Retail Communiction Mix

Embed Size (px)

Citation preview

  • 8/3/2019 Retail Communiction Mix

    1/44

    McGraw-Hill/IrwinRetailing Management, 6/e Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved.

    Chapter 16

    Retail Communication Mix

  • 8/3/2019 Retail Communiction Mix

    2/44

    16-2

    Merchandise Management

    Buying

    Systems

    Managing

    Merchandise

    Assortments

    BuyingMerchandise

    Pricing

    Retail

    Communication

    Mix

  • 8/3/2019 Retail Communiction Mix

    3/44

    16-3

    Objectives of Communication Program

    The McGraw-Hill Companies, Inc./Andrew Resek, photographer

    Short-term

    Increase Traffic

    Increase Sales

    Long-term

    Build Brand Image

    Create Loyalty

  • 8/3/2019 Retail Communiction Mix

    4/44

    16-4

    Brands

    Distinguishing name or symbol,

    such as a logo, that identifies the

    products or services offered by a

    seller and differentiates thoseproducts and services from those

    offered by competitors

    The McGraw-Hill Companies, Inc./Bob Coyle, photographerThe McGraw-Hill Companies, Inc./John Flournoy, photographer

    TheMcGraw-HillComp

    anies,Inc./JohnFlournoy,photographer

  • 8/3/2019 Retail Communiction Mix

    5/44

    16-5

    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 GapKids

    Value to Customers Promises Consistent Quality

    Simplifies Buying Process

    Reduces Time and Effort

    Searching for InformationAbout Merchandise/Retailer

  • 8/3/2019 Retail Communiction Mix

    6/44

    16-6

    Building a Valuable Brand

    BrandEquity

    Heighten

    BrandAwareness

    Create EmotionalConnections

    ConsistentReinforcement

    Develop

    Favorable

    Associations

  • 8/3/2019 Retail Communiction Mix

    7/44

    16-7

    Benefits of High Brand Awareness

    Aided Recall

    Top Mind Awareness

    Stimulates

    Visits toRetailer

  • 8/3/2019 Retail Communiction Mix

    8/44

    16-8

    Creating Brand Awareness

    Brand

    Awareness

    MemorableName

    Repeated

    Exposure

    SymbolsEvent

    Sponsorship

  • 8/3/2019 Retail Communiction Mix

    9/44

    16-9

    McDonalds Brand Associations

    McDonalds

    Big Mac

    Golden

    ArchesFastFood

    FrenchFries

    Clean

    RonaldMcDonald

  • 8/3/2019 Retail Communiction Mix

    10/44

    16-10

    Wal-Mart Associations

  • 8/3/2019 Retail Communiction Mix

    11/44

    16-11

    Target Associations

  • 8/3/2019 Retail Communiction Mix

    12/44

    16-12

    Brand Extensions

    Gap GapKids andOld Navy

    Sears Sears AutoCenters and

    the Great Indoors

    Pottery Barn Pottery Barn Kids

    The McGraw-Hill Companies, Inc./Andrew Resek, photographer

  • 8/3/2019 Retail Communiction Mix

    13/44

    16-13

    Using Brand Name on New Concept

    Pluses

    Develop Awareness

    and Image Quickly Less Costs Needed

    to Promote Extension

    Minuses

    Associations Might

    Not Be Compatiblewith Extension

  • 8/3/2019 Retail Communiction Mix

    14/44

    16-14

    Retail Communication Mix

  • 8/3/2019 Retail Communiction Mix

    15/44

    16-15

    Integrated Marketing Communications

    Present a Consistent Brand Image through all

    Communications with Customers

    Store Design

    Advertising

    Web SiteMagalog

    The McGraw-Hill Companies, Inc./Andrew Resek, photographer

  • 8/3/2019 Retail Communiction Mix

    16/44

    16-16

    Communication Methods

  • 8/3/2019 Retail Communiction Mix

    17/44

    16-17

    Paid Impersonal Communications

    Games, sweepstakes and contests

    AdvertisingCoupons

    Store atmosphere

    Website

    Jack Star/PhotoLink/Getty Images

  • 8/3/2019 Retail Communiction Mix

    18/44

    16-18

    Comparison ofCommunication Methods

  • 8/3/2019 Retail Communiction Mix

    19/44

    16-19

    Paid Personal Communication

    Retail salespeople are primary vehicle for providing

    paid personal communication to customers.

    Personal selling salespeople satisfy needsthrough face to face exchange of information

    Email retailers inform customers of new

    merchandise, receipt of order or when order hasbeen shipped

  • 8/3/2019 Retail Communiction Mix

    20/44

    16-20

    Unpaid Impersonal Communication

    Publicity is communication through significant

    unpaid presentations about the retailer, usually a

    news story, in impersonal media.

    Newspaper

    TV coverage

    Macys Thanksgiving Day Parade

  • 8/3/2019 Retail Communiction Mix

    21/44

    16-21

    Unpaid Personal Communication

    Word of mouth:Can be favorable

    Can be detrimental

    R

    oyalty-Free/CORBIS

  • 8/3/2019 Retail Communiction Mix

    22/44

    16-22

    Steps in Developing aRetail Communication Program

  • 8/3/2019 Retail Communiction Mix

    23/44

    16-23

    Communication Objectives & Stages in

    the Consumers Decision-Making Process

  • 8/3/2019 Retail Communiction Mix

    24/44

    16-24

    Retail and VendorCommunication Programs

    Vendor

    Long-term objectives

    Product focused

    National

    Specific product

    Retailer

    Short-term objectives

    Category focused

    Local

    Assortment of

    merchandise

  • 8/3/2019 Retail Communiction Mix

    25/44

    16-25

    Setting the Communication Budget

    Marginal analysis

    Objective and task

    Rules of thumb

    - Affordable

    - Percent of sales

    - Competitive parity

    Advertising Sales

    Sales Advertising

  • 8/3/2019 Retail Communiction Mix

    26/44

    16-26

    Financial Implications ofIncreasing the Communication Budget

  • 8/3/2019 Retail Communiction Mix

    27/44

    16-27

    Rule of Thumb Methods

    Affordable methods sets communication budget by determining

    what money is available after operating costs and profits are

    budgeted.

    Drawback: The affordable method assumes that the communication

    expenses dont stimulate sales and profits.

  • 8/3/2019 Retail Communiction Mix

    28/44

    16-28

    Rule of Thumb Methods

    Percentage of Sales Method communication budget is set as a

    fixed percentage of forecasted sales.

    Drawback: This method assumes the same percentage used in thepast, or by competitors, is still appropriate for the retailer.

  • 8/3/2019 Retail Communiction Mix

    29/44

    16-29

    Rule of Thumb Methods

    Competitive Parity Method this communication budget is set so

    that the retailers share of communication expenses equals its

    share of the market.

    Drawback: This method (like the others) does not allow the retailer

    to exploit the unique opportunities or problems they confront in a

    market.

  • 8/3/2019 Retail Communiction Mix

    30/44

    16-30

    Illustrations of Communication Programs

    Advertising Program for a

    Specialty Home

    Furnishing Retailer

    Discounter Promoting a

    Brand

    Planning a Direct

    Marketing Program

    McGraw-Hill Companies, Inc./Gary He, photographer

  • 8/3/2019 Retail Communiction Mix

    31/44

  • 8/3/2019 Retail Communiction Mix

    32/44

    16-32

    Evaluation of Program

    Before 6 Mon 12 Mon

    Awareness 38% 46% 52%(% of mentioning store)

    Knowledge 9 17 24(% outstanding rating)

    Attitude 13 15 19

    (% first choice)

    Visit 8 15 19(% of visited store)

  • 8/3/2019 Retail Communiction Mix

    33/44

    16-33

    Considerations inEvaluating 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

  • 8/3/2019 Retail Communiction Mix

    34/44

    16-34

    CRM Campaign Management System

  • 8/3/2019 Retail Communiction Mix

    35/44

    16-35

    Financial Analysis of Easter Promotion

  • 8/3/2019 Retail Communiction Mix

    36/44

    16-36

    Implementing Retail Advertising Programs

    Developing the Message

    Selecting the Media

    Determining Ad Frequency and Timing

    Ryan McVay/Getty Images

  • 8/3/2019 Retail Communiction Mix

    37/44

    16-37

    Suggestions for Developing

    Print Ads

    Dominant headline

    Dominant element

    Simple layout

    Specific, complete presentation

    Distinct visuals

    Name and address of store

  • 8/3/2019 Retail Communiction Mix

    38/44

    16-38

    Types of Advertising Media

    NewspapersNewspapers

    MagazinesMagazines

    RadioRadio

    TVTV

    Direct mailDirect mail

    OutdoorOutdoor

    Shopping guideShopping guide

    Yellow pagesYellow pages

  • 8/3/2019 Retail Communiction Mix

    39/44

    16-39

    Media Capabilities

  • 8/3/2019 Retail Communiction Mix

    40/44

    16-40

    Communication Objectivesand Effectiveness of Media

  • 8/3/2019 Retail Communiction Mix

    41/44

    16-41

    Internet Advertising Applications

    Retailers in General

    Create Awareness

    Convey Information

    Brand Building -- Build Store Loyalty

    Multi-Channel Retailers

    Build Web site Traffic

  • 8/3/2019 Retail Communiction Mix

    42/44

    16 43

  • 8/3/2019 Retail Communiction Mix

    43/44

    16-43

    Types of Internet Advertising

    Banners - >50% of Expenditures

    Rich Media

    Microsites

    Sponsorships -Embedded in Site Content

    Email

    16 44

    P bl ith

  • 8/3/2019 Retail Communiction Mix

    44/44

    16-44

    Problems withMeasuring 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