Marketing Case Study- Hobby Lobby

Is Politics in Business a Good or Bad Thing?

2012 was a big year for America when it came to answering and reanswering important questions. Are corporate entities people? If corporations are people, do they have a voice? Can a for-profit corporation use their money to exercise their first amendment rights and if so, do the rights of a company outweigh the rights of the employees working for the company? When a corporation makes an openly public stance on religion or politics, does it hurt or help their revenue?

Today, 4 years after the 2014 hearing of Burwell v Hobby Lobby Stores,  I am going to examine this through the lens of a marketer.

 

Hobby Lobby

 

hobby lobbyHobby Lobby is an arts and crafts store chain that was founded in Oklahoma City, in 1972. Since then, the business has grown since then to 600 stores nationwide as of April 2015.

It was founded by David Green, who started the company on a $600 loan. Mr. Green is a devout Evangelical Christian who has stated to have come from a family of preachers and has donated much of his earnings to a portfolio of evangelical ministries since at least 2010.  Mr. Green has not been shy about stating that his company had been founded on Christian values and makes a habit of incorporating it into his business policies over the years, such as giving employees mandatory Sundays off for time to worship and spend with family members.

 

Can a For-Profit Company Exercise Religious Belief?

In 2014, political activists from both liberal and conservative lines and the people that were caught in between all the madness watched as Hobby Lobby make its way to the Supreme Court for a ruling. The conflict had come as a byproduct of the Affordable Care Act, that required health insurance provided by employers to cover emergency contraceptives or pay a government fine. The owner of Hobby Lobby stated that providing this was a violation of his, and by extension, his company’s religious liberties and took it to court.  After several arguments over multiple court cases, a decision was finally made.

The Supreme Court ruled in favor of  Hobby Lobby from a  5-4 Yes to No vote. A company can be exempt from having to pay for certain medical treatments based on religious exemption. But the ruling is a lot more nuanced than most people realize.

It does back up the notion that for-profit corporations are persons, that can set policies based on religious exemption. However, there are a few basic requirements that need to be met for that exemption to apply.  For starters, the company needs to be ‘closely’ held by 5 or fewer people. Whats more, this small group of people needs to at least own 50% of the business assets before it can claim any religious exemption.

 

How does this Affect their Business?

profit

 

With the ruling made, there was only one loose end to this story. Did this legal battle hurt their business? After all, Hobby Lobby sparked quite the spirited political debate over its unwavering stance on its religious policies. There were even articles stating that it was a bad marketing decision. But the truth is, it didn’t cause any negative impact on the company, whatsoever.

Hobby Lobby’s annual revenue in 2011 was 2.28 billion dollars. 5 years later, their revenue has almost doubled at 4.3 Billion dollars.  And it is important to note that this is a craft store that has little online activity and does not even have a barcode system for their stores. They also barely spend any money on marketing materials or promotions compared to other chain business stores on that scale.  So, why didn’t they lose any business after all the insanity over this political issue?

 

Reasons Why They are Thriving

 

  • They had free promotion from the court case

Not many store chains can say that they took part in American History through a Supreme Court case. Whether you agree with them or not, they were the talk of news stations for over two years. And they didn’t even have to buy that sort of publicity. No other craft store chain could say that. It was a great marketing tactic on their part, intentional or not.

  • The Greens never made their belief a private part of their identity

This was a business that openly declared that they took Sundays off for religious observance. They also openly donated money to various Christian charities. Of course, they were going to take a conservative political stance on something like health insurance. To expect otherwise would be incredibly ridiculous. They knew where they stood and so did their customers.

In order to lose a customer base,  a business would have to either subvert public expectations or just stop self-promoting. So, it would make sense that they didn’t get any damage from the fallout.

 

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By |2018-05-11T21:11:47+00:00May 11th, 2018|Post|Comments Off on Marketing Case Study- Hobby Lobby

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