Academic journal article Journal of the International Academy for Case Studies

Diana's Floral Studio: A New Marketing Arrangement

Academic journal article Journal of the International Academy for Case Studies

Diana's Floral Studio: A New Marketing Arrangement

Article excerpt

CASE DESCRIPTION

The primary subject matter of this case is differentiation of products and services in a relatively competitive market during challenging economic periods. In particular, this case highlights how business owners identified a specific market segment on which to focus their efforts without incurring additional marketing costs in traditional media channels. This case has a difficulty level of three and up, appropriate for junior level and beyond. The case is designed to be taught in two to three class hours in a management, strategic marketing management, or an entrepreneurship course, and is expected to require about three hours of outside preparation for students, consisting mainly of reading the case and familiarizing themselves with the business environments on the U.S. territory of Guam in the Western Pacific region.

CASE SYNOPSIS

The case is about Diana's Floral Studio, a small family-owned business on Guam that today provides floral arrangements and consulting services for the island's functions and events. The case traces the business through the early years of Diana's Floral Studio as a small flower shop to a business that specializes in floral design services. The business had undergone a transformation in focus and strategy in response to trends in the marketplace resulting from macroeconomic conditions affecting Guam's tourism dependent economy. This reorientation of its business operation also resulted in a change from originally serving mainly a clientele of individuals to entering into contractual agreements for business services with larger clients like the island's major hotels. As such, Diana's Floral Studio has changed its marketing strategy from utilizing traditional media channels to reach individual customers to one that relies on word of mouth advertising from existing large clients. With Guam's highly transient population and the impending military build-up, the business owners must continue exploring new marketing strategies to maintain its position as one of the island's leading floral design studios.

BACKGROUND

Diana's Floral Studio, also known as Diana's Florists, began as a small flower shop retailing fresh flowers and floral accessories on Guam. They catered to a limited customer base with average annual revenues of approximately $18,000. The business began operating in 1991 at its first location, which was out of a retail store with a small window space totaling approximately 1100 square feet. Slowly, the small studio blossomed and made a name for itself among its competitors, many of which were much larger in size of operation and volume of business. The business eventually moved to a second location consisting of a space where there was a large store front studio section displaying various floral arrangements, accessories, and props, staged for prospective clients to preview. In the new location, Diana's had a very retail-like atmosphere in the early years of operation. In the early 2000s, the floral studio moved to a third location where it currently operates, and along the way adopted a new business strategy. This new business strategy led to a change in their marketing strategy, from one that mainly targeted retail sales with individual customers to one that focused on selling floral design services to large clients like the island's well-known hotels. At this location Diana's Floral Studio utilizes 2,500 sq ft, which is one-third of a shared warehouse building located in an industrial area in the central Guam village of Tamuning. These changes were made in response to changes in Guam's economy.

From the early 1990's, Guam experienced severe hardships in the economy. Some of these came in the form of disasters, such as Typhoon Chata'an in July 2002 and Typhoon Pongsana in December 2002, which was recorded as the strongest typhoon to hit Guam in the past century. Even before these two major typhoons, Guam was just in the process of rebuilding and recovering after being devastated by Typhoon Paka in 1997. …

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