Chapter 28 Question 023

Why is Hallmark Cards giving out free non-holiday cards? (Eric Gibson) Hallmark Greeting Cards is offering free non-holiday cards as part of its latest promotion.These cards feature simple messages like sorry, I miss you and good luck, and are prominently displayed on a custom stand.There are huge posters on the shelves, and free greeting cards!Limit two per customer.These greeting cards feature beautiful graphics and are printed on high-quality card stock.They are not stock and have not been soiled, dog-eared, or otherwise visibly damaged.And, consumers get it for free without having to buy anything else.Why would Hallmark do this?

Greeting cards are extremely profitable products.Although the marginal production cost of each greeting card is only a few cents, the selling price is usually several dollars.High profits help maintain overhead costs for retail stores that sell greeting cards.In addition to birthday cards, greeting card sales are focused on various holidays throughout the year, and many of the best-selling cards are highly seasonal, such as Christmas and graduation cards.As a result, Hallmark retail stores are sometimes packed, but mostly empty.As a result, the company tried to find other ways to sell greeting cards during the off-season to increase profits.

The market for non-holiday cards had not yet been established when the company showed off the free cards.Most customers buy greeting cards for birthdays or other special occasions.If a company sells non-holiday cards, no one might even notice they're there.Displaying your free greeting cards prominently can entice shoppers to take them home.Hallmark knew that if even a handful of shoppers liked the cards, it would drive the market in the long run.There is no doubt that Hallmark is now selling non-holiday cards for about the same price as traditional cards.For a seasonal industry that sells high-margin products, the promotion was a resounding success.