The Retail Promotion MixThe Retail Promotion Mix •What is promotion? •A means that retailers use to bring traffic into their stores, and includes… 1.Advertising, 2.Sales promotion, 3.Publicity, and 4.Personal selling.
1. Advertising1. Advertising •Definition: •Paid, non-personal communication through various media by business firms, and individuals who are in some way identified in the advertising message and who hope to inform and/or persuade members of a particular audience •Key points: 1.Performed by retailers (profit or nonprofit) 2.The retailer is identified within the message 3.Designed to persuade or inform 4.Includes, but not limited to: •Communication of products, services, institutions, and/or ideas
2. Sales Promotion2. Sales Promotion •Definition: •Involves the use of media and non-media marketing pressure applied for a pre-determined, limited period of time at the level of consumer, retailer or wholesaler in order to stimulate trial, increase consumer demand, or improve product availability •Key points: 1.Uses both media and non-media 2.Runs for a limited, and pre-determined, period of time 3.Directed at the “customer” (final customer, retailer, wholesaler) 4.Has one of three end-goals •Stimulate trial, increase existing purchases, or expand availability
3. Publicity3. Publicity •Definition: •Non-paid-for communications of information about the company or product, generally in some media form •Key points: 1.Non-paid-for communication •Does not mean that no money has been spent 2.Provides some form of information about a company or product •Examples: 1.Macy’s parade 2.Del Frisco’s Double Eagle Steakhouse
4. Personal Selling4. Personal Selling •Definition: •Selling that involves a face-to-face interaction with the customer •But why is this considered promotion?
4. Personal Selling4. Personal Selling •Definition: •Selling that involves a face-to-face interaction with the customer •But why is this considered promotion? •Rationale: 1.It provides a service to the customer •Ease in information gathering 2.Such service enhances one’s value proposition 3.Value propositions are the reasons customers shop a store •What is the goal of a promotion – traffic
Integrated EffortIntegrated Effort •Promotion decisions relate to and must be integrated with other management decisions, such as: 1.Location 2.Merchandise 3.Credit 4.Cash flow 5.Building and fixtures 6.Price 7.Customer service
Promotion in the Supply ChainPromotion in the Supply Chain •Three major differences in the way retailers and manufacturers use promotion: •Consider which, the retailer or manufacturer, highlights each in their promotions: 1.Product image versus availability 2.Specific product benefits versus price 3.Focused image versus cluttered ads
Promotional ObjectivesPromotional Objectives •Long-term objectives •Institutional advertising •Promoting and selling the store itself rather than the merchandise in the store. •Short-term objectives •Promotional advertising •Promoting the product availability and price to increase short-term performance •Two major goals: 1.Increased patronage from existing customers 2.Attraction of new customers
Selecting Advertising ObjectivesSelecting Advertising Objectives •Advertising objectives are informed by one’s promotional objectives •Advertising objectives are very idiosyncratic, but should never include “to increase sales”. Why? •Generally though, all chosen objectives must be: 1.Aimed at a specific market segment 2.Measurable 3.Stated in terms of a specific time frame •Would this example be okay or poor? Why? •“increase the level of awareness by 30% over the next 6 months”
Budgeting for a“Retailer-Only” CampaignBudgeting for a “Retailer-Only” Campaign •Three general approaches: 1.Affordable Method •Allocates all the money that the retailer can afford for advertising in any given period. 2.Percentage-of-Sales Method •Targets a specific percentage of forecasted sales to be used for advertising ---------------------- 3.Task and Objective Method*
Designing the MessageDesigning the Message •Creative ads should seek to accomplish 3 goals: 1.Attract attention and retain attention. 2.Achieve the objective of the advertising strategy. 3.Avoid errors, especially legal ones •Some approaches used attract & hold attention include: •Lifestyle •Fantasy •Humorous •Slice of life •Mood or image
General Guidelines forScheduling One’s AdvertisingGeneral Guidelines for Scheduling One’s Advertising •Ads should… 1.Appear on, or slightly proceed, the days when customers are most likely to purchase. 2.Be concentrated around the times when people receive their payroll checks. 3.Be concentrated during periods of high seasonal demand if the retailer has limited advertising funds. 4.Appear during the time of day/week when the lowest CPM will be obtained. 5.Spaced so that a greater amount of time exists between the advertisement and the purchase time, when a product class has a high level of habitual purchasing
Evaluating Advertising’s ResultsEvaluating Advertising’s Results •Most ineffective advertising is due to: 1.Messages or sales getting discounted. 2.Advertising not appealing, not giving customers all the information they need, or not directed at the proper target market. 3.Advertising dollars spread too thinly. 4.Poor internal communications. 5.Too many last-minute changes in the advertising copy. 6.Retailer used a medium that reached too many people not in the target market.
Publicity ManagementPublicity Management •When publicity is formally managed, it should be integrated with other elements of the promotion mix. •Major advantages of publicity •It’s perceived as more objective and credible •Likely to appeal to a mass audience. •Major disadvantages of publicity •It’s difficult to control and time •Rumors are just one event that is beyond one’s control and can be highly damaging. •Must be prepared for such events if at al possible.