3. Problem Definition
• Business Growth for CC
• Fragmented DISTRIBUTION system
• Focused on Retention than Acquiring
• Whether to proceed or not with the new
advtng campaign?
4. Creating Customer Value
• Efficient Distribution system
• Relationship Marketing- Forward and Backward
• Quality
• Emotions
• Service
• Technology
• Price
• Information srvice
5. Product Market Matrix
Existing Market New Market
Existing Product Market Penetration Market Development
New Product Product Development Diversification
6. CC Comparison with FTD
Competitors Price Distribution
Margin to
growers
Major
Channel of
Distribution
Revenue from
the major
channel of
distribution
Present
Strategy
Future
Strategy
FTD $40 10% Yellow Pages
(35% of
Advtng Rev)
CC $23 20% Catalog 70% ????
7. Financials
• Sales/Revenue Growth-
• Opex-
• Profit Growth-
• Market Size
• Cost of Customer Acquisition at present
• Cost of Customer Acquisition under new campaign
• Cost of Mini Catalog- $10.26 mn
• No of Orders for CC- approxly 320600 in 1990
• No of CUSTOMER for CC in 1990-
8. LOYAL CUSTOMERS
PARTICULARS AMOUNT
Number of customers 100000
Total orders 60000
Response Rate 7.5%*100000= 7500
Number of orders per customer 60000/7500= 8
Catalog expenses per customer p.a 100000X12= 1.2 million
9. RECIPIENT AND RENTED LISTS
PARTICULARS AMOUNT
Customers 500000
Catalogues sent 6*500000= 3 million
Remaining catalogs 12.055 million
TOTAL CATALOGS= 1.2+3+12.055= 16.255 MILLION
10. PER CATALOG COST
Using Exhibit 1
PARTICULARS AMOUNT
Selling & Advertising expenses (1990) $7021000
Share of catalogs 70%
Total 4914700
Cost per catalog 4914700/16.255= 30 cents
15. Matrix for Freshness and
Willingness to assemble
Funerals Supermarkets
Florists C & C
Willingness to assemble
High
High
Low
Low
Demand
for
Freshness
