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Lesson 18

But If I Were Trying to Sell You…

“When You Care Enough to Send the Very Best.”

-Hallmark Slogan

Content created by Darin Gerdes. Copyright Great Business Networking and Darin Gerdes.
In 1910, Joyce Clyde Hall began the company that’s known to us today as Hallmark Cards, Inc. He began by selling picture postcards, but after a fire wiped out his inventory in 1915, Hall focused on Valentines and Christmas cards. He also decided to begin producing his own material rather than selling others’ products.
J.C. Hall . . . was intrigued by the word “hallmark” used by goldsmiths as a mark of quality. Mr. Hall liked that it not only said quality, but also included his family name. So, in 1928, the company began marketing its brand by using the Hallmark name on the back of every card.[1]
That year, Hall began to build the brand, advertising in the Ladies Home Journal. By 1932, Hall obtained a licensing agreement with Disney. By 1944, he had created the slogan “When You Care Enough to Send the Very Best.”[2]
Hallmark continued to grow. Television did not come into wide acceptance until after World War II, which is why Franklin Roosevelt held his Fireside Chats by radio. By 1951, Hallmark sponsored a Christmas Eve special, “to thank all the people who bought Hallmark cards,” and this was a raging success.[3]
 
Growth and Acquisition
Hallmark added Keepsake Ornaments to its inventory as a product extension. In the 1970s and following, it also introduced or acquired specialized lines to segment the market:

  • Shoebox Greetings for customers seeking humorous cards
  • Mahogany for African American customers
  • Tree of Life for Jewish customers
  • Hallmark VIDA for Latino customers
  • Dayspring for Christian customers
  • Warm Wishes for cost sensitive customers
  • American Heroes for military families[4]

Each of these divisions targeted different personas and opened up new markets. Dayspring cards often include Bible verses. Tree of Life provides cards for Passover, Hanukkah, Bar Mitzvah (literally “Son of the commandment”) and Bat Mitzvah (“Daughter of the commandment”) coming of age ceremonies for 13-year-olds.  Hallmark VIDA cards include Quinceañera cards (a coming-of-age celebration for 15-year-old girls). Warm wishes cards are available for as little as $.99.
The company also grew through a string of acquisitions. In 1984, Hallmark Cards, Inc. acquired Crayola, the crayon company that produces art supplies and Silly Putty. In 1999, Hallmark acquired Crown Media holdings and it launched the Hallmark channel (2001) and the Hallmark Movie Channel (2003), the leading purveyor of sappy movies. In 2007, it acquired SpiritClips (renamed Feeln in 2014), an online subscription service that, “Offers heartwarming films that move, inspire and delight audiences of all ages.”[5]
 
The Business
Greeting cards have not significantly changed over the last century.  Last year, roughly 7 billion greeting cards were sold and “IBISWorld estimates that the two largest greeting card companies, Hallmark and American Greetings, control more than 90 percent of the market.”[6]
There are two categories of greeting cards. These are every day cards and seasonal cards. The top selling every day card is the birthday card which accounts for over half of the total sold. This is followed by wedding and anniversary, get well and sympathy, and friendship and encouragement cards.[7]
Last year, Hallmark sold roughly 4.7 billion cards and earned revenues north of 4 billion. Christmas is their biggest holiday, accounting for 1.5 billion cards (roughly a third of their business). Many companies are seasonal like the greeting card business. Warren Buffet, owner of Berkshire Hathaway and a major stockholder of See’s Candies once gave a talk to MBA students at the University of Florida, explained how such seasonality affects a business:
I bought [See’s Candies] in 1972. Every year I raise the price on December 26th. I raise it the day after Christmas because we sell a lot at Christmas. In fact, we’ll make sixty million dollars this year. We’ll sell thirty million pounds, make two dollars a pound. Same business. Same formula. Same everything. Sixty million bucks and it still doesn’t take any capital and we’ll make more money ten years from now. But of that sixty million, we make about fifty-five million in the three weeks before Christmas and our company song is ‘What a Friend We Have in Jesus.’[8]
After Christmas, Hallmark’s next biggest days are Valentines Day (144 million cards), Mother’s Day (133 million), and Father’s Day (94 million). All other seasonal occasions pale in comparison.[9]
Women purchase 4 of 5 greeting cards and, “The average price of a greeting card falls between the $2 – $4 price band.”[10] So why are some cards so expensive?
Imagine a world with two varieties of Hallmark card. A cheap card for $0.99 and a premium card for $7.99. That’s a big difference, enough to shock you into rejecting the expensive card as a rip-off. But pricing the typical Hallmark card near $3.99 or $4.99 softens the difference. It makes $7.99 seem relatively affordable.[11]
 
Competition
Nevertheless, this industry is in trouble. According to National Public Radio, last year Hallmark laid off 570 jobs in its Enfield Connecticut distribution centers, and total full time workers have fallen “from almost 22,000 full timers to about 10,500 worldwide” over the last five years.[12]
While “nine out of every ten households buy greeting cards each year [and] the average households buys 30 individual greeting cards a year,”[13] Hallmark is trying to compete in the digital age where Facebook reminds you to say Happy Birthday to your friends for free.
 
 
What Would You Do?
Here’s the scenario. You work at Hallmark as an account executive. The senior executives have charged your department with creating the next Mother’s Day—a holiday that demands that we send a card to prove that we really do care. You begin to brainstorm with your team.
You could make a big deal of Arbor Day. After all, environmentalism has become trendy over the last few decades.
While there are eighty-five million mothers in the U.S., according to Pew Research, statistically, this market segment is in decline (modern mothers expect to have and average of 1.9 children today as opposed to 3.7 children in 1960)[14]. However, according to the U.S. Forestry Service, there are nearly 300 billion trees in the U.S.[15] (3.04 Trillion in the world—a figure 3 times of that which we once thought).[16]
However, you decide against Arbor Day for a couple of reasons. First, people do not send cards to trees, though they may send the cards to other Arbor Day enthusiasts. Second, while there are many more trees than mothers, trees do not create the same intense level of commitment as mothers. Yes, we need trees for oxygen, but most of us do not have strong emotional attachments to particular trees. Third, it would be a cruel irony to cut down trees to create cards to send to those who care about trees.
So Arbor Day is off the table. As you search for new ideas, you stumble over Thank Your Mentor Day, “a highlight of National Mentoring Month.”[17] Mentor Day has it all. You think about the warm feelings of appreciation that teachers and managers will receive, but that is just the beginning.
It is January 21st, perfectly situated between Christmas and Valentines Day. It is not just a day, but a day couched in “National Mentoring Month.”  There is tremendous opportunity for growth with 159 million Americans in the labor force, roughly double the number of mothers.[18] Any given individual can have multiple mentors, and this pool can be doubled if we can encourage the mentors to send cards to their former protégés just to reconnect (while it is just weird for mothers to send Mother’s Day cards to their sons). And, unlike the trees, there is often an intense loyalty between mentors and protégés. Since few people know about the holiday, the opportunity appears endless.
You float your idea to the corporate office. They love it and they want you to run a test in your home media market. Now you have a lot of decisions to make.
 
Actionable items:
 
What is your first step in the process of making Thank Your Mentor Day a huge success?
 
Can you describe the 4 Ps for the Thank Your Mentor Day greeting card business? Describe your product, price, place, and promotion?
Product:
 
Price:
 
Place:
 
Promotion:

What specific messages will you send about Mentor Day to customers at different stages in the marketing process?
Awareness:
 
Consideration:
Purchase:
You probably have a few similar marketing personas. Describe each of them below. This stage will give you clarity as you decide on your marketing approach.
Marketing Persona #1:
Marketing Persona #2:
 
Marketing Persona #3:
 
What marketing message do you wish to communicate? What are the benefits and features of your cards? Which do you focus on and why?
How do you plan to use:

  • Public relations
  • Advertising
  • Direct sales

 
Finally, it’s time to consider how you plan to advertise. Suppose your marketing budget is limited to about half of what you would really need. This means you must prioritize what mediums you will use to communicate. Your choices include:

  • Billboards
  • Celebrity endorsements
  • Coupons
  • Direct mail
  • Educational campaigns
  • Event sponsorships
  • Internet
  • Promotional products
  • Press conferences
  • Radio
  • Sponsorships
  • Television
  • Other

 
What is the best use of your time and treasure to promote Mentor Day?
 
End Notes
[1] Hallmark history and timeline (n.d.). Hallmark Cards, Inc. Retrieved from http://corporate.hallmark.com/Company/Early-Innovation-1910s-30s
[2] Hallmark history and timeline (n.d.). Hallmark Cards, Inc. Retrieved from http://corporate.hallmark.com/company/Building-Brand-1930s-50s
[3] Hallmark history and timeline (n.d.). Hallmark Cards, Inc. Retrieved from http://corporate.hallmark.com/company/Building-Brand-1930s-50s
[4] Hallmark history and timeline (n.d.). Hallmark Cards, Inc. Retrieved from http://corporate.hallmark.com/company/Growing-Expanding-1960s-80s
[5] Hallmark’s major subsidiaries & related businesses. (n.d.). Hallmark Cards, Inc. Retrieved from http://corporate.hallmark.com/Company/Hallmarks-Major-Subsidiaries
[6] Thompson, D. (2013). Why are greeting cards so expensive. The Atlantic. Retrieved from http://www.theatlantic.com/business/archive/2013/02/why-are-greeting-cards-so-expensive/273086/
[7] Pullen, K. (2016, Jan 4). Greeting card industry facts and figures. Rubberstamping.about.com. Retrieved from http://rubberstamping.about.com/od/opportunities/a/GreetingCardFactsandFigures.htm
[8] Buffett, W. (2007). Warren Buffett MBA talk. University of Florida.  Retrieved from https://www.youtube.com/watch?v=caFD7bwkuEc
[9] Hallmark Card Statistics. (2016). Statistic Brain. Retrieved from http://www.statisticbrain.com/hallmark-card-statistics/
[10] Pullen, K. (2016, Jan 4). Greeting card industry facts and figures. Rubberstamping.about.com. Retrieved from http://rubberstamping.about.com/od/opportunities/a/GreetingCardFactsandFigures.htm
[11] Thompson, D. (2013). Why are greeting cards so expensive. The Atlantic. Retrieved from http://www.theatlantic.com/business/archive/2013/02/why-are-greeting-cards-so-expensive/273086/
[12] All Things Considered (2015, July 8). To survive, the greeting card industry will have to get creative. National Public Radio. Retrieved from http://www.npr.org/2015/07/08/420966617/to-survive-the-greeting-card-industry-will-have-to-get-creative
[13] Pullen, K. (2016, Jan 4). Greeting card industry facts and figures. Rubberstamping.about.com. Retrieved from http://rubberstamping.about.com/od/opportunities/a/GreetingCardFactsandFigures.htm
[14] Caumont, A. & Wang, W. (2014). 5 questions (and answers) about American moms today. Pew Research Center. Retrieved from http://www.pewresearch.org/fact-tank/2014/05/09/5-questions-and-answers-about-american-moms-today/
[15] Trend Data (n.d.) USDA Forestry Service. Retrieved from http://www.fia.fs.fed.us/slides/major-trends.pdf
[16] Crowther, T., Glick, H., Covey, K., Bettigole, C., Maynard, D., Thomas, S., Smith, J., Hintler, G., Duguid, M., Amatulli, G., Tuanmu, M., Jetz, W., Salas, C., Stam, C., Piotto, D., Tavani, R., Green, S., Bruce, G., Williams, S., Wiser, S., Huber, M., Hengeveld, G., Nabuurs, G., Tikhonova, E., Borchardt, P., Li, C., Powrie, L., Fischer, M., Hemp, A., Homeier, J., Cho, P., Vibrans, A., Umunay, P., Piao, S., Rowe, C., Ashton, M., Crane, P., & Bradford, M. (2015). Mapping tree density at a global scale. Nature, 525(7568), 201-213. doi:10.1038/nature14967
[17] Thank Your Mentor Day (2016). National Mentoring Month. Retrieved from http://www.nationalmentoringmonth.org/get_involved/thankyourmentorday/
[18] The Employment Situation – April 2016. (2016). Bureau of Labor Statistics. Retrieved from http://www.bls.gov/news.release/pdf/empsit.pdf