Managing Profitable Growth Recommendation : Increase Internet advertising. There are several reasons to support It. 1 . Less Cost, more tailored communication with customers In case of the catalog, the acquisition cost of new customer Is too expensive. This makes new customers unprofitable. (see table 1) Instead of the catalog, the company can send email directly to their target customer with less expense. The company already have a web page, so the firm can use the system without huge investment.
Also, if the company makes use of the internet more, the firm can gather customer data more efficiently. So the company can increase the ability to track the behavior of individual customer. This enable the firm not only to tailor communication with the customers, but also to build a long-term relationship with the customers compared to mass-media marketing and catalog. Eventually, it will lower the acquisition cost of the current and new customers and increase retention rate and response rate, the taxation which makes the customer more profitable In terms of the life time value. . Concentrate on the growth of the potential customer. As the Infrastructure of the Internet Improves, the customer who purchase the product through internet will increase. This change of business environment would be a good opportunity for the company. While the competitors focus on mass-media marketing, the company can concentrate their budget on the target customers who have a high potential growth. With low advertising cost per customer and high customers’ satisfaction with tailored communication, the company can differentiate itself from the other competitors. . Make the customers more inelastic to price. The products of Calyx are fresher than that of the competitors. This Is the one of the differentiated factor of the company. And also, using online could be one of the differentiated factor of the company. As mentioned above, with fluent data of the customers and tailored communication, the company can raise the customers’ satisfaction. From these, Calyx can create customer loyalty.
The loyalty is not from the lower price, but from the differentiation from the other competitors. This makes the customers more inelastic to price. 4. Enlarge the customer base by cross selling of the other business units’ products By integrating the web pages with other business units or making bundle packages, the flower business can enlarge the customer base, which consists of professional women mostly. From this, the company can alma at market share expansion.
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