Tags

, , , ,

A shopping day in all kinds of typical European shops.The marketing plan for the craft specialty store Hobby Lobby contains all the traditional elements of a marketing plan, as well as a few unique features. Let’s start with the more conventional details.

In terms of store locations, Hobby Lobby seeks out large storefronts that have been vacated by grocery retailers or hardware stores, mainly in suburban areas. The costs for such real estate tend to be up to 70 less than what it would cost the chain to build a new store. In addition, it looks for small cities that boast high numbers of retirees and middle-income families. Such consumers have a little disposable income and enjoy craft projects, such as scrapbooking, but also are relatively price sensitive.

By carrying around 70,000 products on store shelves, Hobby Lobby offers a far larger assortment than competitors such as Michael’s, which averages 37,000 items per store. Accordingly, it tends to attract shoppers from a wide radius. That means it can locate farther away from an urban or population center—meaning lower real estate prices—and still pull crafters willing to make the drive to locate just the right button, bauble, or bead. In addition, it manufactures many of the products it carries, such that the exact versions cannot be found anywhere else.

For its full-time employees, it offers high wages of around $14 per hour, well above the federal minimum wage. But it does not offer one thing to these workers that many firms do: unlimited access to healthcare services. Specifically, Hobby Lobby has entered into a federal lawsuit, filing with the U.S. Supreme Court, to assert it should not be subject to provisions under the federal Affordable Healthcare Act that mandate employers must cover birth control and abortion-inducing drugs. The family that owns the company claims that compliance with this law would violate their religious beliefs.

In the midst of the controversy, no one could argue that the suit is anything less than sincere. Hobby Lobby’s strategy and marketing choices universally reflect the founders’ religious beliefs. Stores are closed on Sundays, such that its operating hours average far less than its competitors (e.g., 66 versus 81 hours per week). Within the stores, the background music is Christian-inspired songs, and the product line features a significant proportion of Christian symbols. However, “gruesome” Halloween decorations are forbidden, and the chain has been criticized for failing to carry enough items reflecting other religions. It also employs company-wide chaplains to interact with employees, though the company is quick to note that it has hired people of all religious faiths.

Source: Susan Thurston, “Hobby Lobby’s Religious Convictions Aren’t for Sale,” Tampa Bay Times, January 12, 2014

Advertisements