486 ENTREPRENEURSHIP CASEcards to market. As part of its emphasis on
customer service, American Greetings estab-
lished its Retail Creative Services
Department. This unit emphasized working
with customers to create seasonal displays
designed to boost store traffic. American
Greetings also formed its Information
Services Department to develop software to
analyze retailers’ sales patterns and track in-
ventories for many different products. Ap-
parently these innovations paid off; sales of
American Greetings cards and related prod-
ucts such as wrapping paper grew 10 per-
cent, while Hallmark reported only a 1 per-
cent increase in revenues for the same goods
during this period (1992).
New technology has had some impact on
the greeting card industry. Today the cards
sold in more than 100,000 U.S. retail outlets
play music when you open them, or even
play a brief recording of the sender’s voice.
Even more significantly, cards have gone
“virtual,” with greetings sent electronically to
computers or cell phones. It is presumed
these innovations appeal to nontraditional
card buyers such as men and younger people,
as well as attracting the growing number of
“wired” consumers. The two giants in the
greeting card industry are pursuing these
new products aggressively, and projections
indicate that technology may absorb a signif-
icant portion of the greeting card industry in
the future.
For smaller greeting card companies,
other strategies have been useful. Finding a
niche in the market is one way to compete.
The goal is to develop a unique concept or
style that will appeal to a wide segment of the
buying public without disappearing into the
shadows of the giants. For example, use of a
distinctive sense of humor, stylized artwork,
or messages that appeal to specific groups
such as college students could establish a
marketing niche.
Many small card makers have found that it
is very important to listen to their retailers
and sales representatives. To compete in an
industry dominated by the big companies,
the smaller companies have to be better, turn
over more quickly, and be more profitable for
the retailer.SUZY’S GREETING CARD
BUSINESSOne of Suzy’s most important resources for
marketing greeting cards is its network of
independent sales representatives. These indi-
viduals are in continued contact with retail
store owners, who can provide the most
accurate information on consumer prefer-
ences. An early decision was made to go with
the mom-and-pop shops as the stores of
trade, and to stay away from the large, de-
partment-store business. These smaller stores
have been Suzy’s Zoo’s bread and butter;
they place their orders and pay their bills.
According to Spafford, “It’s a clean business
and we make a better profit that way.”
Some of the larger independent card
companies are now encroaching on Suzy’s
Zoo shelf space in these stores. Some smaller
independent card companies have merged to
compete against the big companies. Suzy’s
Zoo maintained a simplified merchandising
policy for sales—no fancy displays, no give-
aways, “just simple, plain, honest business,”
Spafford says. In today’s environment, con-
tinuing to operate under this policy is
becoming more of a challenge. Retailers
expect deals, discounts, merchandising, and
guarantees from the manufacturer to take
back unsold stock. If Suzy’s Zoo does not
offer some sort of consideration to the mar-
ketplace, maintaining shelf space may
become more difficult.
Within the United States, manufacturers’
representatives sell Suzy’s Zoo merchandise
to retailers. These representatives operate on
a nonexclusive basis, getting standard com-
missions of 20 percent on the sales they
make. Suzy’s Zoo does not employ an in-
house sales force. Its products are sold inter-
nationally through international licenses,
international distributors, and direct sales.
Marketing strategies have had to change
over the years to keep up with growth. The
cards have been a boutique item, but other