PPT 16-1
5th Edition5th Edition
PPT 16-2McGraw-Hill/IrwinLevy/Weitz: Retailing Management, 5/e Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Retail Retail Communication MixCommunication Mix
Chapter 16Chapter 16
PPT 16-3
Merchandise Management
BuyingSystems
PlanningMerchandiseAssortments
BuyingMerchandise
Pricing
RetailCommunication
Mix
PPT 16-4
Objectives of Communication Program
Long-Term
-Build Brand Image
-Create Loyalty
Short-Term
-Increase Traffic
-Increase Sales
PPT 16-5
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
PPT 16-6
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 Information About Merchandise/Retailer
PPT 16-7
Building a Valuable Brand
Brand Equity
Heighten Brand Awareness
Create Emotional Connections
Consistent Reinforcement
DevelopFavorableAssociations
PPT 16-8
Tar-Zhay
PPT 16-9
Benefits of High Brand Awareness
Aided Recall
Top Mind Awareness
Stimulates Visits to Retailer
PPT 16-10
Creating Brand Awareness
Brand Awareness
Memorable
Name
Repeated Exposure
SymbolsEvent Sponsorship
PPT 16-11
McDonald’s Brand Associations
McDonald’s
Big Mac
Golden Arches
Fast Food
French Fries
Clean
Ronald McDonald
PPT 16-12
L.L. Bean’s Brand Associations
L.L. Bean
Friendly
New England
Practical
Expertise
Outdoors
Honest
PPT 16-13
Types of Brand Association
• Merchandise Category – Office Depot
• Price/Quality – Target, Wal-Mart
• Specific Benefit – 7-Eleven Convenience
• Lifestyle – The Nature Company
PPT 16-14
Integrated Marketing Communications
Present a Consistent Brand Image through All Communications with Customers
•Store Design
•Advertising
•Web Site
•Magalog
PPT 16-15
Brand Extensions
• Gap GapKids and Old Navy
• Sears Sears Auto Centers and the Great Indoors
PPT 16-16
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
PPT 16-17
Retail Communication Mix
PPT 16-18
Communication Methods
PPT 16-19
Types of Sales Promotions
Special sales
Merchandise demonstrations
Premiums
Coupons
Games, sweepstakes, andcontests
PPT 16-20
Comparison of Communication Methods
PPT 16-21
Steps in Developing a Retail Communication Program
PPT 16-22
Retail CommunicationsProgram Objectives
Long-term
• Store, Private Label, Brand Building
Short-term
• Immediate Sales
Communication Objectives
• Affecting Specific Stages in Customer’s Decision Making Process
PPT 16-23
Communication Objectives & Stages in the Consumers Decision-Making Process
PPT 16-24
Retail and Vendor Communication Programs
Vendor
• Long-term objectives
• Product focused
• National
• Specific product
Retailer
• Short-term objectives
• Category focused
• Local
• Assortment of
merchandise
PPT 16-25
Methods for Setting Communication Budget
• Marginal analysis
• Objective and task
• Rules of thumb
Affordable
Percent of sales
Competitive parity
Advertising Sales
Sales Advertising
PPT 16-26
Marginal Analysis for Setting Communication Budget
PPT 16-27
Illustration of Objective and Task Method for Setting a Communication Budget
PPT 16-28
Financial Implications of Increasing the Communication Budget
PPT 16-29
Illustrations of Communication Programs
• Advertising Program for a Specialty Home Furnishing Retailer
• Supermarket Chain Evaluating a Vendor Promotion
• Planning a DirectMarketing Program
PPT 16-30
Communication Objectives - Furniture Store
Communication Question
Objective
Awareness What stores sell Oriental furniture?
Knowledge 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?
PPT 16-31
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)
PPT 16-32
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
PPT 16-33
CRM Campaign Management System
PPT 16-34
Financial Analysis of Easter Promotion
PPT 16-35
Implementing Retail Advertising Programs
• Developing the Message
• Selecting the Media
• Determining Ad Frequency and Timing
PPT 16-36
Sources of Assistance in Developing Ad Campaigns
• Vendors – Co-Op Programs
• Agencies
• Media Companies
PPT 16-37
Suggestions for DevelopingPrint Ads
• Dominant headline
• Dominant element
• Simple layout
• Specific, complete presentation
• Distinct visuals
• Name and address of store
PPT 16-38
Types of Advertising Media
NewspapersNewspapers
MagazinesMagazines
RadioRadio
TVTV
Direct mailDirect mail
OutdoorOutdoor
Shopping guideShopping guide
Yellow pagesYellow pages
PPT 16-39
Media Capabilities
PPT 16-40
Communication Objectives and Effectiveness of Media
PPT 16-41
U.S. Expenditures on Advertising
Television 48 Billion
Newspaper 44
Direct Mail 40
Radio 14
Yellow Pages 12
Magazine 10
Outdoor 2
Internet 2 => $30B in 5 yrs
Misc 28 Total $200 Billion
Television 48 Billion
Newspaper 44
Direct Mail 40
Radio 14
Yellow Pages 12
Magazine 10
Outdoor 2
Internet 2 => $30B in 5 yrs
Misc 28 Total $200 Billion
PPT 16-42
Internet Advertising Applications
• Retailers in General
– Create Awareness
– Convey Information
– Brand Building -- Build Store Loyalty
• Multi-Channel Retailers
– Build Web site Traffic
PPT 16-43
Internet -- Advertising Medium
TV, Radio Internet
Involvement Push, passive Pull, active
Reach Broad Narrow
Targeting Limited Extensive
Information Delivery Limited Extensive
Information Richness Mm, audio Multi-Media
Measurability Modest High
Cost $12/8 per mm $20 mm (banner)
Application Brand ImageAwareness
Product EvaluationBrand Loyalty
PPT 16-44
Types of Internet Advertising
• Banners - >50% of Expenditures
• Rich Media
• Microsites
• Sponsorships -Embedded in Site Content
PPT 16-45
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
PPT 16-46
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, Can’t Relate to Viewer Characteristics
PPT 16-47
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
PPT 16-48
Generating Traffic for Site
• Domain Name/Brand
• Search Directories and Engines
– Registration, Top Listing
• External Links - Partnerships
• Publicity
• Paid Advertising
– Internet
– Other Media
PPT 16-49
Monitoring Effectiveness of Traffic Building Approaches
• Monitor Sources of Visits• Link Behaviors to Sources
– Registration– Time on Site– Pages Downloaded– Purchases– Amount Purchased