analyzing customer life time value and customer buying decision factors....

1. Presented By:
AESHA PATEL
DIYA PATEL

2. CASE OVERVIEW
• The greeting card industry is an interesting one, especially from a
consumer behavior perspective. Greeting cards are highly symbolic
products. Physical product itself may be less important than what it
represents (its symbolic meanings). The choice process for greeting cards
is also a bit different from other consumer goods products.
• Choosing which greeting card to buy is somewhat analogous to choosing
from hundreds of flavors of a particular brand of ice cream. Most people
select a card that reflects the particular affective tone and sentiment they
desire, and are not very concerned about the "brand" of the card.

3. CONT….
• Hallmark, the market leader, has competitive pressures from several
fronts. Besides its two main competitors, American Greetings and
Gibson, a variety of smaller "alternative" card companies have made
successful inroads into the business.
• In response to that threat, Hallmark introduced its own line of
"alternative cards" as a separate division of Hallmark called Shoebox
Greetings, it produced an extensive line of mostly humorous cards.
• In the late 1990s, Hallmark had to contend with an online competitor,
Blue Mountain Arts, whose Web site allowed consumers to design and
send greeting cards electronically.
• In response, Hallmark revamped its own Web site, which offered a
wide selection of e-cards not available in stores

4. Q 1 The “typical” decision making process for buying a Hallmark card is
likely to vary in different situations.

5. • Hallmark has managed to create a distinction for itself in this market.
1. Problem recognition :
• In the following case study, we consider Birthday, Graduation and
wedding as 3 different situation which can be stated as external
stimuli, where the consumers needs are arouse. Thus marketer need to
trigger consumer’s interest.
• The decision making process of consumer is likely to vary in
recognizing needs for example, a consumer may buy more birthday
cards than wedding or graduation cards, merely because birthdays
occur more frequently and regularly than does either of the other two
situations.
2. Information search :
• Once the need is recognized by consumer, the next level they enter is
‘active information search’, through various sources :
• Personal :- family, friends, neighbors
• Commercial :- Advertisement, web site, packaging & display.
• Public :- mass media, consumer rating organization
• Experimental :- frequency of purchase, using the product.

6. 3. Evaluation of alternative :
• Here consumers will pay the most attention to attributes that deliver
more benefits.
• Most people select a card that reflects the particular affective tone
and sentiment they desire, and are not very concerned about the
"brand" of the card.
4. Purchase decision :
• consumer would consider various aspect i.e
• Product choice : Light users, depending upon consumer’s perspective
of interest and choosing from varities rather than brand. While heavy
users may concentrate on buying only Hallmark cards.
• Timing : depending upon the consumer convenience of time and
occasion.
• Payment method/purchase amount : consumer will choose easy
payment method and economical price to buy card.

7. 5. Post purchase behavior :
• Post purchase satisfaction:- If consumers are satisfied with their
emotional appeal, and meet their expectation, the consumer is
satisfied.
• Post purchase action:- If consumer are satisfied, they will more likely
to purchase the product again.
 How decision vary in different situation ?
• consumer may buy more birthday cards than wedding or graduation
cards, merely because birthdays occur more frequently and regularly
than does either of the other two situations.
• In each of the situations presented, consumers usually have sufficient
advance notice, the only exception being birthdays if the consumer is
not aware of an upcoming birthday. Thus, the problem recognition
stage might involve some amount of prior thought and result in
evaluation of possible greeting options, for instance an email, versus a
letter, versus a gift versus a paper card or an electronic card.
Consumers might use different decision processes for different
occasions. For example, Aunt Millie might always get a Hallmark card
but friends might receive an “alternative” card.

8. Q 2 how and why consumers make store choices (i.e. buying a card in a
Wal-Mart rather than in a Hallmark Gold Crown store) is particularly
important to Hallmark. Discuss how store choice interacts with and
influences choices of Hallmark products and brands.
• When consumers need a greeting card, they must first choose where to
look for a card
• If the consumer decides to go to a Hallmark card shop, he/she, of
course, will be considering only Hallmark cards, which is advantageous
for Hallmark.
• Thus, the store choice decision is an important one for Hallmark
marketing managers to understand.
• If consumers instead decide to look for cards in a grocery or drug store,
a retailer like Wal-Mart, or a general card shop, there is a strong
probability that the cards of other manufacturers will be also
considered.
• This insight led Hallmark to the marketing strategy of emphasizing the
Hallmark shop.

9. • Hallmark's advertising encourages shoppers to think about Hallmark
shops and to come into the shop when they need greeting cards or
other related products (party goods, small gift items).
• Consumers who visit Hallmark shops may be loyal to Hallmark cards or
may be loyal to that particular store, and would therefore often be
willing to pay premium prices for Hallmark’s high-end brands.
• Here Hallmark wants to make their customers “ a hard core loyal”
which benefits him to create positioning of brand image in minds of
customers.
• From CLV ( Customer Lifetime Value ), Hallmark can identify which
customer are profitable for his product.

10. CUSTOMER LIFETIME VALUE

11. • Women buy many more greeting cards than men. At least some of that
difference is probably due to women acting as purchasing agents who
buy cards for their loved ones to send.
• One reason women purchase more greeting cards may be that they are
more interested in cultivating and maintaining interpersonal
relationships than are men.
• Looking at the distribution of greeting card purchases by age, we low
levels of purchases among young people, a purchasing peak during
middle age, then a drop off again after age 50.
Q 3 Marketing research estimates men account for only 15 to 20 percent of
the greeting card purchases in the United States. Furthermore, young
consumers and those over 50 don’t buy as many cards as those in middle
age. Why do you think this is so? What can Hallmark do to reach these two
segments?

12.  What can Hallmark do to reach these two segments?
 Demographic Segment :
 Age & Life stage :-
• consumer wants and ability change with their age and life stage.
• Hallmark might want to develop a line of e-cards that are extremely
cool to reach younger consumers.
 Gender :-
• To reach men, perhaps Hallmark could create ads that show wives,
and children reacting favorable to receiving Hallmark cards from the
men in their lives.
 Behavioral Segment :
 Occasion :-
• One idea to get people attracted is to emphasize on certain “special
days”.
• If young people would come to feel that “Grandparent’s Day,” were an
important day, it might get them into the habit of buying cards, not
only for that day but for other events like Mother’s day, Friendship
day, etc.