper challenge, and C&C's real problem. Their problem is that they aren't entirely clear who their customers should be - in other words, is the mass market approach of FTD really the best match to their product? As a small company, they need to figure out the best way to use their scarce marketing resources, to reach customers who are the best target for their offerings. (Note that this type of "problem assessment" should be part of your case cover memo.)

Company - Competition - Customers

When discussing company strengths and weakness, it's easy to focus on the "internal" perspective from which the case is written. For example, with C&C, their obvious strengths are their shortened distribution system, their strong management team, the relationships with their partners, etc. However, to really be able to use the company analysis to help set your marketing strategy, it's important to take the analysis one step further and think about the strengths & weaknesses in terms of the benefits to the customer. So, the shortened distribution means that the flowers will last longer, and relationships with partners means that C&C can always tell a customer the status of a shipment. The reason we want to focus on these benefits is because, when we get to STP analysis, we'll need to start matching our benefits to the various segments - being able to define those customer benefits now will make that process easier.

A similar argument needs to be made for the competitor's strengths and weaknesses. Again, be able to convert the internal perspective to a customer benefit perspective. One of the best ways to think about what your competitors offer is to focus on which segments are currently buying from those competitors - then you can determine what benefits those buyers are getting that makes the competitor a good provider. You also want to look for under-served segments (i.e., segments that aren't strongly attracted to any one firm) or specific needs that current buyers complain about. This will help you identify gaps in the competitive spectrum that you may be able to pursue.

In terms of customers, we'll get into more depth of analysis with them under STP. At this point, you want to have an overall view of the market (how large is it, is it growing or shrinking, overall trends, etc.). It may also be useful here to think about customer's other options for meeting their needs with this product - for example, buying chocolates or teddy bears instead of flowers on Valentine's Day, or decorating your house with artificial flowers.

Segment - Target - Position

The importance of segmentation can't be underestimated. Getting the segmentation right is essential for setting the rest of your strategy. However, it is also one of the most difficult steps, because there are so many ways to define a segment that you can easily go down a path that isn't really useful in the end. As an extreme example, you could segment the market based on allergy sufferers vs. non-sufferers (and then declare that you're targeting non-sufferers). While this is useful for some products (allergy medications?) it doesn't have many advantages for C&C - the biggest reason being that C&C's products are really no different from the competition in the eyes of these two segments. In other words, you want your segmentation to be aligned with your product benefits such that it'll become clear which segments are a good match to your strengths and which segments will be better off with a competitor.

So, given all the possible ways to segment, what's the best approach? Remember that during the segmentation lecture we discussed several criteria: personal characteristics (e.g., demographics), behavior and purchase history, benefits sought, etc. Often, the best place to start is with benefits and behavior. In the case of C&C, thinking about their purchase motivation turns out to be the most logical starting point for segmentation - are they buying