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

• Email

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