retail communiction mix
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McGraw-Hill/IrwinRetailing Management, 6/e Copyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved.
Chapter 16
Retail Communication Mix
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Merchandise Management
Buying
Systems
Managing
Merchandise
Assortments
BuyingMerchandise
Pricing
Retail
Communication
Mix
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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
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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 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
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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 GapKids
Value to Customers Promises Consistent Quality
Simplifies Buying Process
Reduces Time and Effort
Searching for InformationAbout Merchandise/Retailer
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Building a Valuable Brand
BrandEquity
Heighten
BrandAwareness
Create EmotionalConnections
ConsistentReinforcement
Develop
Favorable
Associations
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Benefits of High Brand Awareness
Aided Recall
Top Mind Awareness
Stimulates
Visits toRetailer
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Creating Brand Awareness
Brand
Awareness
MemorableName
Repeated
Exposure
SymbolsEvent
Sponsorship
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McDonalds Brand Associations
McDonalds
Big Mac
Golden
ArchesFastFood
FrenchFries
Clean
RonaldMcDonald
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Wal-Mart Associations
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Target Associations
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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
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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 Compatiblewith Extension
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Retail Communication Mix
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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
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Communication Methods
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Paid Impersonal Communications
Games, sweepstakes and contests
AdvertisingCoupons
Store atmosphere
Website
Jack Star/PhotoLink/Getty Images
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Comparison ofCommunication Methods
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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
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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
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Unpaid Personal Communication
Word of mouth:Can be favorable
Can be detrimental
R
oyalty-Free/CORBIS
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Steps in Developing aRetail Communication Program
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Communication Objectives & Stages in
the Consumers Decision-Making Process
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Retail and VendorCommunication Programs
Vendor
Long-term objectives
Product focused
National
Specific product
Retailer
Short-term objectives
Category focused
Local
Assortment of
merchandise
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Setting the Communication Budget
Marginal analysis
Objective and task
Rules of thumb
- Affordable
- Percent of sales
- Competitive parity
Advertising Sales
Sales Advertising
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Financial Implications ofIncreasing the Communication Budget
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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.
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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.
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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.
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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
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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)
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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
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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
Ryan McVay/Getty Images
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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
NewspapersNewspapers
MagazinesMagazines
RadioRadio
TVTV
Direct mailDirect mail
OutdoorOutdoor
Shopping guideShopping guide
Yellow pagesYellow pages
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Media Capabilities
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Communication Objectivesand Effectiveness of Media
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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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Types of Internet Advertising
Banners - >50% of Expenditures
Rich Media
Microsites
Sponsorships -Embedded in Site Content
Email
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P bl ith
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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
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