sales promotion - week #4 retail sales promotion review: to whom am i selling? retail sales...
TRANSCRIPT
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Sales Promotion - Week #4Retail Sales Promotion
• Review: To Whom am I Selling?
• Retail Sales Promotion
• Quiz on Chapter 3
• Present Target Profiles and Features & Benefits to Class
• Meet one-on-one, continue working on projects
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Understanding Consumers: Demographics
• “Hard” data such as:– Age– Gender– Race– Level of Education– Income– Marital status
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Understanding Consumers: Psychographics
• Emotional, stylistic, opinions– Activities (hobbies, sports, etc.)– Price consciousness– Lifestyles– Patterns of usage (how much/how often do you
buy?)
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Consumer Groups
• “Catch-all” groups that represent average sets of demographics and psychographics
• Example: Young Contemporary– Fashion emulation, not leadership– Clothes as self-expression– Quality not important– Shop ‘til they drop
• Demographics and psychographics of the Young Contemporary group?
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Target Profiles – Positioning Statement+
• Detailed profiles of your typical consumers.• (Sample) Natural Products Consumer:
– Age: 35
– Sex: Female
– Household Income: $80K
– Married: Yes
– Typical stores: Whole Foods, Trader Joe’s
– Status: Rising
– Price conscious: Somewhat
– Magazines: Martha Stewart
– Consumer Group: Classic
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Retail Sales Promotion• Why Promote?
– Awareness– Interest– Desire– Action
• External Factors– Seasons– Holidays– Events– Sales Cycle– Competition
• Other Factors– Historical Factors
– Sales Goals
– Flavor of the Week
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Benefits of Promotion
• Control and anticipate– Sales– Expenses
• Control inventory
• Project image
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Considerations: Desired Image
• Name
• Logo
• Style
• Features and Benefits– Product– Store
• Price Points
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Considerations: Reach and Cost
• Reach– Who will see it
• Cost– What it will cost– CPM: Cost per thousand
• Examples– Superbowl: $2.4-2.5 Million for 2006 30-sec.
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Other considerations
• Coordination– The story of this course– All elements must support each other!
• Creativity– Deliver the message in an engaging way– Must stand out
• We see thousands of messages every day
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Budgeting
• Sales Promotion Appropriation– The amount of money spent on sales promotion– Typically 1.5% - 6% of net sales
• Top-to-Bottom Method– Overall budget is created and allocated to various
divisions
• Bottom-to-Top Method– Promotional funding is determined by each division
• All-you-can-afford– Based on other limitations/needs
• Today’s Reality: A combination
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Other Promotional Costs
• Payroll
• Supplies
• Postage & Printing
• Travel
• Miscellaneous
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Planning the Calendar
Promotion Schedule
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Planning the Calendar: Needs
• A list of national holidays & local events
• Last year’s calendar
• Historical sales and promotion expenses
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Planning the Calendar: Create the Budget
• Monthly sales goals– Use last year’s sales as guide
• Needed promotion– As percentage of Sales Goals
– Other factors
• Reserve budget– 10-20%
• Allocation– Divided among various activities
– Don’t forget other expenses
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Planning the Calendar: The Calendar!
• Use the allocation to determine:– Media buys– Displays– Events– Etc.
• Create daily plan
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Case Study: Country Junction
Furniture Gifts
Home Decor Building Materials Lawn & Garden
Seasonal
Hardware & Tools Pets & Pet Supplies
Flooring Rental Equipment
Kitchen & Bath Paint Center
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Country Junction 2002 Calendar of EventsJanuary 5-20: Storewide Sidewalk SaleMarch 23&24 Pictures with the Easter
BunnyMarch 23: Free Easter Egg HuntMarch 29 & 30: Free Easter Egg Hunts,
Pictures with the Easter BunnyMay 4: Flea Market –Open Sat & Sun
through Sept. 14May 22: Lobster Feast (private party by
invitation only for top 500 customers)May 27: Happy Memorial Day! OPEN 9-
5July 4: Happy Independence Day! OPEN
9-5September 2: Happy Labor Day! OPEN
9-5September 15: Annual Yard saleSeptember 22: Car Show
Sept 28-Oct 31: The Great Pocono Pumpkin Festival
September 28: Fright Night
October 4&5: Fright Night
October 11&12: Fright Night
October 18&19: Fright Night
October 25&26: Fright Night
November 9: Annual Public Auction
November 23: Santa Claus Arrives! Pictures with Santa 11-4
Nov. 23&24: Pictures with Santa 11-4
Nov 29&30: Pictures with Santa 11-4
Dec 1,7,8,15,16 Pictures with Santa 11-4
Dec 22 & 23 Pictures with Santa 11-4
December 24: Christmas Eve Close at 3pm
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Drawbacks of Promotion
• Variability is painful!– Inconsistent ordering/production– Train customers to wait for sales– Extra expenses (e.g. overtime) can be high– Customers may go to competition
• Retail Promotion is a Slippery Slope!
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Solution: EDLP
• Every Day Low Price– Walmart– Trader Joe’s– Warehouse Clubs
• Reduce Variability
• Train customers– Shop anytime– Build trust
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Price Protection
• Same item advertised at lower price– Within 30 days– Bring in ad– Receive difference
• Often with a 10% bonus
• Retailers can “cheat”!– Similar models with different numbers
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Automatic Price Protection
• They look for other ads
• Automatically send you a check!
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APP Followup
• Tweeter was committed to APP
• In 2002, reconsidered– They had reimbursed $780,000– 5% of consumers used regular PP (RPP)– Under RPP, would have reimbursed $48,000!– Plus, many people didn’t understand APP
• Or care?!
• Ended APP program
• Used same money for other promotion
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Break
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Video: Buy-ology
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Product Presentations
• Product Name/Description
• Market Positioning
• Target Profiles
• Features vs. Benefits
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HOMEWORK:
• Read Chapter 4 (Advertising Department)
• Refine:– Product concept/description.– Product Name– Positioning statement– 3-5 Target Profiles– Features vs. Benefits– Logo References– Finish Logo
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Preview of Next Week
• Project Review– Show me what you’ve done– Must be up to date
• See previous slide
• Packaging