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Greeting card kingpin Hallmark Cards, accustomed to cozy profits and steady growth for decades, has been jolted awake by the 1990s.

The high-velocity lifestyles of today's dual-career families, plus new competition in retail channels, have put Hallmark on the defensive as it struggles to maintain its leading 45% share of the estimated $5.6 billion greeting card industry.

Women, who account for 85% to 90% of all greeting card purchases, are spending less time than ever lingering in Hallmark's card stores, where a significant portion of its profits are driven by sales of entertainment and decorative items.

To win them back, Hallmark is becoming more aggressive in its marketing and stepping up its incentives through new products and alternative marketing tactics-while experimenting with price strategies and new media messages.

The company also is striving to retain elements of its more graceful past-such as its 50-year-old signature, "When you care enough to send the very best."

Inked by a Hallmark employee and executives at erstwhile agency Foote, Cone & Belding, New York, the theme line is still used in advertising by current agency Leo Burnett USA, Chicago.

"The theme line is still as contemporary as ever, which is amazing when you consider all the changes in our society," said Brad Moore, Hallmark's VP-advertising and TV programming.

Much less graceful is Hallmark's experience recently in the dog-eat-dog retail world, where the rise of mass merchants like Wal-Mart Stores, Kmart Corp. and Target Stores is eating into Hallmark's turf. In these channels, Hallmark shares distribution with rivals No. 2 American Greetings and No. 3 Gibson Greetings.

On the other side of Hallmark's retail challenge is the rise of upscale card lines from the likes of Recycled Paper Greetings and Sunrise Publications sold through gift stores and bookstores.

"Increasingly, the greeting card industry is being controlled by the distribution channel, where Hallmark doesn't have a big advantage over its rivals," said Peter P. Appert, an analyst with Alex. Brown & Sons, San Francisco.

To meet the competition, Hallmark is turning up the heat on marketing its Hallmark and Ambassador brand greeting cards and other greeting, stationery and entertainment products sold at 20,000 retail outlets nationwide. That includes 5,120 Gold Crown stores-200 company-owned-offering Hallmark's full line of products.

The most striking example of the shift is Hallmark's relationship, or database marketing, which now accounts for 33% of its total marketing budget, Mr. Moore said.

Among non-traditional approaches are The Very Best and Keeping in Touch, two database marketing programs executed by Burnett. Both involve regular mailings to about 3.5 million key customers, who account for about 25% of Hallmark's sales.

In August Hallmark introduced the Gold Crown Card, its first frequent buying program that awards 10 points for each $1 spent, plus 25 points for each greeting card purchased. Points are redeemable for merchandise certificates and gifts. More than 2 million customers have signed up.

Hallmark also continues its reliance on the thrice-yearly "Hallmark Hall of Fame" network TV specials, which serve as ad vehicles for its products and have generated numerous Emmy awards.

Many of Hallmark's TV specials also have become best selling videocassettes, distributed by Republic Pictures and other studios. Hallmark has opted against marketing videos in its stores, due to the complexity of the video sales and rental industry.

This year Hallmark branched further into TV entertainment with the purchase of long-form TV programming company RHI Entertainment, with the goal of creating family oriented TV programs and movies marketable to entertainment outlets.

Underscoring all of Hallmark's marketing is the goal of keeping customers interested in visiting its stores. To do that Hallmark is trying point-of-purchase incentives and new products.

Hallmark for the first time is offering its humorous Shoebox Greetings card for $1.29 vs. the regular price of $1.65, promoted in a humorous 30-second TV spot by Leo Burnett USA, Chicago. The agency also produced an offbeat spot TV commercial this fall using "Star Trek: The Next Generation" characters to market a unique Keepsake holiday ornament. Hallmark also has added the toll-free number 1-800-Hallmark to help consumers locate the nearest Hallmark retail outlet.

In the last two years, Hallmark has rolled out several high tech, higher-price greeting card products including Personalize It! computer-customized cards similar to American Greetings' CreataCard kiosks.

Hallmark also rolled national with its $5.95 Long-Distance Greetings: greeting cards including a prepaid Sprint 10-minute long-distance calling card.

Its $7.95 recordable greeting cards rolled out in January, but analysts fear higher-price cards are less attractive and profitable in today's market.

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