Leadership and Strategic Management of Hallmark - Essay Example

Hallmark had started as a small family business but now in its 100th year, the different generations that have handled the business have been innovating what and how they sell. Hallmark products are available in 100 countries in more than 30 different languages. While their products can be found at 43,000 retail outlets domestically and online, they have also diversified into the magazine and television sector.1 They have concentrated on building the Hallmark brand which is the reason the Hallmark Magazine and Hallmark Television Channel have met with equal success. Thus Hallmark demonstrates two distinctive trends in the industry – building on brand image and thriving on innovation. Brand image is the latest method through which companies are trying to retain loyal customers. Hence brand image is a vital marketing activity. A brand is not merely a name or a logo or a slogan. It is the customers’ perception of the stimulus when the brand is presented.2 Three important guiding principles for developing strong labour-intensive brands are orchestrating the clues, connecting emotionally and internalizing the brand. Hallmark has not only tried to build its brand image but also used its brand to diversify into other sectors. Very recently, Working Mothers magazine has named Hallmark Cards Inc as one of the 2008 Working Mother 100 best companies. Hallmark has thrived on being a family-friendly company and supporting families have been a vital part of its culture. This is the reason the brand image of Hallmark has enhanced and they utilized the opportunity to grow. According to Working Mothers magazine, Hallmark’s HR policies are employee-friendly which makes them employers of choice. Hallmark employs renowned writers and editors, artists, art directors and other experts that help in giving the best to the people. Organizations become more innovative by capitalizing on their employees’ ability to innovate.3 This is something that can give the competitors something to worry about because Hallmark scores high on people management. A counter trend that can be found in the Hallmark products is the use of celebrity Humor cards. They use parodies of celebrities and politicians for their cards and they claim that they are not violating the right of these public figures. At times they do take permission from the celebrity concerned and they also pay royalties for it. Nevertheless, some of their humor greeting cards are parodies that comment on news and gossip surrounding these celebrities and this at some point of time will rebound negatively. It may not always be accepted by the people or the customers in the right way. Moreover, the general people are not interested whether the company has taken permission or paid royalties. It is not in good taste and may give the company a negative image or dilute their brand image. Brand association should be with the right people or product and the right brand association can enable a brand to develop a rich and clear brand identity.4 Emotional value helps the brand to stand above others but if Hallmark uses parodies of celebrities they would be diluting the brand image by negative association. Hallmark should refrain from such a strategy as they could lose valuable customers as customers are sensitive to such issues. New product innovation is another area which keeps Hallmark ahead of its competitors. Radical or discontinuous new products play a significant role in building competitive advantage and contribute to a company’s growth and profitability.5Very recently hallmark has launched the adhesive gift wrap which is a very useful and thoughtful product. Not only have they launched the product, they also provide a demo on their website which helps the consumers understand the value of the product. To achieve success in new product development and introduction in the market, a company has to first spend in the development process.6 They should be able to create specific consumer expectations and provoke the action to buy the product. Hallmark invests in people who are behind the innovative products. Hallmark also creates awareness of their products through the website. Hallmark has also brought earth-friendly cards, which is again an innovative example of Hallmark’s use of alternative paper resources. Hallmark has announced partnership with Twentieth Century Fox Licensing & Merchandising that will provide Hallmark access to sound clips and iconography from some of the world’s most popular and beloved television, film, animation, and sports properties. This enables Hallmark to utilize more than 50 years of Fox history to adopt across a range of social expression products. They can now bring out cards with motion and stereo sound. This agreement gives Hallmark a competitive edge as they can now create so many different ways to allow people to celebrate occasions. This also means that Hallmark has to adopt new strategies to market their products. They must now be able to effectively communicate this message to its target audience. Customers design the products better themselves, and every business has such customers.7 This is known as ‘crowdsourcing’ in which the companies get unpaid or low-paid amateurs to design products or create content. Hallmark has very innovatively done this through its first holiday greeting card creation competition, “YourHoliday.” The consumers have been encouraged to submit innovative designs appropriate for holiday sending and these will be available both as flat cards or folded cards online. They have been able to tap into the consumers’ minds and passions to co-create products, solutions, communications and experiences.8 This is again a part of the innovative trend that Hallmark is pursuing. The trends at Hallmark clearly show that they have moved from product to corporate branding. This becomes necessary as customers become more sophisticated and markets become more complex. This requires innovation on the part of the employees. Leaders play a vital role in enabling and enhancing innovative behavior of the employees.9 Leaders are a powerful source for triggering innovative behavior among the employees. The company is also engaged in corporate social responsibility. All of the trends at Hallmark will affect their business strategy and the competitors have a lot to learn from them. Association with some organization or association of repute is something that competitors need to recognize. This strategy provides a competitive edge to the organization. At the same time, all channels and retail stores that carry hallmark products also benefit as they have association with a positive brand image or brand identity. Another strategy of Hallmark that gives them a competitive edge is their Hallmark Television Channel. This is again what their competitors do not have. Hallmark has so far been successful in building their brand as they are noticed, remembered, have managed to change perceptions, reinforce attitudes, and have created deep customer relationships.10 They have also been successful in differentiating themselves from their competitors. Now Hallmark needs to track its brand against competition. This will enable the company to assess the effect of its strategy against each of the innovation that it has introduced in recent times. They especially need to know how their humor cards with parodies are being accepted by people. They need to measure the brand loyalty because that is what keeps a customer attached to a brand. The company website has described all its offers and operations. They have given descriptive news of all that has been happening in detail for customers to remain attached to the brand. There is a sense of pride evident from their descriptions and the innovation that they have achieved. Nothing lacking has been perceived on this website. References: Berry, L. L. & Lampo, S. S. (2004). Branding Labor-intensive services. Business Strategy Review, Vol. 15 Issue 1 Boutin, P. (2006). Crowdsourcing: Consumers as Creators. [Online] Available at: http://www.businessweek.com/innovate/content/jul2006/id20060713_755844.htm [accessed 12 October 2008] Corporate (2007). Innovation in the 21st Century & Beyond. [Online] Available at: http://corporate.hallmark.com/history/Innovation-21st-Century [accessed 12 October 2008] Ghodeswar, B. M. (2008). Building brand identity in competitive markets: a conceptual model. Journal of Product & Brand Management 17/1 (2008) 4–12 Jong, J. P. J. & Hartog, D. N. D. (2008). How leaders influence employees’ innovative behaviour. European Journal of Innovation Management Vol. 10 No. 1, 2007 pp. 41-6 McDonald, S. S. (1990). BRAND EQUITY: WORKING TOWARD A DISCIPLINED METHODOLOGY FOR MEASUREMENT. [Online] Available at: http://www.nationalanalysts.com/pdfs/brand-equity.pdf [accessed 12 October 2008] Palmer, D. (2007). Harnessing Consumer Inspiration in New Product Development. [Online] Available at: http://www.innovation-point.com/Harnessing%20Consumer%20Inspiration%20in%20New%20Product%20Development.pdf [accessed 12 October 2008] Veryzer, R. W. (1998). Discontinuos Development and the New Product Development Process, J PROD INNOV MANAG, 15:304:321 Read More