Overview of the Case
Eliot Greeting Card Company is in a tight position as a result of reduced preference for the usage of cards for various occasions as well as stiff competition from the established members of the industry. These established companies are American Greeting, Hallmark and Gibson Greetings. Hallmark leads the market capitalization with 42% followed by American Greetings with 30%. Gibson Greetings has 10% and Eliot Greeting has a declining 4%.The other segment of the market is in the hands of smaller companies. The possibility of venturing into the export market so as to avoid the bruising competition with the companies that are already ahead in the industry can be used as a good alternative (Baker, 2008, pp.23-24). Besides, the company is searching for new ways, including the Hispanic market share and the export of their goods to other English-speaking countries.
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Statement of the Main Problem
The Eliot Greeting Card Company has faced the problem of reduced profits due to the increased number of competitors within a segment that had been used as almost the only advantage; other segments of the same market should be explored in order to stay competitive, though the Board avoids the direct competition with the leading companies of the industry.
Level of analysis
There is a clear cultural element in the Hispanic market. The way in which the Hispanic community uses greeting cards is different from how greeting cards are used in most English speaking countries and there is the obvious difference in language. Eliot as a company is not decided on how to approach the language problem in the Hispanic community. The research that is associated with the big industry members such as American Greeting and Hallmark suggests that dealing with Hispanics as a homogeneous group is the best way to go while Rubin of Rousana is of the idea that the dialects in Spanish are still significant. However, the purchasing abilities of the Hispanic sector of the U.S. population have increased which makes this segment of the market more attractive to the producers of all kinds of goods, including the greeting cards industry.
There is no agreement in Eliot because the president supports the export idea while the sales president supports the Hispanic venture. The fact that the company has to deal with dropping sales and stiff competition means that financial calculations have to be looked into before any of the options is chosen (Ferrell & William, 2006, pp.56-57). The decision to be made has an implication on the human resources of the company which is directly linked to finances (Jackson & Mathis, 2004, pp.89-90). In both cases, it is necessary to find an appropriate approach to the target audience. In other words, using the export strategy, it is necessary to take into account certain traditions and cultural peculiarities of other English-speaking countries, whereas the Hispanic approach requires efficient employees with Spanish language competence.
The marketing communication should include appropriate advertising, direct marketing, public relations, exhibitions, sales promotion, and other methods to develop the consumers’ awareness of the brand. Moreover, it is notable that the brand commitment is one of the most significant elements of the brand success. In this respect, it is necessary to use sales promotion as one of effective methods of gaining the audience because both strategic groups under consideration, English-speaking and Hispanics, have strong brand commitment.
The Eliot Greeting Card Company was standing a small niche of the industry enjoying a segment of the cards on less popular occasions than the leading companies. As the telephone greetings became more spread and took the share of the greeting card market, the leading companies had established their competitive lines in the segment previously attributed to the Eliot Company. In this respect, the Eliot Company has to approach another segment of the market and establish effective strategies of other target groups.
List of Critical Factors and Reasons that Factor Is Critical
Eliot as a company has not yet decided on the market to take its products to. There is a debate between exporting greeting cards to other countries and selling them to the American Hispanic population. One of the reasons is that market selection determines the design of the products, in this case, greeting cards (Kotler & Keller, 2006, pp.54-55). This means that without the decision or selection of the market, greeting card production will have to be put on hold.
Competition is clearly an issue in this case. Eliot is facing stiff competition from American Greetings, Hallmark Inc., Gibson Greetings, and Rousana as well as other small companies. Competition determines the strategy for marketing (Laermer & Simmons, 2007, pp.101-103). If the competitors are using a particular method that is working with the market, Eliot will have to adopt that method and do it even better.
Culture is simply the way of life of a particular group of people. In this particular case, the culture of the English speaking people as well as the culture of the Hispanics seems to be a major determinant of how they make use of the product which in this case refers to greeting cards. Language as an aspect of culture is at play in both the Hispanic market as well as the export market (Miles, 2003, pp.67-68).
Taking up the Hispanic market is one of the available ways to deal with the issue of dwindling sales and stiff competition. The best way to do it will be by analyzing the available information and dealing with the Hispanic population in a more appropriate manner (Porter, 1980, pp.123-124). Production of dialect specific cards can be a big winner due to the issue brought up by Rubin from Rousana.
- The stiff home competition will be avoided.
- The company will face less language issues as it will be dealing with matters of the same language as opposed to Spanish which is a totally different language.
- It is not necessary to hire efficient language consultants.
- The cost for development of appropriate designs can be spent on advertising and brand awareness and brand commitment strategies.
- The company can implement the same marketing strategies as for the US population.
- The cost of export will be higher than the cost of selling to the Hispanic market at home.
- The infrastructure will take long to set up thus delaying the company’s business.
- It is still a new market with certain peculiarities, so, it is necessary to learn those first.
- Cultural peculiarities should be taken into account as well as with the Hispanic group.
The Eliot greeting Card company should get into the Hispanic community instead of approaching the export strategies.
Rationale and Justification
The fact that there is sufficient information concerning the Spanish-speaking market share in the US is a solid ground on which to lay a working strategy. Designing cards based on different dialects and cultural differences typical of various regions of Spanish-speaking countries for the Hispanic community will benefit greatly the Eliot Company (Pearce & Robnson, 2008, pp.89-90). This is the main reason for joining this market in spite of competition because the leading companies of the industry have focused on universal cards for all Hispanics in traditional Spanish regardless of dialects and traditions.
Baker, M., (2008). The strategic marketing plan audit. NewYork: Cambridge Strategy Publications.
Ferrell, P. & William,O., (2006). Marketing concepts and strategies. New York: South-Western College Pub.
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Jackson, J. & Mathis,R., (2004).Human resource management (11th ed.). New York: South-Western College Publishers.
Kotler,P. & Keller,K., (2006). Marketing management. (12th ed.). New York: Prentice Hall.
Laermer, R. & Simmons, M., (2007). Punk marketing. New York: Harper Collins.
Miles, R., (2003). Organizational strategy, structure,and process. Stanford: Stanford University Press.
Pearce, J. & Robnson,R., (2008). Strategic management. (11th ed).New York: McGraw-Hill/Irwin.
Porter, M., (1980). Competitive strategy. New York: Free Press.