Hallmark Cards is celebrating its 100th anniversary this year. What started as a picture postcard business in 1910 in Kansas City, Missouri has grown into a multi-billion dollar a year industry spanning across various media outlets. From cards to gift wrap to those heartfelt Hallmark Channel movies, the name, the brand, and the message has remained the same. The company’s continued dedication to being a private, family enterprise that seeks to connect people around the world has kept it at the top of its market.
Stats:
• Founded by J.C. Hall in 1910
• Led today by Donald C. Hall and his sons, Donald J. Hall and David E. Hall
• Headquarters: Kansas City, Missouri
Strengths:
• Controls 50% of the greeting card and gift wrapping market.
• In 2008 reported revenue at $4.3 billion.
o The greeting card industry, as a whole, generates around $7.5 billion total.
• Numerous stores around the country – 3,300 Gold Crown Stores AND featured in 41,500 retail outlets.
• Wealth of product availability:
o 65,000 products available at once.
o 18,000 new and redesigned greeting cards each year.
• Private, family owned business – produces a sense of community among employees. In 2009, was named one of the best places to work by the Human Rights Campaign’s “Corporate Equality Index” and a Working Mother 100 Best Companies by Working Mother magazine.
• Produces for a specialized market - there will always be holidays, birthdays, and occasions to celebrate/mourn, and if there’s not, Hallmark will invent some.
o 1.8 billion cards are sold at Christmas time alone (St. Patrick’s Day, the lowest selling holiday, still sells 12 million cards).
o Offers a variety of products within this niche market: greeting cards, paper party supplies, gifts and wrapping paper, ornaments and decorative home items, memory-keeping picture frames, albums and scrapbooks, e-cards, mobile greetings and customized photo cards, and a cable television channel. of products in a
• Various Rewards Programs (i.e. Gold Crown Rewards) work as incentives for customers.
• Good Management – adapting to a changing market.
o Produces a line of e-cards, mobile greetings, and Webcam greetings (3D Animated greeting cards) –
e-card industry accounts for around $300 million in revenue.
Just released App for iPhone.
Online shopping and mailing system for paper and electronic cards.
Price packages for online services.
Ability to personalize cards purchased online.
o Artists use innovative technology (3-D laser cutting and computer software) in addition to traditional art-making techniques.
o Utilizes Facebook and Twitter to connect with consumers.
• Hallmark Channel
• Hallmark School Store – operated in conjunction with Alvirne High School in New Hampshire; run entirely by Marketing I & II students.
• Recently announced extended deal with NBC Universal.
o Incorporates film and television properties with Hallmark Cards products – the partnership, “gives millions of consumers new ways to celebrate meaningful occasions and include their favorite television shows and movies,” (corporate.hallmark.com).
• Upstanding “citizen” company: Hallmark presents itself favorably; induces high public opinion through:
o Leaders in environmental responsibility.
Since 1940 has used recycled paper; in 1978 established company-wide van-pooling transportation initiative; since 1990’s reduced solid waste by 70% and hazardous waste by 90%; distribution center in Connecticut has zero percent waste program; surplus products go to families in need. In addition, company has a “rain garden” to control drainage and soil erosion. Excess food is donated to local food banks, food waste is turned into high-quality soil additive; Energy Star Designation company status.
o Contributions to various charities – in 2008 contributed over $30 million worth of goods and services to benefit Global AIDS Alliance, Susan G. Komen For the Cure, and UNICEF.
o Local Contributions – Hallmark is dedicated to directing most of their charitable programs at the local level – programs for children (Kaleidoscope) and Volunteer Involvement Pays (VIP) program where employees volunteer at least 25 hrs per 6 months to local non-profits.
• Microsoft Greetings Workshop
o Software for creating and printing cards – Partnership with Microsoft.
• International Business
o Headquarters located in Bradford, England and founded in 1966.
UK greeting card business is worth $1.7 billion annually.
o Products include mostly greeting cards and gift wrap.
o Featured in 30 languages and distributed in more than 100 countries.
o International Subsidiaries:
Asia Pacific – Hallmark Cards Australia, Ltd.; Hallmark Cards New Zealand, Ltd.; Nihon Hallmark K.K. (Tokyo, Japan)
Continental Europe – Hallmark Belgium N.V.; Hallmark Cards Netherlands, B.V.
United Kingdom – Hallmark Cards PLC (includes Hallmark Cards UK, Tigerprint, and Hambledon Studios)
• Numerous U.S. Subsidiaries – this showcases Hallmark’s extreme command of their market and ability to reach a large variety of consumers.
o Crayola and Crayola brand products– acquired in 1984.
o Crown Center – a shopping, dining, and entertainment complex that attracts 5 million visitors annually.
o Day Spring Cards – started in 1999. A lead supplier of Christian greeting cards/gifts. *Sold in more than 3,000 retail stores and available in 60 countries.
o Hallmark Business Solutions – started in 2009, a business to business division specializes in company relations and growth. Includes Hallmark Insights (2000) and Irresistible Ink (1998), Hallmark Business Expressions, and Hallmark Tributes. These lines focus on the development of personalize business and corporate cards, *incentive and rewards programs for retailers and businesses, including promotional products; and direct mail personalization and handwriting services.
o Halls Merchandising Inc. (1913) – Two specialty department stores.
o *Litho-Crome Company (1979) – printing company specializing in high-quality color separation and lithography. Provides printing capabilities for art reproduction, greeting cards, and other consumer products. Additional strength as Hallmark does not need to outsource their means of production.
o Sunrise Greetings (1998) – line of greeting cards distributed throughout the U.S. and Canada.
o William Arthur (1997) – specializes in high-end, luxury stationary. Includes lines designed by Vera Wang and Rita Renning.
Weaknesses:
• Specializes in what is seen as a very traditional, “old” practice – giving greeting cards.
• Recession
o Spending money on greeting cards, gift wrapping, home décor, etc. is a luxury and not a necessity. Therefore, sales are slowing in the current economy.
o In 2008, Hallmark Cards had to layoff 550 – 750 employees.
o Revenue fell 2% from 2007 to 2008.
o Last week, Hallmark was forced to close down a plant in St. Joseph, NC.
• Print Business
o Like any print business these days, sales are slowing. Consumers are turning towards the Internet and electronic/new media forms for sending greetings.
o Printing is a more expensive practice.
o In-house, traditional artists produce products that may cost more to produce. Unlike electronic services which are cheaper to make and distribute.
Opportunities:
• Expansion of online services.
o Hallmark is definitely trying to take advantage of new media and the e-card craze. However, they still charge for e-cards and mobile greetings ($0.99). Several web services offer free sending of online greetings.
Possible Solution – offering combination packages. Set price for a mix of mobile, e-card, and paper product services – consumer choice.
• Expanding international business – especially in the United Kingdom. The greeting card industry earns more than coffee and tea combined. It is the most successful region for the greeting card business in the world.
• Mobile technology
• Appeal to a younger demographic
o A new study of the greeting card market found that young adults aged 25 -34 spend the most (41% more than buyers aged 35-44); however, this demographic is also actively seeking alternatives via Facebook, Twitter, MySpace, and other social networking media.
• Develop partnerships with art departments at universities.
Threats:
• Lawsuits – owning content.
o Hallmark was sued by Paris Hilton and Neil Armstrong for copyright infringement.
• Recession – Layoffs, slowing sales.
• Facebook, Twitter, MySpace, & other social media.
o New media and electronic greetings are Hallmark’s biggest threat as they provide a cheap and convenient alternative.
• Other card companies:
o American Greetings, etc.
American Greetings established AGI (American Greetings Interactive – a print-at-home greeting card service).
o Specialty boutiques and high-end/handmade card lines (usually cost more and seen as more “artistic”).
• E-cards
• Elf yourself
o Office Max’s holiday greeting.
Works Cited
Hallmark Cards Official Web Site
Hallmark Corporate Official Web Site
Answers.com: Reference Answers
Regan, K. “E-card Makers Find Senders Willing to Pay” E-commerce Times. 9 Dec 2005
“Is Hallmark’s move into personalized card business driven by strategy or are they just late to the party?” Head Blog: Head First Advertising and Design. 5 Feb 2010.
Kansas City.com “Hallmark Cards To Cut Up to 750 Jobs” The Star 14 Apr 2009
Kansas City.com “Distribution Plant Used by Hallmark Closing in St. Joseph” The Star 17 Feb 2010
Wikipedia.org
