5th Edition PPT 16-1

Chapter 16 Retail Communication Mix

McGraw-Hill/Irwin PPT 16-2 Retailing Management, 5/e Levy/Weitz:

Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.

Merchandise Management

Planning Merchandise Assortments Retail Communication Mix

Buying Systems

Buying Merchandise

Pricing

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Objectives of Communication Program

Long-Term -Build Brand Image -Create Loyalty Short-Term -Increase Traffic -Increase Sales

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Brands
Distinguishing name or symbol, such as a logo, that identifies the products or services offered by a seller and differentiates those products and services from those offered by competitors

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Strong Brands Provide Value to Retailers and Their Customers

Value to Retailers Attract Customers Build Loyalty Higher Prices Leading to Higher Gross Margin Reduced Promotional Expenses Facilitates Entry into New Markets Gap
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Value to Customers Promises Consistent Quality Simplifies Buying Process Reduces Time and Effort Searching for Information About Merchandise/Retailer

GapKids

Building a Valuable Brand

Heighten Brand Awareness Brand Equity
Develop Favorable Associations

Consistent Reinforcement
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Create Emotional Connections

Tar-Zhay

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Benefits of High Brand Awareness

Aided Recall Top Mind Awareness

Stimulates Visits to Retailer

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Creating Brand Awareness

Memorable Name Repeated Exposure

Brand Awareness
Event Sponsorship

Symbols
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McDonalds Brand Associations

Golden Arches Fast Food Big Mac

McDonald s
French Fries
Clean
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Ronald McDonald

L.L. Beans Brand Associations

New England Practical Friendly

L.L. Bean
Expertise Outdoors
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Honest

Types of Brand Association

Merchandise Category Office Depot Price/Quality Target, Wal-Mart Specific Benefit 7-Eleven Convenience Lifestyle The Nature Company

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Integrated Marketing Communications

Present a Consistent Brand Image through All Communications with Customers

Store Design Advertising Web Site Magalog

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Brand Extensions
Gap GapKids and Old Navy

Sears

Sears Auto Centers and the Great Indoors

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Using Brand Name on New Concept

Pluses Develop Awareness and Image Quickly Less Costs Needed to Promote Extension

Minuses Associations Might Not Be Compatible with Extension

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Retail Communication Mix

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Communication Methods

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Types of Sales Promotions

Special sales Merchandise demonstrations Premiums Coupons Games, sweepstakes, and contests

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Comparison of Communication Methods

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Steps in Developing a Retail Communication Program

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Retail Communications Program Objectives

Long-term Store, Private Label, Brand Building Short-term Immediate Sales Communication Objectives Affecting Specific Stages in Customers Decision Making Process
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Communication Objectives & Stages in the Consumers Decision-Making Process

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Retail and Vendor Communication Programs

Vendor Long-term objectives Product focused National Specific product Retailer Short-term objectives Category focused Local Assortment of merchandise

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Methods for Setting Communication Budget

Marginal analysis Objective and task Rules of thumb - Affordable - Percent of sales - Competitive parity Sales Advertising Advertising Sales

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Marginal Analysis for Setting Communication Budget

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Illustration of Objective and Task Method for Setting a Communication Budget

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Financial Implications of Increasing the Communication Budget

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Illustrations of Communication Programs

Advertising Program for a Specialty Home Furnishing Retailer Supermarket Chain Evaluating a Vendor Promotion Planning a Direct Marketing Program

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Communication Objectives Furniture Store

Communication Objective Awareness Knowledge What stores sell Oriental furniture? Which stores would you rate outstanding on the following characteristics? Attitude On your next shopping trip for Oriental furniture, which store would you visit first? Visit Which of the following stores have you been to?
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Question

Evaluation of Program

Before Awareness (% of mentioning store) Knowledge (% outstanding rating) Attitude (% first choice) Visit (% of visited store) 38% 9 13 8

6 Mon 46% 17 15 15

12 Mon 52% 24 19 19

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Considerations in Evaluating a Vendor Promotion

Realized margin from the promotion

Cost of the additional inventory Potential increase in sales from the promoted merchandise Potential loss from switching Additional sales from more customer visits

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CRM Campaign Management System

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Financial Analysis of Easter Promotion

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Implementing Retail Advertising Programs

Developing the Message Selecting the Media Determining Ad Frequency and Timing

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Sources of Assistance in Developing Ad Campaigns Vendors Co-Op Programs Agencies Media Companies

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Suggestions for Developing Print Ads

Dominant headline

Dominant element Simple layout Specific, complete presentation Distinct visuals Name and address of store
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Types of Advertising Media

Newspapers Magazines Radio TV Direct mail Outdoor Shopping guide Yellow pages

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Media Capabilities

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Communication Objectives and Effectiveness of Media

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U.S. Expenditures on Advertising

Television Newspaper Direct Mail Radio Yellow Pages Magazine Outdoor Internet Misc
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48 Billion 44 40 14 12 10 2 2 => $30B in 5 yrs 28 Total $200 Billion

Internet Advertising Applications

Retailers in General
Create Awareness Convey Information Brand Building -- Build Store Loyalty

Multi-Channel Retailers
Build Web site Traffic

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Internet -- Advertising Medium

TV, Radio Involvement Reach Targeting Information Delivery Information Richness Measurability Cost Application
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Internet Pull, active Narrow Extensive Extensive Multi-Media High $20 mm (banner) Product Evaluation Brand Loyalty

Push, passive Broad Limited Limited Mm, audio Modest $12/8 per mm Brand Image Awareness

Types of Internet Advertising

Banners - >50% of Expenditures Rich Media Microsites Sponsorships -Embedded in Site Content Email

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Problems with Measuring Effectiveness

Comparison with Other Media for the
Reach Counting Unique Visitors Use of Cookies Frequency Caching Prevent Cache Impact GRPs - Reach x Frequency

Comparison of Internet Advertising Sites

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Internet Ad Measurement Models

Consumer Centric
Panels -- Nielsen TV Advantages -- Representative, Relate usage to Viewer Characteristics, Comparison Across Sites Disadvantage - Small Numbers-Unreliable, Ignores Business Usage

Site-Centric
Accurate Measures of Hits, Visits, Downloads, etc Problems in Measures, Cant Relate to Viewer Characteristics
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Measuring Effectiveness Internet Marketer Perspective

Generating Traffic
Hits - File Requested - Multiple Files Per Page Times Banner Served Page Views - Varies with Length of Page Visitors Unique Visitors Click Throughs Pages Downloaded Length of Stay
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Generating Traffic for Site

Domain Name/Brand Search Directories and Engines
Registration, Top Listing

External Links - Partnerships Publicity Paid Advertising

Internet Other Media
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Monitoring Effectiveness of Traffic Building Approaches

Monitor Sources of Visits Link Behaviors to Sources
Registration Time on Site Pages Downloaded Purchases Amount Purchased

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