Retail: Theory & Practice

Retail promotion 1

Learning objectives

At the end of this session you will be able to:• List the main elements of the retail marketing

communication (RMC) mix• Identify key objectives of retail marketing

communications• Comment on the strategic importance of the

retail communication mix• Recognise the importance of the selling

environment in marketing communicating

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‘To attract shoppers, a retailer must inform them of the store’s location, the types of merchandise it carries, and the services it provides. It must also persuade consumers that the store can fulfil their shopping expectations and provide them with superior value relative to its competitors. In doing so, retailers must design effective communication programmes to provide information to customers and persuade them to shop at their stores.’

(Kent & Omar 2003)

Promotional objectives

Promotional objectives can be aimed at improving:

• Long term performance (institutional objectives)– Objectives aimed at image and positioning– Objectives relating to public service (CSR, goodwill)

• Short term performance (promotional objective)– Increasing patronage from existing customers– Attracting new customers (existing or new trade area)

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The retail promotion mix

• Advertising• Sales promotion• Public relations• Personal selling• Direct marketing (loyalty schemes, database

marketing, customer relationship management)

• Location / selling environment• Visual merchandising

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Key elements of the retail marketing communication mix (non-personal)

• Advertising• Sales promotion, leaflets etc• PR/publicity• Sponsorship• Packaging • Location • Visual merchandising (inc. windows), display In-store

signage/graphics• Store design and atmospherics• Store layout

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Key elements of the retail marketing communication mix (personal)

• Direct mail (from retailer’s data-base)• Communication from/to the customer• Staff conduct• Customer loyalty programmes• Internet communications • Customer to customer communication

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Elements of a retail identity

• Promotion (promotional materials and advertising)

• Product (design and brand mix)

• Presentation (signage, merchandising, packaging, labelling)

• Place (architecture, fascia/logo, interior design)

• People 8

Key retail marketing communication objectives

• To win new customers• To retain existing customers• To increase expenditure by existing customers• To increase store traffic• To increase merchandise sales• To develop store (retail brand?) image• To reposition

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The identity prism

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Models of advertising process

AIDA DAGMAR HIERARCHY OF EFFECTS

ATR

Attention Awareness Awareness Awareness

Interest Comprehension Knowledge Trial

Desire Conviction Liking Repeat buying

Action Action Preference

Conviction

Purchase

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Note: DAGMAR = Defining Advertising Goals for Measuring Advertising Results, and splits the process down to the steps listed above

Scale of immediacy(King, 1975, in McGoldrick, p442)

1. Direct response see advert, buy off page/screen

2. Seek information see advert find out more3. Relate to needs/ advertise to provoke

desires “that’s a good idea” response

4. Reminder role customer reminded of previous satisfaction

5. Modify attitudes alter a perceived image weakness identified by

research6. Reinforce attitudes help to prevent the good

image fading12

Effectiveness of promotional mix in influencing different stages of the buying decision process

Awareness Liking, preference

Conviction Action

Advertising high mod low low

PR mod low - -

Sales promotion

low low low Mod/high

Personal selling

Very low Mod/high high high

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To have an effective communication strategy management must have :

• Profiles of the appropriate segments.• An awareness of the customer’s state of

readiness to purchase• An understanding of the role of communication in

developing strong positioning• An awareness of the importance of all elements

of the (retail) communication mix(adapted from Walters and Hanrahan,2002)

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Retail advertising expenditure by store type

2000 (£000’s) 2001 (£000’s)Supermarket 111 448 111 973Furniture/furnishings 110 141 109 444Electrical 85 253 59 529Telecom 75 205 55 478DIY 69 910 47 394Department store 55 022 72 989

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(Source: Retail Pocket Book 2002)

Retail advertising expenditure selected stores

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(source: McGoldrick 2002)

RETAILER 1996 (£000’s ) 2000 (£000’s )Sainsbury’s 20 669 33 293B & Q 12 073 29 374PC World 15 850 27 860Currys 24 073 27 239DFS 14 666 26 279Homebase 6 100 25 074Tesco 15 006 19 532Asda 14 253 17 787

Retail advertising to sales ratios

RETAILER 1986 (%) 2000 (%)Asda 0.51 0.21Boots 0.50 0.31B & Q 2.16 1.31M & S - 0.07Sainsbury’s 0.20 0.25Tesco 0.29 0.11

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Main types of price promotion

Percentage of types of price promotion usedin a 12 week period (1999)

• Store price reduction 37%• Multibuy/save 24%• Manufacturer’s reduction 12%• Extra quantity in pack 9%• Loyalty card bonus 2.8%

Source: Kent and Omar, p423

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PR and Publicity the publics that may need to be considered

• General public: communities, pressure groups• Commercial: Customers, suppliers, competitors• Media: TV, press, trade press• Internal: Employees, trade unions• Authority: Local and national government• Financial: Shareholders, investors, banks

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Positioning Positioning is communicated by a co-ordinated customercommunication strategy. It has 4 important aspects:

• Perception. The key dimensions most relevant to the customer

• Preference. How customers use the perceived dimensions• Segmentation. One offer for all segments or

differentiated offers for each segment• Choice. The external events that must be controlled to

ensure that the customer who prefers the offer actually purchases it.

(Urban and Hauser in Walters and Hanrahan,2002, page 270)

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Retail brands/Retailer brands?

• A complex issue!

• Retail organisations have developed into powerful brands in their own right

• Retailer brands tend to be regarded as the “own brand” products stocked by many retailers

(McGoldrick, 2002,p185)

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What is a Brand ?“ a brand is a product, service, or organisation made

distinctive by its positioning relative to the competition and by its personality, a unique combination of functional attributes and symbolic values” (Hankinson and Cowking, 1996)

• Positioning: defines the point of reference with respect to the competition

• Personality: Is made up of functional (extrinsic, tangible properties) and symbolic (intrinsic, intangible) attributes

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Role of the retail marketing communication mix in developing the retail brand proposition

• To create (a new retail brand) • To build (an existing brand)• To reinforce (a mature brand)• To rejuvenate/re-launch

“to stand out, you need to have a simple proposition which is easy to understand”

(Davidson H, Offensive Marketing)

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Seminar / discussion forum

Journal article: ‘The role of advertising in brand image development’

1.The concept of branding is the relationship that the brand forms with the consumer. Discuss this statement in the light of the information provided in the article

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