Background C&c

BACKGROUND

? C&C entered the American flower marketing the late 1980s as a pioneer in its industry, introducing direct-mail flower selling. In the 2.5 years it has been in business, C&C has grown to $10 million in sales.

? Ruth Owades leveraged her team's strengths: in-depth knowledge of the mail-order industry, just-in-time supply chain management and catalogue-based sales model, to generate a clear customer value proposition by improving delivery lead times and cutting out the many levels of middlemen in traditional channels. This gave them the advantage of fresher flowers at similar prices to competitors. 80% of C&C's sales stemmed from 6 catalogues per year, including outgoing telesales.

? The majority of flower sales in 1990 were through physical retail florists, who offered "service-oriented" customisation for weddings, funerals etc and delivered to the final consumer either through wire services such as FTD or within a small radius of their store.

? Relative to FTD, C&C sells a larger proportion of their annual sales during the Mothers Day month and Christmas holidays, but relatively less during Valentine's Day and summer months. Without further data, we can postulate that this comes from a diminished presence, especially with men (during Valentines Day), who in principle seem less likely to receive and keep flower catalogues. A brief analysis suggests that additive targeting of these segments (therefore normalising of C&C's curve towards the industry norm) could create an additional 7% of immediate sales revenue.

? Corporate clients and promotional tie-ins, a dynamic new market, account for 20% of C&C's sales. From available data, it appears that this market is relatively untapped, and offers significant growth potential.

? Given the attractiveness of the flower market at this time (sustained 7%