Traditional floral business model Floral Catalog $x $2x $4x growers distributors wholesalersretail...
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Transcript of Traditional floral business model Floral Catalog $x $2x $4x growers distributors wholesalersretail...
![Page 1: Traditional floral business model Floral Catalog $x $2x $4x growers distributors wholesalersretail customers $8x.](https://reader036.fdocuments.in/reader036/viewer/2022082816/56649d845503460f94a6a8cf/html5/thumbnails/1.jpg)
traditional floral business model
Floral Catalog
$x $2x $4x
growers distributors wholesalers retail
customers
$8x
![Page 2: Traditional floral business model Floral Catalog $x $2x $4x growers distributors wholesalersretail customers $8x.](https://reader036.fdocuments.in/reader036/viewer/2022082816/56649d845503460f94a6a8cf/html5/thumbnails/2.jpg)
Floral Catalog
Floral Catalog
Calyx & Corolla
customers growers
![Page 3: Traditional floral business model Floral Catalog $x $2x $4x growers distributors wholesalersretail customers $8x.](https://reader036.fdocuments.in/reader036/viewer/2022082816/56649d845503460f94a6a8cf/html5/thumbnails/3.jpg)
Floral Catalog
Floral Catalog
![Page 4: Traditional floral business model Floral Catalog $x $2x $4x growers distributors wholesalersretail customers $8x.](https://reader036.fdocuments.in/reader036/viewer/2022082816/56649d845503460f94a6a8cf/html5/thumbnails/4.jpg)
Why are they losing money every year?
$ Millions
![Page 5: Traditional floral business model Floral Catalog $x $2x $4x growers distributors wholesalersretail customers $8x.](https://reader036.fdocuments.in/reader036/viewer/2022082816/56649d845503460f94a6a8cf/html5/thumbnails/5.jpg)
How costly is it to attract customers?
Calyx & Corolla
![Page 6: Traditional floral business model Floral Catalog $x $2x $4x growers distributors wholesalersretail customers $8x.](https://reader036.fdocuments.in/reader036/viewer/2022082816/56649d845503460f94a6a8cf/html5/thumbnails/6.jpg)
How well do the catalogs work?
• What % of sales from catalog?
• How many catalog sales is this?
• How many sales from previous customers?
• How many from first time customers?
• How many catalogs were sent out to these first timers?
• What is the response rate?
![Page 7: Traditional floral business model Floral Catalog $x $2x $4x growers distributors wholesalersretail customers $8x.](https://reader036.fdocuments.in/reader036/viewer/2022082816/56649d845503460f94a6a8cf/html5/thumbnails/7.jpg)
Is a response rate of 0.004 sufficiently high to justify sending out the catalogs?
(1)
(2)
Expected profit per Catalog = Cost of catalog
RR* [$69 – ($17+$9+$5)] = 0.36
RR* [$38] = 0.36
What was the cost of getting 45,000 new orders? 3 Million * 32 cents = $0.96 Million 7.9 Million * 40 cents = $3.16 Million $4.1 Million
4.1 Million / 45,000 = $91 per customer!
RR* = 0.01
![Page 8: Traditional floral business model Floral Catalog $x $2x $4x growers distributors wholesalersretail customers $8x.](https://reader036.fdocuments.in/reader036/viewer/2022082816/56649d845503460f94a6a8cf/html5/thumbnails/8.jpg)
Is lifetime customer value > customer acquisition
cost?
(0.05 * $38) – $0.32 = $1.58
customer acquisitioncost
lifetime customer value
-$53 time
![Page 9: Traditional floral business model Floral Catalog $x $2x $4x growers distributors wholesalersretail customers $8x.](https://reader036.fdocuments.in/reader036/viewer/2022082816/56649d845503460f94a6a8cf/html5/thumbnails/9.jpg)
Past advertising starting to pay off?
Year 1 Year 2 Year 3 ………????
Sales +756 +4,018 +10,259
Advertising Costs -1,223 -4,466 -7,021
![Page 10: Traditional floral business model Floral Catalog $x $2x $4x growers distributors wholesalersretail customers $8x.](https://reader036.fdocuments.in/reader036/viewer/2022082816/56649d845503460f94a6a8cf/html5/thumbnails/10.jpg)
lifetime customer value
“present value of a stream of revenue a customer produces”
‧ focus on long-term relationship, not a single transaction
![Page 11: Traditional floral business model Floral Catalog $x $2x $4x growers distributors wholesalersretail customers $8x.](https://reader036.fdocuments.in/reader036/viewer/2022082816/56649d845503460f94a6a8cf/html5/thumbnails/11.jpg)
CC's opportunities & threats
1. Should Calyx & Corolla grow rapidly or slowly?
2. Increase Primary as well as Secondary Demand?
3. How can they reduce customer acquisition costs?
4. How can they increase customer lifetime value?
5. Is their target market too small?
• The last time you bought flowers, where did you buy
them, and why did you buy them?
![Page 12: Traditional floral business model Floral Catalog $x $2x $4x growers distributors wholesalersretail customers $8x.](https://reader036.fdocuments.in/reader036/viewer/2022082816/56649d845503460f94a6a8cf/html5/thumbnails/12.jpg)
Willingness to Assemble
Demand for Freshness
![Page 13: Traditional floral business model Floral Catalog $x $2x $4x growers distributors wholesalersretail customers $8x.](https://reader036.fdocuments.in/reader036/viewer/2022082816/56649d845503460f94a6a8cf/html5/thumbnails/13.jpg)
Flower Market Segments
![Page 14: Traditional floral business model Floral Catalog $x $2x $4x growers distributors wholesalersretail customers $8x.](https://reader036.fdocuments.in/reader036/viewer/2022082816/56649d845503460f94a6a8cf/html5/thumbnails/14.jpg)
How frequently should catalogs be sent? And to whom?