effective advertising in retail
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Retail Promotional StrategyRetail Promotional Strategy
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Retail PromotionRetail Promotion
Any communication by a retailer thatinforms, persuades, and/or reminds
the target market about anyaspect of that firm
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Elements of theElements of the
Promotional MixPromotional Mix
Advertising
Sales promotion
Store atmosphereWeb site
SEM
Personal selling
E-mail marketing
Publicity
SEM
Word of mouth
Impersonal Personal
Unpaid
Pa
id
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Management of PromotionalManagement of Promotional
Efforts Must Fit Into a RetailersEfforts Must Fit Into a Retailers
Overall StrategyOverall Strategy
A retailers location will help determine the target area for promotions
Retailers need high levels of traffic to keep merchandise moving promotion helps build traffic
Retailers credit customers more store loyal and purchase on largerquantities making them an excellent target for promotions
Promotions can increase short-run cash flow
Promotional creativity and style should coincide with building andfixture creativity
Promotion can be viewed as a major component of customer servicebecause it provides information
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Promotional GuidelinesPromotional Guidelines
Utilize promotions that are consistent with and enhance store image
Review success or failure of each promotion to help in developing futurepromotions
Test new promotions when possible
Use appeals that are of interest to your target market and that are realistic toobtain
Make your objectives measurable and obtainable
Develop total promotional campaigns, not just ads
New stores need higher promotional budgets than established stores
Stores in out-of-the-way locations require higher promotional budgets thanstores with heavy traffic
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Planning a RetailPlanning a Retail
Promotional StrategyPromotional Strategy
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Promotional ObjectivesPromotional Objectives
Increase sales
Stimulate impulse and reminder buying
Raise customer traffic
Get leads for sales personnel Present and reinforce the retailer image
Inform customers about goods and services
Popularize new stores and Web sites
Capitalize on manufacturer support Enhance customer relations
Maintain customer loyalty
Have consumers pass along positive information
to friends and others
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Promotional ObjectivesPromotional Objectives
Improve Long-RunPerformance
Improve Short-RunPerformance
Store Image andPositioning
PublicService
Increase ExistingCustomer Patronage
Attract NewCustomers
From ExistingTrade Area
ExpandTrade Area
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Public RelationsPublic Relations
Public Relations - Any communication that fostersa favorable image for the retailer among its publics Nonpersonal or personal
Paid or nonpaid Sponsor-controlled or not
Publicity Any nonpersonal form of publicrelations whereby messages are transmitted
through mass media, the time or space providedby the media is not paid for, and there is noidentified commercial sponsor
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Public RelationsPublic Relations
Advantages
Image can be presented orenhanced
More credible source No costs for messages
time or space
Mass audience addressed
Carryover effects possible
People pay more attentionthan to clearly identifiedads
Disadvantages
Some retailers do notbelieve in spending on
image-relatedcommunication
Little control over publicitymessage
More suitable for short run
Costs for PR staff,planning activities, andevents
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AdvertisingAdvertising
Paid, nonpersonal communicationtransmitted through out-of-store massmedia by an identified sponsor
Key aspects Paid form
Nonpersonal presentation Out-of-store mass media
Identified sponsor
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Selected U.S. Advertising-to-Selected U.S. Advertising-to-
Sales Ratios by Type of RetailerSales Ratios by Type of Retailer
Type of Retailer Advertising $ as a% of Sales Dollars
Advertising $ as %of Margin
Apparel and accessories stores 6.6 16.7
Auto and home supply stores 1.0 2.3
Department stores 3.6 10.3
Drug and proprietary stores 0.8 3.2
Eating places 3.6 16.1
Family clothing stores 2.5 8.3
Furniture stores 4.6 13.8Grocery stores 1.2 4.9
Hobby, toy, and game shops 1.2 3.8
Hotels and motels 1.8 8.1
Lumber and building materials 0.5 1.7
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AdvertisingAdvertising
Advantages
Attracts a large audience
Gains pass alongreadership (for print)
Low cost per contact
Many alternativesavailable
Control over messagecontent; message can be
standardized Message study possible
Editorial contentsurrounds ad
Self-service operations
possible
Disadvantages
Standardized messageslack flexibility
Some media require largeinvestments
Geographic flexibilitylimited
Some media require longlead time
Some media have highthrowaway rate
Some media limit theability to provide detailedinformation
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Advertising MediaAdvertising Media
Comparison ChartComparison Chart
Medium Market Coverage Particular Suitability
Daily Papers Single community or entiremetro area; local editions maybe available
All larger retailers
Weekly Papers Single community usually; maybe a metro area
Retailers with a strictly localmarket
Shopper Papers Most households in onecommunity; chain shoppers cancover a metro area
Neighborhood retailers andservice businesses
Phone Directories Geographic area or occupational field served by thedirectory
All types of goods and service-oriented retailers
Direct Mail Controlled by the retailer New and expanding firms, thoseusing coupons or special offers,mail order
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Advertising MediaAdvertising Media
Comparison ChartComparison Chart
Medium Market Coverage Particular Suitability
Radio Definable market areasurrounding the station
Retailers focusing on identifiablesegments
TV Definable market areasurrounding the station
Retailers of goods and serviceswith wide appeal
World Wide Web Global All types of goods and service-oriented retailers
Transit Urban or metro community
served by transit system
Retailers near transit routes,
especially those appealing tocommuters
Outdoor Entire metro area or singleneighborhood
Amusement and tourist-orientedretailers, well-known firms
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Advertising MediaAdvertising Media
Comparison ChartComparison Chart
Medium Market Coverage Particular Suitability
National Magazines Nationwide National chains
Local Magazines Entire metro area or region,zoned editions sometimesavailable
Restaurants, entertainment-oriented firms, specialty shops,mail-order firms
Flyers/ Circulars Single neighborhood Restaurants, dry cleaners,service stations, and otherneighborhood firms
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NewspaperewspaperAdvertisingdvertising
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Yellow PagesYellow Pages
The average consumerlooks at: 4.32 ads.
70% of consumers look at
the bigger ads when they arenot sure where to make apurchase.
65% of consumers feel thata large ad signifies a
business with an establishedreputation.
83% of consumers startlooking at ads in thebeginning of a heading.
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Direct MailDirect Mail
http://www.rama-nrf.org/content/default.asp?folder=rac/rac2005&file=rac05directMail.htm&bhcp=1
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Television AdsTelevision Ads
http://www.mathisbrothers.com/ads/television.html
http://208.254.2.73/media/OfficeMax_ThePartysOver_112k.wmv
http://208.254.2.73/media/target_clip3_512k.wmv
http://208.254.2.73/media/BigLots_512k.wmv
http://www.advertisementave.com/
http://www.visit4info.com/coolads.cfm
http://www.infomercialindex.com/index.html
http://www.rama-nrf.org/content/default.asp?folder=rac/rac2005&file=rac05directMail.htm&bhcp=1http://www.rama-nrf.org/content/default.asp?folder=rac/rac2005&file=rac05directMail.htm&bhcp=1http://www.rama-nrf.org/content/default.asp?folder=rac/rac2005&file=rac05directMail.htm&bhcp=1http://www.mathisbrothers.com/ads/television.htmlhttp://208.254.2.73/media/OfficeMax_ThePartysOver_112k.wmvhttp://208.254.2.73/media/target_clip3_512k.wmvhttp://208.254.2.73/media/BigLots_512k.wmvhttp://www.advertisementave.com/http://www.visit4info.com/coolads.cfmhttp://www.infomercialindex.com/index.htmlhttp://www.infomercialindex.com/index.htmlhttp://www.visit4info.com/coolads.cfmhttp://www.advertisementave.com/http://208.254.2.73/media/BigLots_512k.wmvhttp://208.254.2.73/media/target_clip3_512k.wmvhttp://208.254.2.73/media/OfficeMax_ThePartysOver_112k.wmvhttp://www.mathisbrothers.com/ads/television.html -
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Billboards/Outdoor AdsBillboards/Outdoor Ads
On average, a billboard is only viewed for 7 seconds!
A good rule is to use about 8 to 10 words in your entire ad!
Your message must be very short so it can be easily read by the people driving60 to 75 miles per hour by your sign.
Measured and priced in gross rating points(GRP) - the total number of postings in amarketing schedule versus the population. TheGRP is calculated by dividing the traffic countby the population .
Billboards are typically purchased as 25, 50,75, or 100 GRP (showings). For example, if
you want a 50 GRP (showing), than 50% of thepopulation should see your billboards every
single day.
Retail billboard winners
REI 1
REI 2
StaplesLibrary of billboard ads: http://www.oaaa.org/creativelibrary/
http://www.rama-nrf.org/content/rac/rac2005/images/awards/billboard/BillBoardC.jpghttp://www.rama-nrf.org/content/rac/rac2005/images/awards/billboard/BillBoardB.jpghttp://www.rama-nrf.org/content/rac/rac2005/images/awards/billboard/BillBoardD.jpghttp://www.oaaa.org/creativelibrary/http://www.oaaa.org/creativelibrary/http://www.rama-nrf.org/content/rac/rac2005/images/awards/billboard/BillBoardD.jpghttp://www.rama-nrf.org/content/rac/rac2005/images/awards/billboard/BillBoardB.jpghttp://www.rama-nrf.org/content/rac/rac2005/images/awards/billboard/BillBoardC.jpg -
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Radio AdvertisingRadio Advertising
Retailers spent $72.2 million onmetropolitan commercial radio
advertising in the first six months of2005
NTRA Radio Ad Mt Sinai Medical Center Ad
http://www.oaaa.org/creativelibrary/http://www.oaaa.org/creativelibrary/http://www.oaaa.org/creativelibrary/http://www.oaaa.org/creativelibrary/http://www.oaaa.org/creativelibrary/http://www.oaaa.org/creativelibrary/http://www.oaaa.org/creativelibrary/http://www.oaaa.org/creativelibrary/http://var/www/apps/conversion/current/tmp/scratch11095///homedir/users/astanton/retail/NTRA.mp3http://var/www/apps/conversion/current/tmp/scratch11095///homedir/users/astanton/retail/MtSinai.mp3http://var/www/apps/conversion/current/tmp/scratch11095///homedir/users/astanton/retail/MtSinai.mp3http://var/www/apps/conversion/current/tmp/scratch11095///homedir/users/astanton/retail/NTRA.mp3 -
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Magazine AdvertisementsMagazine Advertisements
Parisian Ad
http://var/www/apps/conversion/current/tmp/scratch11095///homedir/users/astanton/retail/MtSinai.mp3http://var/www/apps/conversion/current/tmp/scratch11095///homedir/users/astanton/retail/MtSinai.mp3http://www.rama-nrf.org/content/rac/rac2005/images/awards/printCamp/PrintCampaignBronze.jpghttp://www.rama-nrf.org/content/rac/rac2005/images/awards/printCamp/PrintCampaignBronze.jpg -
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Flyers/CircularsFlyers/Circulars
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Media SelectionMedia Selection
Coverage maximum number of consumersin the retailers target market
Reach actual total number of targetcustomers who come into contact with the admessage
Frequency average number of times eachperson who is reached is exposed to the adduring a given time period
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Planning a Cooperative StrategyPlanning a Cooperative Strategy
What ads qualify, in terms of merchandise and specialrequirements?
What percentage of advertising is paid by each party?
When can ads be run? In what media?
Are there special provisions regarding message content?
What documentation is required for reimbursement?
How does each party benefit?
Do cooperative ads obscure the image of individual retailers?
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Scheduling Retail AdsScheduling Retail Ads
Ads should appear on (or slightly precede) the days whencustomers most likely to purchase
Ads should be concentrated around the times when people
receive their payroll checks
If funds are limited, concentrate ads during periods of highestdemand
Ads should be timed to appear during time of say or day ofweek when the best cost-per thousand for the target market((cost of ad/number of people in the target market viewing thead) x 1000)
The higher the degree of habitual purchasing of a product class,
the more the advertising should precede the purchase time.
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Personal SellingPersonal Selling
Oral communication with one or moreprospective customers for the purposeof making a sale
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Personal SellingPersonal Selling
Advantages
Message can be adapted
Many ways to meetcustomer needs
High attention span
Less waste
Better response
Immediate feedback
Disadvantages
Limited number of
customers handled at onetime
High costs
Doesnt get customer instore
Self-service discouraged Negative attitudes toward
salespeople (aggressive,unhelpful)
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Types of Sales PositionsTypes of Sales Positions
Order-taker
versus
Order-getter
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Selected Reasons WhySelected Reasons Why
Retail Sales Are LostRetail Sales Are Lost
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Sales PromotionSales Promotion
Encompasses the paid communicationactivities other than advertising, public
relations, and personal selling thatstimulate consumer purchases anddealer effectiveness
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Sales PromotionsSales Promotions
Advantages
Eye-catching appeal
Distinctive themes andtools
Additional value forcustomer
Draws customer traffic
Maintains customerloyalty
Increases impulsepurchases
Fun for customers
Disadvantages
Difficult to terminate
Possible damage to
retailers image More stress on
frivolous selling points
Short-term effects only
Used as a supplement
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Types of Sales PromotionsTypes of Sales Promotions
htt ://www.sca romotions.com/index. h
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Advantages of CouponsAdvantages of Coupons
Manufacturers may pay to advertise and redeem them windfall to retailers since they generally receive 10-cent couponhanding fee ($500 million + in 2002)
99% of consumers redeem coupons at least once during theyear (but only 2% of all coupons redeemed)
People may forget coupon but buy anyway
They contribute to the consumers perception of getting a goodvalue
Coupon redemption can serve as a measure of advertising
effectiveness
http://www.scapromotions.com/index.phphttp://www.scapromotions.com/index.phphttp://www.scapromotions.com/index.phphttp://www.scapromotions.com/index.phphttp://www.scapromotions.com/index.phphttp://www.scapromotions.com/index.phphttp://www.scapromotions.com/index.phphttp://www.scapromotions.com/index.phphttp://www.scapromotions.com/index.phphttp://www.scapromotions.com/index.phphttp://www.scapromotions.com/index.phphttp://www.scapromotions.com/index.phphttp://www.scapromotions.com/index.phphttp://www.scapromotions.com/index.phphttp://www.scapromotions.com/index.phphttp://www.scapromotions.com/index.phphttp://www.scapromotions.com/index.php -
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Procedures for Setting aProcedures for Setting a
Promotional BudgetPromotional Budget
All-you-can-afford method
Incremental method
Competitive parity method
Percentage-of-sales method
Objective-and-task method
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Promotion and thePromotion and the
Hierarchy of EffectsHierarchy of Effects
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