# LongBench v2 / 66f3918f821e116aacb2d8b7

task_id: 8db22a8f-5646-5cdf-b72c-1ca61fbbe22d
task_key: train--66f3918f821e116aacb2d8b7
task_revision_id: 3

{"choice_A":"High-income women aged 30-55 - Large size, strong growth potential, high purchasing power, and aligns well with Calyx & Corolla's strengths","choice_B":"Teenagers and college students - Small size, low purchasing power","choice_C":"Small local businesses - Moderate size, stable growth, moderate purchasing power, requires strong local relationships","choice_D":"Individuals who typically shop at floral boutiques or similar retailers","context":"Harvard Business School\n9-592-035\nRev. October 6, 1995\nDavid Wylie prepared this case under the supervision of Professor Walter J. Salmon as the basis for class discussion rather\nthan to illustrate either effective or ineffective handling of an administrative situation. Certain numbers have been\ndisguised.\n\n1\nCalyx & Corolla\nWell, it’s two botanical parts of the flower—the calyx (the guard leaves that protect\nthe bud) and the corolla (the flower itself).  It was on the very first list of names that a good\nfriend and I brainstormed and we liked it right away.  I liked the way it sounded and the way\nit looked and its uniqueness.  But a lot of people didn’t like it—too hard to pronounce and\nnobody would know what it meant.  So we went back to the drawing board, and brainstormed\na second and third and fourth list.  Each time we’d get a consensus on a name, we couldn’t\nclear it with the trademark office.  Finally, so much time had elapsed, we were ready with a\ncatalog layout but had no company name and no logo . . .\nOne Friday evening, we all unenthusiastically agreed on using the name: “The First\nFlower Company.”  That Sunday, I was leafing through some trade magazines and turned to\na full-page ad by a new consortium of South American flower growers: “The First Flower\nCorporation”!\nThat was it—I walked in on Monday morning, showed the ad to my staff and said:\n“We’re going to be Calyx & Corolla.”\n—Excerpt from Owades speech\nIt had been two and a half years since Calyx & Corolla had pioneered the concept of selling\nfresh flowers by mail.  During 1990, it had consummated over 150,000 transactions, yielding revenues\nin excess of $10 million.  The company’s results had surpassed the plan that Ruth Owades, its\nfounder, had presented to the 18 investors who had provided the original $2 million in capital.  In\nfact, the results were sufficiently positive to enable Owades and her management group to raise\nanother $1 million in the Spring of 1991, mainly from the original investors.  (See Exhibit 1, Five-Year\nSummary Financial Statements and Projections.)\nNevertheless, stimulated by their success in introducing a new distribution channel for\nflowers, Owades and her two key associates, Fran Wilson and Ann Lee, were reassessing the firm’s\nlong-term growth strategy.  Was Calyx & Corolla more a mail order operation or should it compete\ndirectly against more traditional outlets, such as retail florists, and wire services, such as Florists\nTelegraph Delivery (FTD)?  How fast did it have to grow to protect its initial success?  What would be\nthe financial implications of various growth strategies?  How should its personal objectives and those\nof its investors and employees influence the character and pace of growth?\nThis document is authorized for use only by Zhuojun Yi in BUSN 37000 03,02,01 (Autumn 2023) Marketing Strategy at University of Chicago, 2024.\n\n\n592-035\nCalyx & Corolla\n2\nCalyx & Corolla was an exceptionally innovative direct mail concept.  Besides mailing six\nyearly color catalogs and having an 800 telephone number, its distribution and transportation\narrangements were unique.  Orders from customers were received by telephone, fax, or mail at the\ncentral office in San Francisco and then sent via fax or computer to the 30 flower growers who\nsupplied Calyx & Corolla.  They, in turn, packed and shipped individual orders and sent them\ndirectly to consumers by Federal Express.  Calyx & Corolla customers thus received much fresher\nflowers, often fresher by as many as seven to ten days, than were available through conventional\nretailers.  Prices, which included the cost of delivery, were competitive with conventional florists.\n(See Exhibit 2, letters from customers.)\nIf the goal of most entrepreneurs is to build a business that’s better than what’s\nalready out there, Ruth Owades has done it in spades.  In fact, you could say she has created a\nnew market. . . .\nUntil Calyx & Corolla came along, the hugely lucrative $8.4 billion American flower\nindustry had encountered few innovations.  There had been flowers by wire, but not garden-\nfresh, exotic flowers displayed in a beautiful catalog (you actually get to see what you’re\nordering), with a money-back guarantee.\nBut as Owades realized early on, having a revolutionary idea is one thing; executing\nit is something else again.  To make her brainchild work, she had to get major industry players\nto disrupt their established routines and see things her way.\n- Working Woman Magazine, February 1991\nThe Calyx & Corolla Management Team\nRuth Owades was no stranger to the mail order business.  Upon graduation from the\nHarvard Business School in 1975, she joined the CML Group as director of marketing.  The CML\ngroup then owned a number of retail and direct mail businesses.  Within two years, Owades\nproposed to CML executives that they launch a direct mail business focused on garden implements\nand accessories.  When they declined, Owades resigned and, under her own auspices, launched\n“Gardener’s Eden.”  Very quickly, the business grew and prospered.\nIn 1982, Owades sold Gardener’s Eden to Williams-Sonoma, an upscale direct mail and retail\nseller of cookware, serving pieces, and other merchandise associated with the kitchen.  For four and a\nhalf years Owades directed the Gardener’s Eden division of Williams-Sonoma, during which time it\ncontinued to grow and prosper.  Since the price Williams-Sonoma paid for Gardener’s Eden was\nbased in part upon a multiple of sales in the years subsequent to the purchase, the funds Owades\nultimately received for Gardener’s Eden reflected her stewardship during these years.\nAfter about a year of relaxation and rejuvenation following her resignation from Williams-\nSonoma, Owades decided to establish Calyx & Corolla.  This time, she enlisted Fran Wilson, a 1983\ngraduate of the Harvard Business School and a former employee of Williams-Sonoma, as vice\npresident of operations.\nAfter about a year of operation, Ann Hayes Lee joined Calyx & Corolla as vice president of\nmarketing.  Lee was a veteran of the catalog business.  She had spent almost twenty years in the\nindustry, most recently with the Roger Horchow Company, a catalog seller of both home goods and\napparel, where she was creative director.\nI was fortunate to convince two of the most talented and experienced people\nin our industry to join the Calyx & Corolla start-up team—Fran Wilson became vice\npresident of operations and created the unique yet crucial systems that make this\nThis document is authorized for use only by Zhuojun Yi in BUSN 37000 03,02,01 (Autumn 2023) Marketing Strategy at University of Chicago, 2024.\n\n\nCalyx & Corolla\n592-035\n3\nbusiness work.  Ann Hayes Lee became vice president of marketing, creating six\nspectacular catalogs a year, while overseeing all merchandising and other marketing\nprograms.\n- Excerpt from Owades speech\nAs in many small businesses, titles did not fully define responsibilities at Calyx & Corolla.\nOwades herself took a major hand in the selection and pricing of flowers and other merchandise that\nappeared in the catalog.  She also set the critical strategy for the catalog mailing plan.  Wilson was\nresponsible for customer orders and service, day to day communications with growers, systems\ndevelopment and management, and finance and accounting.  Lee took responsibility for merchandise\ndevelopment and catalog creation and production.  She was also responsible for a number of\nnondirect mail initiatives aimed at accelerating the growth of the business (described in more detail\nlater).\nThe entire management team of Calyx & Corolla was dedicated to the success of the business.\nOwades realized that the ultimate success of Calyx & Corolla would hinge on the efforts of this team.\nThey had adapted their lifestyles to the rigors of a start-up venture but each executive appreciated the\ncongenial corporate culture and found job satisfaction and the promise of a substantial payout at\nsome future date to be powerful incentives.\nThe Fresh Flower Industry\nRetail flower and plant sales were almost a $9 billion business in the United States in 1990,\nhaving grown at a rate of 7.7% since 1985.  While most flowers were grown domestically, over half of\nthe carnations, almost a third of the roses, and a variety of other flowers were imported from over 50\ncountries around the world.  Colombia was the major source of imported flowers, representing over\n60% of the total.\nThe horticulture industry was extremely fragmented at all levels, with small, family-operated\ncompanies dominant among growers, distributors, wholesalers, and retail florists.  Although there\nwere some larger organizations, they did not represent a major share of the business.  The typical\nchannel of distribution was from growers to distributors located in the growing regions to\ngeographically dispersed wholesalers who sold to florists, supermarkets, and other retailers in\ngeographic proximity to them.  Of the retailers, the 25,000 florists had the largest market share, selling\n59% of all floriculture products (flowers, seeds, and potted plants) in 1987, the last year for which\ngovernment retail statistics were published.  Supermarkets had about 18% of this market, while\nnurseries, mail order companies (such as seed companies), and other miscellaneous retailers\naccounted for the balance.  In most major cities there were flower markets in which a number of\nwholesalers would gather to sell their goods to retailers.\nOften industry participants would not confine themselves to a single role.  For example, most\ngrowers distributed some flowers directly to local or more distant wholesalers and retailers.  Many\ndistributors and wholesalers engaged in some of their own production.  In addition, direct purchasing\nrelationships often existed between growers and distributors and larger retailers such as supermarket\nchains.\nDistributors generally paid growers in 60 to 90 days and then extended the same terms to\nwholesalers.  Retailers usually paid wholesalers in cash.  They shopped for availability, quality, and\nfreshness from the many wholesalers who serviced them.  Distributors typically marked up flowers\n50% on cost to wholesalers who in turn marked them up, on cost, 100% to retailers.  Florists took a\nmarkup of another 150% to 200% on cost.  A flower that a grower would sell for approximately $5, for\nexample, would thus cost the ultimate consumer about $40.  Exhibit 3 includes summary financial\ndata for FTD affiliated florists as well as additional data on their sales and advertising expenditures.\nThis document is authorized for use only by Zhuojun Yi in BUSN 37000 03,02,01 (Autumn 2023) Marketing Strategy at University of Chicago, 2024.\n\n\n592-035\nCalyx & Corolla\n4\nRetail florists were very service oriented.  Often they prepared custom bouquets and, for\nmajor events such as weddings, provided flower arranging services, usually as part of the cost of the\nproduct.  It was not unusual, for example, for the bill for flowers used in a large wedding to amount\nto several thousand dollars.\nFlowers were purchased by consumers for a variety of occasions.  Flowers were an essential\npart of most weddings and funerals and were often given as manifestations of love and caring for\noccasions such as birthdays, anniversaries, convalescence, Valentine’s Day, and Mother’s Day.  Cynics\noften claimed that flowers were given to assuage guilt rather than to demonstrate affection.  Many\nAmericans also bought flowers for occasions such as dinner parties or regularly kept fresh flowers or\nplants in their homes.\nFresh flowers were more ubiquitous in Europe than in the United States.  Per capita\nconsumption of flowers and plants in the United States was $36 annually, whereas in Holland it was\n$60, which approximated the average in Europe.  Americans were only beginning to acquire the\nEuropean propensity to purchase flowers for themselves year round.\nFlowers varied in their perishability.  Roses, for instance, could last as long as one to two\nweeks from the time they were picked until they would have to be discarded, while anthurium could\nstill be acceptable for sale two to three weeks after picking.  Time, however, was not kind to flowers,\nand quality deteriorated steadily from the time of picking.  Each day a flower remained unsold\ndiminished its remaining value.\nEfficient distribution was thus key to the flower industry.  The almost infinite variety of\nspecies, colors, and growing locations on the supply end, however, and fragmentation within the\nchannels of distribution resulted in a rather inefficient distribution system.  A flower might, therefore,\nbe as much as seven to ten days old before it was available for sale in a retail store.\nAlthough some flowers were bought and taken from the store by purchasers, most were\ndelivered to the recipient.  Typically, florists made deliveries themselves for an extra charge within a\nradius of several miles from their store.  For delivery beyond their own service areas, florists usually\nused FTD or one of the several competing service organizations that had cloned FTD.\nFTD was a member-owned, worldwide cooperative of 25,000 florists.  Its members took\norders from local customers for delivery by member florists at other locations.  Although there was a\ncatalog of “FTD Bouquets” at each member florist, there was no guarantee that the delivery florist\nwould deliver the freshest flowers in inventory.  The consumer to whom FTD historically had\nappealed represented a wide cross-section of households with incomes in excess of $35,000.  Typically\na consumer would pay an extra $3.50 order transmission fee and, depending on location and distance,\nan additional $6.50 for delivery.  During holiday periods, incoming wire orders accounted for 21.7%\nof the revenues of FTD florists, while outgoing wire orders accounted for another 18.7% according to\na 1989 FTD survey.  During nonholiday periods, these proportions were 17.9% and 15.1%\nrespectively.  FTD processed almost 21 million orders in 1990, including more than 500,000 orders\nand messages daily during holiday periods.  Of the total order (including flowers, transmission fee,\nand delivery charge), the florist who originated the order received 20%, the florist who delivered the\norder 73%, and FTD 7%.\nIn addition to its clearing service, FTD offered its members promotional and advertising\nsupport, supplies, educational programs, marketing research, publications, and credit card\nprocessing. With the total value of orders from U.S. florists of over $700 million (almost three times its\nnearest competitor) and revenues of approximately $49 million, FTD spent over $24 million on\nadvertising in 1989, 55% of which was concentrated in holiday periods.\nAccording to Leading National Advertisers, an Arbitron publication, FTD concentrated most of\nits advertising on network television spots (73%), newspaper advertising (14%), and network radio\nThis document is authorized for use only by Zhuojun Yi in BUSN 37000 03,02,01 (Autumn 2023) Marketing Strategy at University of Chicago, 2024.\n\n\nCalyx & Corolla\n592-035\n5\n(8%).  The balance was spent on a mixture of magazines (4%), outdoor advertising, and cable and\nlocal television spots.  The image promoted in electronic media had been “FTD, the feeling never\nends,” featuring ex-Ram’s defensive tackle, Merlin Olsen.  FTD was shifting, however, to a theme of\n“It’s as easy as FTD” and shifting the percentage spent on more costly prime time television to news-\nhour spots.  The intention was also to reallocate significant advertising dollars to magazines and\nmajor regional newspapers.  Print advertising was much more product oriented.  FTD even planned\nto put a mini-catalog in magazines featuring six everyday products and a selection of seasonal\nbouquets.  (See Exhibit 4 for sample FTD advertisements and Exhibit 5 for monthly advertising\nmedia expenditures of FTD itself.)\nOne of the largest FTD members was a 1984 start-up called “800-Flowers,” which was\nbecoming increasingly popular.  When customers called 1-800-FLOWERS, one of 300 salespeople in\nits telemarketing center would take an order and transmit it by FTD or another service to a network\nof florists around the country.  Minimum orders were $35 and went up in $5 increments.  The retail\ncustomer was charged a $2.96 relay fee and a $5.99 handling fee in addition to the price of the\nflowers.  800-Flowers received as its fee 25% of the flower order from the delivering florist.  Revenues\nof 800-Flowers in 1990 were about $16 million.  800-Flowers advertised primarily through billboards,\nsubway posters, and on CNN television.  Its advertising expenditures in 1990 totaled $5 million.\nSupermarkets were also becoming increasingly important flower retailers.  Recently their\nflorist departments were moving price points upwards from under $10 to compete more with florists\nwhose average order was over $32.  In addition, larger supermarket chains were purchasing directly\nfrom growers, distributors, and importers.  Although many florists considered supermarkets to be a\nserious threat, they felt that supermarket employees lacked the sensitivity and expertise required to\nhandle, package, maintain, and sell flowers effectively.  Flower shops in supermarkets often, for\nexample, were placed next to produce departments where fruit, as it ripened, produce ethylene gas, a\nchemical which hastens the deterioration of flowers.  Sixty-five percent of the nation’s 17,460 chain\nand 35% of the nation’s 13,290 independent supermarkets sold flowers in 1990.  The average annual\nsales for supermarket floral departments was $104,950, having grown almost fourfold in the past 10\nyears.\nCalyx & Corolla\nCalyx & Corolla represented a true departure from traditional channels of distribution by\ndirectly linking the consumer with growers and, through Federal Express, growers with consumers.\nCalyx & Corolla was able to reduce very substantially the time it took to deliver flowers to the\nconsumer’s door.  Calyx & Corolla typically delivered roses to the consumer within one to two days\nfrom the time they were cut.  Anthuriums were delivered within three to four days.  FTD deliveries of\nroses and anthuriums, in contrast, often occurred one to two weeks and two to three weeks,\nrespectively, following cutting.\nOwades and her colleagues realized that Calyx & Corolla was an entirely new concept which\nrevolutionized the distribution of flowers.  In order to succeed, however, they also had to understand\nthe emotions that consumers tried to convey with flowers and to maintain critical relationships with\nboth growers and Federal Express.  Owades said in a speech about the Calyx & Corolla concept:  “I\nenvisioned a table with three legs, and Calyx & Corolla was only one of them.  The second was the\nbest flower growers available, and the third was Federal Express, the number one air carrier.”\nOwades herself took responsibility for maintaining these relationships.  She often telephoned or\nvisited growers to overcome problems that had arisen, to negotiate seasonal prices, or simply to\nfurther strengthen healthy relationships.  She also maintained direct contact with Federal Express\nrepresentatives to maintain and improve their service.\nAlthough Calyx & Corolla was by far the most successful of the “new wave” of mail order\nflower retailers, other companies with slightly different concepts were arising.  The most direct\nThis document is authorized for use only by Zhuojun Yi in BUSN 37000 03,02,01 (Autumn 2023) Marketing Strategy at University of Chicago, 2024.\n\n\n592-035\nCalyx & Corolla\n6\ncompetitor, a very well financed venture capital-backed start-up called “Floral Gift Express,” had\nrecently failed and Calyx & Corolla had acquired some of its assets.  “Stillwater,” another yet-\nunproven competitor, had recently entered the market.  It was a division of a large, well-capitalized\nJapanese conglomerate.\nCalyx & Corolla was not without problems, either.  As Owades suggested:\nDid we have problems?  Of course.  How about the coldest December on\nrecord for our first Christmas?  Where even our California and Florida growers were\nin a deep freeze (not to mention our customers in Minneapolis and Boston).  Did we\ndeliver their holiday bouquets?  Of course.  How?  With numerous sleepless nights\nand with the extraordinary combined efforts of that strong partnership I spoke\nabout—of Calyx & Corolla, our growers, and Federal Express, a partnership getting\nstronger and more solid with each challenge.\n—Excerpt from Owades speech\nCalyx & Corolla Operations\nThe headquarters of Calyx & Corolla were in modest offices just south of downtown San\nFrancisco.  Four thousand square feet housed the three senior executives, middle management,\ncomputers and fax machines, and all supporting functions, including the sales and customer service\nstaff that took orders and answered customer inquiries or complaints respectively.  Because the\nnumber of sales and customer service staff could rise from a normal complement of 5 to as many as\n60 (full-time equivalents) before Mother’s Day and other holidays, the company was squeezed for\nspace at peak periods.\nApart from these offices, the company also occupied about 6,000 square feet of nearby\nwarehouse space.  Vases, wreaths, and dried flowers plus other nonperishable items and packaging\nsupplies used by growers were kept there.\nOwades and her colleagues recognized that the sales staff and customer service\nrepresentatives were key components of the entire Calyx & Corolla system.  For these positions they\nhired service-oriented people who demonstrated a real interest in flowers and plants.  Their\nremuneration, which was about average for equivalent positions in the Bay area, was supplemented\nby various contests and incentive programs to reward them for exceptional quantitative and\nqualitative performance.  Senior management maintained a very personal role in training and\nworking with these individuals.\nRelationship with Growers\nShe provided an answer to what growers perceived as a problem.  The industry and\nmarket needs had changed.  Flower importing had greatly increased, as had domestic\nproduction.  But although supply, and thus competition, had increased, consumption hadn’t\nkept up.  What Owades offered was a new—and needed—outlet for selling flowers.  “We had\ntoyed with mail order, and even tested it.  But we’re growers, not marketers” (said a grower).\n—Working Woman Magazine, February 1991\nInitially convincing growers to support Calyx & Corolla was one of Owades’ toughest tasks.\nShe faced the challenge of recruiting growers whose business for generations had\nconsisted of packing 500 or 1,000 stems in large cartons and shipping them by truck across\nthe country.  They were being asked to carefully pack 11 perfect stems in special cartons,\nThis document is authorized for use only by Zhuojun Yi in BUSN 37000 03,02,01 (Autumn 2023) Marketing Strategy at University of Chicago, 2024.\n\n\nCalyx & Corolla\n592-035\n7\npackaged according to stringent aesthetic specifications, and to include a neatly handwritten\ngift card.\n—Working Woman Magazine, February 1991\nShe had, however, become acquainted with several growers through her previous work.\nTogether we worked through the logistics of how we might make Calyx &\nCorolla happen.  We tested flowers for longevity and shipability and packaging.  We\ntested various packing materials that would protect the flowers, keep them cool, keep\nthem wet, maintain a constant temperature, and that would look good and be\nenvironmentally sound.\n—Excerpt from Owades speech\nOwades’ relationships with the growers, combined with a lot of hard work, had resulted in\nthe current network of 30 quality flower suppliers.  For these growers, Calyx & Corolla represented\nan exciting new distribution opportunity that could increase sales and help offset the seasonality of\ntheir business.\nCalyx & Corolla’s growers were located primarily in California, Florida, and Hawaii.\nAlthough most were smaller operations with sales of under $1 million, several had sales of over $5\nmillion.  The largest had sales of $100 million.  The eight largest growers combined supplied 80% of\nCalyx & Corolla’s product.  Sales to the company represented no more than 25% of any one grower’s\nbusiness.  Calyx & Corolla had contracts with the growers that prohibited them from supplying any\nother mail order retailers.\nThe Sunbay Company was typical of the larger growers.  Located about two hours south of\nSan Francisco, this family-operated grower/distributor/wholesaler had sales of $6 million and\ncarried 300 items.  Of those, it grew 90, representing 20% of its revenues.  The balance were flowers\npurchased from other local growers, imported, or purchased from other distant distributors, to\ncomplete the selection they offered local florists.  Calyx & Corolla purchased only locally grown\nflowers from Sunbay.\nIn addition to educating growers to execute their retail responsibilities accurately and\nquickly, Calyx & Corolla provided growers with shipping boxes, cards, labels, vases, etc., and also\nsent them demand forecasts.  The growers, in turn, notified Calyx & Corolla of low stock positions so\nsubstitute suppliers could be utilized or alternate selections offered at or after the time of customer\nordering.  Growers also informed Calyx & Corolla of excess stocks so special offers could be\ncommunicated by supplementary selling when taking incoming orders or by outbound\ntelemarketing.\nTwo or more times daily, depending on the season and the grower, Calyx & Corolla\ntransmitted orders by modem to its growers.  There, the Calyx & Corolla account manager employed\nby the grower would supervise the printing of orders, selection and packing of flowers, handwriting\nof gift messages, and preparation of Federal Express shipping manifests.  Although during the slow\nseasons several people could handle the volume, during peak holidays such as Mother’s Day, up to\n50 workers might be dedicated to fulfilling Calyx & Corolla orders at a particular grower.\nThe price Calyx & Corolla paid to growers was really a combination of two factors.  While\nCalyx & Corolla was a big volume purchaser, it had to reimburse growers for the additional retail\nfunctions which they performed.  As a consequence, Calyx & Corolla paid growers wholesale prices\nplus a surcharge to cover extra labor and other added costs associated with their orders.  Despite this\npremium, Calyx & Corolla was able to achieve gross margins of almost 80% of sales.\nThis document is authorized for use only by Zhuojun Yi in BUSN 37000 03,02,01 (Autumn 2023) Marketing Strategy at University of Chicago, 2024.\n\n\n592-035\nCalyx & Corolla\n8\nOther expenses incurred by Calyx & Corolla included Sales and Marketing and General and\nAdministrative expenses (G&A).  Sales and Marketing expenses mainly consisted of catalog\nproduction and mailing ($.32 per catalog), mailing list rental ($.08 per name), freight out ($9.00 per\norder), and order processing and fulfillment ($5 per order).  G & A included management salaries,\ndepreciation, rent, and office supplies and other miscellaneous expenses.\nRelationship with Federal Express\nOwades knew that her next challenge would be winning an overnight-delivery\nservice to her side.  Ideally, she wanted the industry giant Federal Express Corporation, since,\nOwades says, customers feel it has the most reliable service.  And without quality service,\nCalyx & Corolla would not be able to do business.  But Owades knew that Federal Express\nhad rigid operating procedures, and she would need exceptions for her start-up.\n—Working Woman Magazine, February 1991\nWell, the Calyx & Corolla concept epitomized time-sensitivity.  Here was the\nfirst mail order business in America that would promise exact-day delivery.  The\nmost important question we ask our customers is “When would you like that\ndelivered?”...\nBut, my objective from the start was to establish a relationship where they\nwould work with us—a partnership, together we would create and execute this novel\nmeans of marketing and distributing fresh flowers.\n—Excerpt from Owades speech\nPricing was certainly one important issue, but such subjects as dealing with several seasonal\npeaks and deliveries on freezing days when flower recipients were not home were critical as well.\nCalyx & Corolla used Federal Express exclusively for shipping perishable products. For less-\nperishable products such as dried flowers or vases, it sometimes used United Parcel Service.\nThe relationship with Federal Express had matured over several years.  At first, Federal\nExpress considered Calyx & Corolla a minor account that required special attention.  By 1991,\nhowever, the relationship had vastly improved.  Owades had negotiated a price that varied little by\nweight.  During peak periods, Federal Express now left trailers at the various growers to be filled and\nreplaced when full.  Many delivery drivers had also become aware of Calyx & Corolla and when no\none was at home, would not leave packages to freeze on a cold day.  Frozen flowers did not\nencourage customer repeat orders from Calyx & Corolla.  Saturday deliveries were now offered as\nwell, although Sunday and holiday deliveries were still an unresolved issue.  Since few conventional\nflorists delivered on Sundays and holidays, this service could represent a major competitive\nadvantage for Calyx & Corolla.  Federal Express had even placed computer terminals in the Calyx &\nCorolla offices and at the major growers to allow on-line tracking of shipments.  This equipment\npermitted Calyx & Corolla customer service representatives to respond immediately to customer\ninquiries concerning the whereabouts of an order.\nThe Calyx & Corolla Product Line\nThe Calyx & Corolla catalog included fresh and dried flowers, a selection of plants such as\nbonsai, and a variety of vases and other floral accessories. (See Exhibit 6 for selected pages from\ncatalogs.)  Prices for fresh flowers, including delivery, ranged from $23 for a single stem of protea to\n$60 or $70 dollars for bouquets of several dozen flowers.  In addition, Calyx & Corolla offered vases\nand accessories starting at $12.  The catalog also included continuity programs such as “a Year of\nOrchids” for $450, which included a selection of orchids to be delivered the first week of every\nThis document is authorized for use only by Zhuojun Yi in BUSN 37000 03,02,01 (Autumn 2023) Marketing Strategy at University of Chicago, 2024.\n\n\nCalyx & Corolla\n592-035\n9\nmonth.  Continuity programs comprised a significant portion of Calyx & Corolla sales.  Most single\nitems ranged from $30 to $60.\nAlthough Calyx & Corolla did a substantial everyday business, seasonality was pronounced.\nSummer was slow and holiday spikes big.  (See Exhibit 7 for a graph of monthly sales for the year\nending June 30, 1990.)  Continuity programs were, however, less seasonal, since they were usually\ngifts for the regular delivery of flowers over a number of months.  Calyx & Corolla and its growers\nfavored this business because it helped offset peaks and valleys.\nOwades took an active role in developing the product line and the content of each catalog.\nShe worked closely with Ann Lee and with the growers to create new and exciting bouquets to reflect\nchanging tastes, seasonal variation, or to introduce new products.\nCustomers and Communication\nIf the catalog format offered Calyx & Corolla a leg up on the competition, the flowers\nand arrangements pictured still had to look appealing, “like they belong in your home,” says\nOwades, “or you would be proud to give them as gifts.”  Because flowers are “emotional,” her\npresentation was all the more challenging.  “Poets throughout the ages have known that when\nwords don’t communicate, flowers do.”\nYet no matter how beautiful the photographs, Owades feared that page after page of\nflowers and vases could get boring fast.  So in addition to the cost and color choices in each\nselection’s accompanying copy, she hit on the strategy of weaving in some educational trivia\n(“The curled _flower_ of the petite calla lily is actually a modified leaf”); consumer\ninformation (“Protea stay fresh in water for up to two weeks; after that, they dry\nbeautifully”); and arrangement suggestions (“_Glads_ are especially striking when displayed\nin a tall vase”).\n—Working Woman Magazine, February 1991\nSeventy percent of Calyx & Corolla’s revenues were derived directly from the catalog, while\n20% were derived from corporate clients and promotional “tie-ins.”  The remaining 10% was from\noutgoing telemarketing to previous flower recipients and existing customers.\nThe catalog was the main form of advertising.  Six catalogs were produced every year and\nmailed out under eight to nine covers.  In fiscal 1991 one hundred thousand prior customers received\none catalog per month, which provided 60,000 orders.  Recipients of Calyx & Corolla flowers and\nothers who had called to inquire about Calyx & Corolla flowers, who cumulatively totaled 500,000,\nreceived six catalogs each per year.  The balance of the 12,055,000 catalogs mailed in fiscal 1991 were\nto 7,855,000 rented mailing-list names.  Response rates varied significantly.  Prior customer mailings\nyielded about 5% to 10%, while recipient and rented mailing lists only yielded between 1% and 2%.\nThe recent rise in postal rates added materially to the expense of obtaining the attention of consumers\nwho already received an avalanche of catalogs from other retailers.\nAnn Lee characterized active buyers as those who had purchased at least two times a year,\nalthough she added that some purchased as many as 10 times a year.  Eighty five percent of these\ncustomers were women, mostly ranging in age from 30 to 55.  Most worked and had substantial\ndisposable income.  Sophisticated information systems allowed Calyx & Corolla executives to analyze\nand manipulate the extensive database of customers, recipients, and prospects, allowing them to\nunderstand better their customers and to target their mailings more precisely.  The largest group of\npotential buyers, however, were people who patronized florists or other retailers and were\nunaccustomed to buying anything by mail order.\nThis document is authorized for use only by Zhuojun Yi in BUSN 37000 03,02,01 (Autumn 2023) Marketing Strategy at University of Chicago, 2024.\n\n\n592-035\nCalyx & Corolla\n10\nLee, in addition to her other responsibilities, marketed flowers to corporate clients who used\nthem for reception areas, conference rooms, incentive programs, and customer gift programs.  But by\nfar the greatest proportion of corporate flower purchases were for promotional tie-ins, a segment of\nthe business which management considered a major opportunity for incremental sales, and, more\nimportant, new mail order customers.\nPromotions and incentives, corporate gifts, joint marketing approaches with\nspecific partners and consumer brands—all these offer exciting potential both for\nrevenues, for generating new customers, and for expanding awareness of our service\nand our product.\n—Excerpt from Owades speech\nLee maintained a frequently referred-to list of objectives for proposed promotional programs.\nEach program had to (1) coincide with available resources, (2) fit with the Calyx & Corolla image, (3)\nopen doors for new business opportunities, (4) be profitable, (5) not aggravate seasonal peaks, and (6)\npermit Calyx & Corolla to do a good job.  Several such programs are described below.\nBloomingdale’s used Calyx & Corolla flowers to help promote a selection of vases on\nMother’s Day.  Advertised at Bloomingdale’s expense through a full-page advertisement in the New\nYorker (Exhibit 8) and other upscale regional publications, five dendrobium orchids were offered free\nwith the purchase of any vase.  A point-of-sale display greeted customers at each store, featuring a\nvariety of vases complete with flowers.  The vases were priced between $150 and $1,000.  When\npurchasing a vase, the customer designated the recipient of the bouquet.  Calyx & Corolla provided\nthe flowers, which normally sold in the catalog for $34, at a discount to Bloomingdale’s.\nThe program was a success.  Lee believed that it opened the door for similar opportunities\nwith other upscale retailers.\nAnother tie-in program was with SmithKline Beecham (SB) for a Mother’s Day promotion of\nContac 12-hour caplets for allergy relief.  This program comprised four stages: (1) flowers were sent\nto SB retailers to spruce up stores and to promote Contac; (2) $10 coupons usable for discounts on\npurchase of Calyx & Corolla flowers were offered to store employees to generate excitement; (3)\nnewspaper freestanding insert coupons were placed (see Exhibit 9) to gain exposure to 50 million\nreaders, with coupons for $5 off an order to Calyx & Corolla without a Contac purchase and two\ncoupons at $10 each for discounts on two different flower orders with proof of purchase of Contac  (a\nspecial 800 number with a telemarketing agency was used for Calyx & Corolla orders), and (4) at its\nconclusion, SB purchased and sent bouquets to all distributors and key store personnel for\ncontributing to the program’s success.\nThe program was very profitable.  Three out of four stages performed well, while sales from\nthe consumer stage missed plan.  The experience of creating and implementing this complex multi-\nlevel program was a valuable education and created a foundation for future promotions of this type.\nDiscussions were currently under way with other consumer product manufacturers for future\nprograms.  Other types of programs were being considered as well.  A major mail order retailer was\ncommitted to including several pages of a forthcoming catalog to a selection of Calyx & Corolla\nflowers.  Also under consideration was what was termed an “affinity group promotion.”  This\nprogram would offer discounts on flowers to doctors who were members of the Voluntary Hospitals\nof America (VHA), a trade organization that, among other services, arranged for discounts to doctors\non the purchase of office and other supplies.  Lee had, however, not yet committed Calyx & Corolla to\nthese programs.\nThe last, and considered one of the most important, communications efforts was an active\npublic relations initiative which Owades herself led.  Considerable positive press, including articles in\nThis document is authorized for use only by Zhuojun Yi in BUSN 37000 03,02,01 (Autumn 2023) Marketing Strategy at University of Chicago, 2024.\n\n\nCalyx & Corolla\n592-035\n11\nTime magazine, the Wall Street Journal, and the International Herald Tribune, had been generated, which\nhad resulted in both new catalog and corporate customers (see Exhibit 10 for a partial list of media\nattention to Calyx & Corolla and copies of selected articles).\nCalyx & Corolla’s Ultimate Positioning\nIt was in this context that Owades and other members of the top management team were\nassessing their options for growing the business.  One option was for Calyx & Corolla to capture more\ngift business from traditional florists and possibly even increase total flower sales.  The idea would be\nto sell also to customers who ordinarily did not buy much of anything by mail order.\nOne experiment under consideration was a test advertising campaign prior to at least one\nmajor holiday in the Minneapolis/St. Paul market.  The following table summarizes demographic\ninformation.\nTable A\nMinneapolis/St. Paul TV Market Area—Estimates\nPopulation\n3,610,700\nHouseholds\n1,352,400\nAge\nOver 50\n873,100\n35-49\n737,400\n25-34\n655,600\nLess than 25\n1,344,600\nAfter-tax disposable income\nMedian\n$30,800\n$10-20,000\n17.9%\n20-35\n26.9%\n35-40\n21.9%\n50+\n21.3%\nSource: \nReprinted by permission of Sales Marketing Management.\nCopyright:  Survey of Buying Power Part II, November 13, 1989\nThis campaign was planned, if it lasted 12 months, to at least double the annual FTD\nadvertising budget of 21¢ per household ($24 million ÷ 114,000,000 households in the United States).\nThe second year would taper to one and a half times the FTD budget and remain at parity thereafter.\nFor the test to be successful, Calyx & Corolla management thought that the cost to acquire a new\ncustomer using this medium should not exceed the cost of current methods.  Television advertising\nwould emphasize the freshness and longevity of Calyx & Corolla flowers, with an 800 number to call\nto order either a specifically promoted floral arrangement or the catalog.  Newspaper and magazine\nadvertisements would consist of inserting “mini-catalogs” into Sunday newspaper supplements and\nrun-of-press (ROP) promotions for a $34 seasonal bouquet.  Printing costs for the mini-catalogs would\ncost about 9¢ each.  What sort of response, Calyx & Corolla executives questioned, would they have\nto generate in order to justify expanding the advertising program beyond the test area?  What would\nbe the value of the names generated?  Should Calyx & Corolla time the campaign to coincide with a\nholiday and confront FTD head on, or choose a less-competitive season and promote everyday floral\npurchases?\nThis document is authorized for use only by Zhuojun Yi in BUSN 37000 03,02,01 (Autumn 2023) Marketing Strategy at University of Chicago, 2024.\n\n\n592-035\nCalyx & Corolla\n12\nIn the opinion of Ruth Owades and the other members of the top management team, Calyx &\nCorolla was an exceptionally promising, yet still only partly proven, start-up venture.  Given the\nskills, values, and aspirations of the entrepreneurs and the investors, and the externalities which\nconfronted them, what changes in their current strategy and positioning should Calyx & Corolla\nundertake?  What might be the financial and organizational implications of a much more aggressive\ngrowth strategy, especially if they had to approach external financial markets to fund the advertising\nprogram under consideration?\nThis document is authorized for use only by Zhuojun Yi in BUSN 37000 03,02,01 (Autumn 2023) Marketing Strategy at University of Chicago, 2024.\n\n\nCalyx & Corolla\n592-035\n13\nExhibit 1\nFive-Year Summary P&L Statements and Projections for the Fiscal Years Ending on\nJanuary 31, of the Succeeding Year (in thousands of dollars)\na\nActual FYI\n1988-1989\nActual FY2\n1989-1990\nActual FY3\n1990-1991\nProjected FY4\n1991-1992\nProjected FY5\n1992-1993\nSales\n$  756\n$4,018\n$10,259\n$15,163\n$24,431\nCost of goods sold\n189\n972\n2,452\n3,487\n5,496\nGross margin\n567\n3,046\n7,807\n11,676\n18,935\nSales and marketing\nb\n1,223\n4,466\n7,021\n10,104\n15,375\nGeneral and\nadministrative\nc\n374\n752\n1,213\n1,459\n2,263\nNet profit (loss)\n(1,030)\n(2,172)\n(   427)\n113\n1,297\naNumbers have been disguised\nbSales and Marketing includes catalog production and mailing, list rental, and freight out (at approximately $9 per order).  Order\nprocessing and fulfillment, also included, averaged $5 per order in 1990.\ncGeneral and Administrative includes management salaries, depreciation, rent, and other miscellaneous expenses.\nThis document is authorized for use only by Zhuojun Yi in BUSN 37000 03,02,01 (Autumn 2023) Marketing Strategy at University of Chicago, 2024.\n\n\n592-035\nCalyx & Corolla\n14\nExhibit 2\nLetters to Calyx & Corolla from Customers\nDear Recipient,\nI am 13 years old.  I found your catalog on the table and thought it would be a great idea for\nMother’s Day since I will be on a camping trip.\nSincerely,\nP.S.  Forty dollars cash is enclosed as payment.  Please accept this.\n*  *  *  *  *\nDear Calyx & Corolla:\nIn the beginning of December, I ordered a box of enchantment lilies for my parents to be\ndelivered on December 22nd, just in time for the holidays.\nThe flowers were in bud stage when they arrived, they opened within a few days, and lasted\nfor almost two weeks.\nYour sales help was top notch on the phone when I placed my order, the flowers were\ndelivered on time, in perfect condition, exactly as advertised.  Congratulations on your terrific service\nand product.  I will tell all my friends, and definitely be a repeat customer.\n*  *  *  *  *\nDear Ms. Owades:\nSince I’d long been given to understand that my mother-in-law prefers flowers to remain in\ngardens, I purposely avoided sending cut bouquets.  But I decided to take a chance when your spring\ncatalog arrived and ordered the Pink-Fringed Carnations which she said looked almost like silk and,\nmore to the point, lasted several weeks—much to her delight and astonishment.  [She did mention\nthat her housekeeper changed the water and snipped the ends daily).  And these were sent from your\nshop to Illinois!\nI’m keeping your catalog for future surprises for her.  It’s sooo nice to know that for once\nadvertising lives up to its name, as your brochure and service attest!\nThank you again.\n*  *  *  *  *\n(continued on next page)\nThis document is authorized for use only by Zhuojun Yi in BUSN 37000 03,02,01 (Autumn 2023) Marketing Strategy at University of Chicago, 2024.\n\n\nCalyx & Corolla\n592-035\n15\nExhibit 2\n(continued)\nDear Calyx & Corolla:\nI wish to compliment you on your fine packaging, of my lovely roses, that I received this\nmorning.\nI am saving your address, so that I can use it as the occasion arises that I must send flowers.\nThey “made my day.”  They arrived on my 86th birthday and 66th wedding anniversary.\n*  *  *  *  *\nDear Ms. Owades:\nI live in a remote town in Northern Vermont—population 1,200.  We don’t even have house\nnumbers on our streets.  When I saw the Federal Express truck drive up yesterday, my neighbors and\nI all came out to see who it was for.\nWell, it was for me!  The driver followed the directions perfectly:  Go “Past the Church in the\nSquare, second street on the right, red brick house, third from the end.”  We’d never seen a Federal\nExpress truck on our street before—what excitement!\nI certainly hope we see him again, the orchids are gorgeous!\n*  *  *  *  *\nThis document is authorized for use only by Zhuojun Yi in BUSN 37000 03,02,01 (Autumn 2023) Marketing Strategy at University of Chicago, 2024.\n\n\n592-035\nCalyx & Corolla\n16\nExhibit 3\n1987 Florists’ Transworld Delivery Operating Survey (all responding U.S. shops)\nTypical\nMiddle Range\nIncome Statement ($ of total revenues)\nNet sales from inventory\n93.7%\n90.3\n-\n99.8%\nTotal other operating revenues\n6.3\n0.2\n-\n9.5\nTotal revenues\n100.0%\n100.0\n-\n100.0\nCost of goods sold\n39.4\n33.3\n-\n45.1\nTotal gross profit on operations\n60.6\n54.9\n-\n66.6\nOperating expenses:\nSalaries and wages—owners, partners and officers\n14.6\n6.6\n-\n22.5\nOther salaries, wages, bonuses and commissions\n(excluding owners, partners and officers)\n10.6\n0.0\n-\n19.2\nOccupancy (rent, utilities, maintenance, etc.)\n7.0\n4.0\n-\n9.4\nDelivery expense\n2.6\n1.4\n-\n3.5\nTelephone and transmission\n1.8\n1.0\n-\n2.2\nAdvertising and promotion\n2.8\n1.4\n-\n3.8\nAll wire service fees, dues, commissions\nand expenses\n4.2\n0.9\n-\n5.8\nGeneral and administrative and other\n11.1\n6.1\n-\n14.9\nTotal operating expense\n54.6\n47.3\n-\n61.9\nOperating profit\n6.0\n1.4\n-\n10.5\nNonoperating income/expense\n-0.5\n-0.7\n-\n0.0\nProfit before tax\n5.5\n1.3\n-\n9.8\nProfit after tax\n4.6\n1.2\n-\n7.6\nOrder and Delivery Charge Data\nAverage order size\na\n$25.00\n$20.00\n-\n28.00\nPercentage of shops charging for delivery\n90.9%\nAverage delivery charge (if charged separately)\n$  2.25\n$  2.00\n-\n3.00\nDelivery charge revenues as a % of total\nrevenues (if charged separately)\n3.2%\n2.1\n-\n4.4%\nSource: FTD Retail Florist Operating Survey, 1987.  (The last such survey was in 1987.)\naAverage order size reflects all orders.  Incoming and outgoing wire (FTD) orders represented 40% of member shop holiday orders\nand 33% of nonholiday orders.  The average order for FTD orders was $39 including transmission and delivery service fees.  By\n1990, the average of all orders had grown to over $32.\n(continued on next page)\nThis document is authorized for use only by Zhuojun Yi in BUSN 37000 03,02,01 (Autumn 2023) Marketing Strategy at University of Chicago, 2024.\n\n\nCalyx & Corolla\n592-035\n17\nExhibit 3\n(continued)\nJanuary\nSource: 1990 FTD Member Census\nU.S. FTD Member Shops\n1989 Typical Revenues by Month\n5.7%\n11.0%\n7.5%\n8.6%\n14.0%\n7.0%\n5.4%\n5.6%\n6.0%\n6.7%\n8.1%\n14.3%\nFebruary\nMarch\nApril\nMay\nJune\nJuly\nAugust\nSeptember\nOctober\nNovember\nDecember\nSource: 1990/91 FTD Flower Business Fact Book\nThis document is authorized for use only by Zhuojun Yi in BUSN 37000 03,02,01 (Autumn 2023) Marketing Strategy at University of Chicago, 2024.\n\n\n592-035\nCalyx & Corolla\n18\nExhibit 3\n(continued)\nJanuary\nSource: 1990 FTD Member Census\nU.S. FTD Member Shops\nAverage Advertising Spending by Month\nU.S. FTD Member Shops\nAverage Percentage Advertising Expenditures By Medium\n5.9%\n10.4%\n7.1%\n8.7%\n12.5%\n6.6%\n5.4%\n5.6%\n6.0%\n7.0%\n10.2%\n14.5%\nFebruary\nMarch\nApril\nMay\nJune\nJuly\nAugust\nSeptember\nOctober\nNovember\nDecember\nSource: 1990 & 1985 FTD Member Census\nYellow Pages\nNewspaper\nRadio\nProduct Donations\nDirect Mail\nCalendars\nSchool Newspaper\nChurch Bulletin\nTelevision\nFliers/Handouts\nPens & Giveaways\nOutdoor Billboard\nOther\nTotal Advertising\n35%\n22\n10\n8\n8\n3\n2\n2\n2\n2\n1\n1\n4\n100%\n%\n%\n%\n%\n%\n%\n%\n%\n%\n%\n%\n%\n32%\n32\n13\n–\n7\n5\n–\n–\n2\n–\n–\n1\n8\n100%\n%\n%\n%\n%\n%\n%\n%\n%\n%\n%\n%\n%\nMedium\nAll Shops\n1990\nAll Shops\n1985\nSource: 1990/91 FTD Flower Business Fact Book\nThis document is authorized for use only by Zhuojun Yi in BUSN 37000 03,02,01 (Autumn 2023) Marketing Strategy at University of Chicago, 2024.\n\n\nCalyx & Corolla \n592-035 \n19 \nExhibit 4    Sample Advertisements of FTD \n \nThis document is authorized for use only by Zhuojun Yi in BUSN 37000 03,02,01 (Autumn 2023) Marketing Strategy at University of Chicago, 2024.\n\n\n592-035\nCalyx & Corolla\n20\nExhibit 4\n(continued)\nTELEVISION\nVIDEO\nAUDIO\nOPEN ON ANIMATED SUN RISING ON THE\nHORIZON. THE SUN IS FROWNING AND HAS\nA THERMOMETER IN ITS MOUTH. THE\nCHICKEN SOUP BOWL BOUQUET APPEARS.\n SUPER: CHICKEN SOUP BOWL BOUQUET.\nMUSIC: (UP)\nSINGERS: Send a hug from far away.\nTHE SUN SMILES AS PUFFY CLOUDS FORM\nAND IT BEGINS RAINING. THE PICK-ME-UP\nBOUQUET APPEARS. SUPER: PICK-ME-UP\nBOUQUET.\nBrighten up a rainy day.\nFlowers say what words can’t say.\nCLOUDS CHANGE INTO A STORK CARRYING\n BABY. THE BUNDLE OF JOY BOUQUET\nAPPEARS. SUPER: BUNDLE OF JOY\nBOUQUET\nIt’s as easy as FTD\nTHE ANIMATION BREAKS UP FORMING THE\nTICKLER AS THE TICKLER BOUQUET\nAPPEARS. SUPER: TICKLER BOUQUET\nMERLIN: Whatever you need to say…\nA BALLOON AND CONFETTI MOVE AROUND\nMERLIN AS HE HOLDS THE BIRTHDAY\nPARTY BOUQUET.\nYour FTD Florist can send the right bouquet. And\nremember…\nTHE ANIMATED LOGO SWIRLS PAST MERLIN\nAND ONTO THE SCREEN AS THE THEME “IT’S\nAS EASY AS FTD APPEARS.”\nSINGERS: It’s as easy a FTD.\nRADIO\nSINGER:\nSEND A HUG FROM FAR AWAY\nBRIGHTEN UP A RAINY DAY\nFLOWERS CAN SAY WHAT WORDS CAN’T SAY\nIT’S AS EASY AS FTD\n(MUSIC GOES DOWN UNDER)\nMERLIN:\nNow your FTD Florist has more ways than ever to show you care. Introducing the new\nFTD Affecton Collection. Show your love with the Big Hig Bouquet. Show your\nappreciation with yhe Thanks a Bunch Bouquet. Or say way to go with the Congrats to\nYou Bouquet … It’s never been easier to expres all your affection. Just ask for these\nor any of the other bouquets from the new FTD Affection Collection.\n(MUSIC BACK UP)\nSINGER:\nIT’S AS EASY AS FTD\nAS THOUGHTFUL AS A GIFT CAN BE\nFROM ME TO YOU\nFROM YOU TO ME\nIT’S AS EASY AS FTD\nThis document is authorized for use only by Zhuojun Yi in BUSN 37000 03,02,01 (Autumn 2023) Marketing Strategy at University of Chicago, 2024.\n\n\nCalyx & Corolla\n592-035\n21\nExhibit 5\n1990 North American FTD Monthly Advertising Media Expenditures\nJan\nFeb\nMar\nApr\nMay\nJun\n0.0\n0.0\n0.0\n0.0\n0.4\n14.0\n26.0\n15.7\n20.7\nPercent (%)\n13.0\n8.8\n1.4\nJul\nAug\nSep\nOct\nNov\nDec\nSource: D’Arcy, Masius, Benton & Bowles\n1990 North American  FTD\nMonthly Advertising Media Expenditures\nSource: 1990/91 FTD Flower Business Fact Book\nThis document is authorized for use only by Zhuojun Yi in BUSN 37000 03,02,01 (Autumn 2023) Marketing Strategy at University of Chicago, 2024.\n\n\n592-035 \nCalyx & Corolla \n22 \nExhibit 6    Selected Pages from Catalogs \n \nThis document is authorized for use only by Zhuojun Yi in BUSN 37000 03,02,01 (Autumn 2023) Marketing Strategy at University of Chicago, 2024.\n\n\nCalyx & Corolla \n592-035 \n23 \nExhibit 6    (continued) \n \nThis document is authorized for use only by Zhuojun Yi in BUSN 37000 03,02,01 (Autumn 2023) Marketing Strategy at University of Chicago, 2024.\n\n\n592-035 \nCalyx & Corolla \n24 \nExhibit 6    (continued) \n \nThis document is authorized for use only by Zhuojun Yi in BUSN 37000 03,02,01 (Autumn 2023) Marketing Strategy at University of Chicago, 2024.\n\n\nCalyx & Corolla \n592-035 \n25 \nExhibit 6    (continued) \n \n \nThis document is authorized for use only by Zhuojun Yi in BUSN 37000 03,02,01 (Autumn 2023) Marketing Strategy at University of Chicago, 2024.\n\n\n592-035\nCalyx & Corolla\nExhibit 7\nGraph of Calyx & Corolla Monthly Sales for the Year Ending June 30, 1990\n$1,400\n$1,200\n$1,000\n$800\nMonthly Sales in\nthousands\nJul\nAug\nSep\nOct\nNov\nDec\nJan\nFeb\nMar\nApr\nMay\nJun\n$600\n$400\n$200\n$0\n26\nThis document is authorized for use only by Zhuojun Yi in BUSN 37000 03,02,01 (Autumn 2023) Marketing Strategy at University of Chicago, 2024.\n\n\nCalyx & Corolla\n592-035\n27\n Exhibit 8\nBloomingdale’s Advertisement in the New Yorker\nThis document is authorized for use only by Zhuojun Yi in BUSN 37000 03,02,01 (Autumn 2023) Marketing Strategy at University of Chicago, 2024.\n\n\n592-035 \nCalyx & Corolla \n28 \nExhibit 9    Newspaper Freestanding Insert Coupons of SmithKline Beecham \n \n \nThis document is authorized for use only by Zhuojun Yi in BUSN 37000 03,02,01 (Autumn 2023) Marketing Strategy at University of Chicago, 2024.\n\n\nCalyx & Corolla\n592-035\n29\nExhibit 10\nPartial List of Media Attention to Calyx & Corolla\n“A Scripps Education Goes to Work”\nScripps College Bulletin, Summer 1989\n“Hot People”\nMetropolitan Home, February 1990\n“Fortune People—A Harvard Study\nFortune, November 5, 1990\n“Hearts and Flowers:  The Nosegay Express”\nWall Street Journal, February 14, 1991\n“Just Picked Flowers:  A Fresh Idea Pays”\nInternational Herald Tribune, February 9-10, 1991\n“The Truth About Ruth”\nEntrepreneurial Woman, July/August 1990\n“Stamping Out Mail-Order Misbeliefs”\nLos Angeles Times, May 4, 1990\n“Bouquet of the Month”\nDetroit Free Press, July 1, 1990\n“Floral Catalog Blooms with Exotic, Hard-to-\nFind Greenery”\nRocky Mountain News, January 25, 1990\n“Of Wreaths and Flowers”\nSan Francisco Chronicle, November 29, 1989\n“Flower Power”\nBusiness Week, February 19, 1990\n“Flowers, Fresh from the Growers to You”\nGannett Westchester Newspapers, August 24, 1989\n“What’s Hot:  Flowers, Fresh and Fast”\nSan Jose Mercury News, August 29, 1989\n“Fresh Flowers by Catalog”\nSan Francisco Chronicle, October 18, 1989\n“Catalog Bazaar”\nHarper’s Bazaar, June 1991\n“Business is Blooming”\nCatalog Age, January 1991\n“News Break”\nELLE Magazine, February 1991\n“Profits in Bloom”\nTIME Magazine, February 18, 1991\n“Growing a New Market Niche”\nWorking Woman, February 1991\nTelevision interview\nBusiness Marketplace, ABC TV\nSan Francisco, California\nSeptember 15, 1991\nTelevision interview\nThe Morning Exchange, ABC TV\nCleveland, Ohio\nOctober 9, 1991\nThis document is authorized for use only by Zhuojun Yi in BUSN 37000 03,02,01 (Autumn 2023) Marketing Strategy at University of Chicago, 2024.\n\n\n592-035\nCalyx & Corolla\n30\nExhibit 10\n(continued) - Wall Street Journal article, February 14, 1991.\nHearts and Flowers:  The Nosegay Express\nby Patti Hagan\nHere we are, V-Day 1991, and a flowery mail-order\ncatalog has saved me from the lists of Valentine’s procrastinators.\nOtherwise, I might have made my valentine flower arrangements\non the subway yesterday, humored by a supposed New York Post\nstory blown up on a poster.  “300 LB. QUEENS MAN MOVED BY\n800 FLOWERS,” and bylined Iris Inavase.  “A 300 lb. Queens man,\n52, was reduced to tears today by 800 Flowers,” Ms. Inavase\nwrote.  “To look at him, you would have thought it would take a\nprofessional moving company to budge him.  But all it took was a\n$29.95 floral arrangement sent by 1-800-Flowers, the 24-hour-\nanytime-to-anyone floral delivery service.”  Amusing as I found\nthe teary-eyed Ferdinand, hankie in one hand, 800 Flowers\nnosegay in the other, I’d long since dialed another floral 800 (1-\n800-877-7836) to reach Calyx & Corolla, in California.\nA few months ago a friend had slipped me the catalog,\nfiguring I’d appreciate the botanical name and the upscale\ndifference.  Calyx & Corolla does not ride the subway; C&C uses\nno weepy fat men.  Calyx & Corolla instead runs 32 pages of\nflower pictures, only, on the theory that flowers best sell flowers,\nquite unassisted by kittens, Dalmatians, golden retrievers, Snoopy\nor Snow White and the Seven Dwarfs.  Calyx & Corolla relies on\nflowers whose ancient good design makes them virtually fashion-\nproof:  roses, daffodils, tulips, lilies ($395 for a year of lilies),\norchids ($450 a year), protea.  (“Botanists tell us that protea are\none of the oldest flowers on the earth,” the C&C care card informs.\n“Known to exist in prehistoric times, they survived the trials of\nevolution far better than the dinosaur.”)\nSomething about the catalog reminded me of Eden-\nGardener’s Eden, the upscale gardening catalog-and sure enough\nCalyx & Corolla, which now operates at the cutting edge of the\ncut-flower business, is the latest eureka of floral entrepreneuse\nRuth Owades, the Harvard MBA.  Her alma mater immortalized\nher in a widely taught 1982 Business School case study of her\ntravails, in 1978, in founding Gardener’s Eden (one Jeremiah told\nher:  “Gardening is a blue-collar hobby, it’ll never fly.  There is no\nway in the world that people will buy things for their garden.  If\nthis was such a good idea, dearie, some man would have already\ndone it.”).\nIn 1982 she sold Boston-based Gardener’s Eden to\nWilliams-Sonoma for a cool million but stayed on for five years to\nmanage G. Eden out West.  By 1987, she had noticed an empty\nhorticultural niche in the cut-flower industry.  Her idea was to\nmake possible a fast, fresh, FedExed flower valentine any time of\nthe year by brokering a computer marriage of convenience\nbetween two industries that had heretofore never even been\nengaged:  mail-order catalogs and fresh cut flowers.  Though her\nresearch told her the U.S. cut-flower industry had been growing\nabout 10% a year since the mid-80s, she found “an industry still\nstuck in the ‘50s.”\nShe persuaded 25 flower growers to sign on to her\ncomputer network.  She got them to install computers, modems\nfor talking to the C&C mainframe in San Francisco, fax machines.\nAnd she taught them to cut flowers to order and pack them with\naesthetic TLC.  Roses would be dethorned by hand and travel with\n“ice pillows under their heads.”  Wood excelsior would cushion\ntheir every blow.  “What we go through with gerberas is pretty\namazing,” Ms. Owades admits.  “First of all they are capped with\nnet caps in the fields where they’re grown.  Then because their\nstems tend to be weak, the grower puts [each of] them in thick\nstraws.”\nThen, to deliver the critical Freshness Dividend, Ms.\nOwades prevailed on Federal Express to add Calyx & Corolla’s\nnatural brown boxes to its “brown box business,” and fly the fresh\ncut flowers direct from grower to customer, guaranteeing arrival\non the exact day requested.  FedEx was the crucial link in Ms.\nOwades’s new floral-delivery short-circuit service.  In her catalog\nshe explains that Calyx & Corolla “fresh” means “five to 10 days\nfresher than any other flowers you can buy!”  Her research had\nrevealed that “most flowers that we buy at a florist or certainly at\na Korean grocer are at least seven to 10 days old.”  For her\nbusiness, “I knew that the benefit had to be FRESHNESS.  We cut\nto order.  You receive a flower that was cut 24 to 48 hours\npreviously.  You get the seven to 10 days in your vase, instead of\non a truck or in a distributor’s warehouse.\nThough this is Calyx & Corolla’s biggest day of the\nyear, Americans are floral underconsumers.  Ms. Owades believes\nshe’s still battling the Puritan ethic.  “It’s not only that we’re\npuritanical and feel that we don’t deserve flowers on a regular\nbasis, I also think that we are quite intimidated by flowers.”\nHowever, this may be changing thanks to the puritanical\nAmerican capacity for guilt.  A spring 1990 Gallup Poll,\n“Americans on Gift Giving,” found that for 51% of Americans\n“when feeling guilty, flowers and plants are the likely gift.”  Ms.\nOwades says of subscribers to Calyx & Corolla’s flowers by the\nyear, half-year and quarter:  “That’s for someone who either loves\nflowers or else it’s a gift from someone who feels really guilty\nabout what he did.” And in fact C&C offers a sort of rescue service\nfor the guilty, volunteering on the order form “if you forget or\nhave waited until the last minute...call us, we will do whatever we\ncan to rescue you.”  And then the Calyx & Corolla Plant Doctor is\non call to help survivors baby their plants and flowers.  “People\ncall back and say “it works!  My gardenia is thriving!” Ms.\nOwades notes.  “They’re so happy they want to send him things.\nThey’re all trying to bake him chocolate cakes.  We’ve had to limit\nit.  They can send recipes.”  Others simply write:  “If only your\ncatalog had existed five years ago, my wife wouldn’t have left\nme!”  They send color snapshots of week-old bouquets still fresh.\n“I’m writing to thank you for giving me ‘points’ with my mother-\nin-law,” one California woman wrote.  “I’d long been given to\nunderstand that she prefers flowers to remain in gardens, I\npurposely avoided sending out bouquets.”  But the Pink Fringed\nCarnations bouquet changed everything.\nLast Feb. 14 an irate Philadelphian wrote in the\naccusative:  “Dear Calyx & Corolla:  You’ve ruined my love life!\nHow could you not have shipped the Valentine’s Day tulips to my\ngirlfriend?!”  An apology followed two days later:  “I guess ‘polite\nthank yous’ are no longer a way of life.  But at least I am no longer\nin the doghouse.”\nIn January Ms. Owades sent her flower catalog to war,\naddressing a special message to American servicemen and women\nin the Persian Gulf:  “As Valentine’s Day approaches, we would\nlike to help you remember those that you love back home.\nAlthough the distance to your loved ones may be great, you can\nsurprise them by sending them fresh, beautiful flowers this\nValentine’s Day.”  Wishing them all home soon, she asked,\n“Please identify yourself as a part of Operation Desert Storm in\norder to receive your discount.”  20%.\nOn Jan. 16, the day the U.S. began bombing, Calyx &\nCorolla received a fax from a soldier on duty in Saudia Arabia.  He\nrequested that “Love” cards and bouquets be dispatched to five\nvalentines in five different towns in three states:  Lori, Melissa,\nDee, Beth and Georgeanne.  Once again Calyx & Corolla gave new\nmeaning to the word fresh\nThis article first appeared in The Wall Street Journal of February 14, 1991.  It is reprinted with the permission of Patti Hagan, WSJ\nGardening Columnist..\nThis document is authorized for use only by Zhuojun Yi in BUSN 37000 03,02,01 (Autumn 2023) Marketing Strategy at University of Chicago, 2024.\n\n\nCalyx & Corolla\n592-035\n31\nExhibit 10\n(continued) - International Herald Tribune article, Business/Finance, Saturday-Sunday,\nFebruary 9-10, 1991\nJust-Picked Flowers:  A Fresh Idea Pays\nby Lawrence Malkin\nNEW YORK - Recession may be deepening and war fears\nrising, but the animal spirits in some American businesses\nshow no signs of wilting yet.  Think flowers.  Think\nphone or fax to order them, picked the same day by their\ngrowers.  Then think Federal Express to deliver them\novernight.\nTwo years ago Ruth M. Owades assembled all\nthese disparate elements and created a brand new\nbusiness that is definitely greater than the sum of its parts.\nCalyx & Corolla, as she named her company\nwith floral terminology, grossed $10 million last year and\nis growing by about 10 percent a month against the\nslumping U.S. business tide.\nA staff replying to a toll-free number in San\nFrancisco takes an average of about 25,000 orders a\nmonth, collates them by computer and then forwards\nthem on-line to computers at the company’s contract\ngrowers in California and Florida.\nThe flowers are packed in specially insulated\nboxes and accompanied by the sender’s greetings, done in\ncalligraphy.  At peak times such as Valentine’s Day and\nMother’s Day Federal Express has to send 18-wheel\ntrucks to move the orders from flower farm to airport.\nCurrent specials range from 24 miniature\ncarnations for $32.50 to 25 daffodils for $47, to a dozen\nlong-stemmed roses for $68.  Prices include delivery of\nflowers that are 24 hours old instead of several days old -\nas they would be after going through middlemen in the\nretail delivery chain.\nThe catalogue also offers tropical flowers,\nspecial wreaths, bonsai trees, and even monthly\nsubscriptions for the business person too busy to\nremember.  The trade publication Catalog Age rates Ms.\nOwades one of the best in the mail-order business.\nCalyx & Corolla has sent flowers to celebrities\nincluding Henry Kissinger and Ivana Trump, and one of\nRose Kennedy’s great grandchildren orders one hundred\nflowers from the company for Mrs. Kennedy’s centenary.\nNever one to miss a market opportunity, Ms.\nOwades also shipped catalogs to military personnel in\nSaudi Arabia offering them a 20 percent discount.  A\n_____________________________________\nThe flowers are packed in insulated boxes, with the\nsender’s greetings in calligraphy.  At peak times, 18-wheel\ntrucks move the flowers from farm to airport.\n_____________________________\nscore of orders from troops in Operation Desert Storm\nhave already been dispatched to loved ones at home.\nCalyx & Corolla and Federal Express are\nwaiting at least until more customs barriers come down in\n1992 to consider deliveries within Europe, where the\nlogistics would be even more complex than they were in\nthe United States.\nMs. Owades, 44, had already made her first\nmillion creating a mail-order firm selling high-priced\ngarden \nequipment \nto \nupmarket \nbuyers; \nthe\nimponderables of starting up Gardener’s Eden is now a\ncase study at her alma mater, Harvard Business School.\nShe sold out to a big catalog firm and moved to\nCalifornia to run the business for the new owners.  Her\nhusband, Joseph Owades, who creates special beer recipes\nfor large companies, moved from Boston with her, and\nshe started looking for another start-up as ominous signs\nappeared in the U.S. economy.  “I discovered that\nchocolates, ice cream, beer, and flowers are relatively\nrecession-proof,” Ms. Owades said.\n“People send flowers in recession to apologize\nfor the vacation they have to cancel,” she said.  Corporate\nclients have also boosted their orders to make up for\ncanceling company parties and, Ms. Owades said, to help\nlift the war blues in the office.\nFive years ago, not enough of the elements\nwould have been in place with enough sophistication to\nmake Calyx & Corolla work.  She needed absolutely\nreliable airfreight service, an inexpensive computer\nnetwork, special packaging such as iced bud-holders for\nroses, and, she says, “consumer confidence in the\nreliability of mail order.”\nMost of all, she said, the industry had to have\nconfidence that it could improve on its traditional\nflowers-by-wire delivery system.\nThe single most important link in the chain was\nFederal Express, which had to help design the packaging,\ndevise a special rate structure and install a computer\ntracking system at each of the contract growers.\nDick Metzler, the airfreight company’s U.S.\nmarketing chief, acknowledges that he was reluctant at\nfirst to gamble with an untried business to make the kinds\nof adjustments that Federal Express provides its regular\nclients.\n“But we rolled the dice with Ruth, and we’re\nnot sorry,” he said.  “She has carved out a very clever\nniche for herself, and she’s going to own it for a long time\nto come.”\nWalter Salmon, professor of retailing at\nHarvard Business School, says Calyx & Corolla is a\nperfect example of how to look at an industry as a whole\nand develop a new way of selling.\nIn fact, he’s thinking of making Ms. Owades’s\nsecond business start-up into another case study.\nThis document is authorized for use only by Zhuojun Yi in BUSN 37000 03,02,01 (Autumn 2023) Marketing Strategy at University of Chicago, 2024.","difficulty":"easy","domain":"Single-Document QA","length":"short","question":"In Calyx & Corolla's customer base, which demographic is underestimated and could  lead to greater success for the company in the future?","sub_domain":"Financial"}

Source: https://huggingface.co/datasets/zai-org/LongBench-v2

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