Retail: Theory & Practice Retail promotion 1
Learning objectives <ul><li>At the end of this session you will be able to: </li></ul><ul><li>List the main elements of th...
<ul><li>‘ To attract shoppers, a retailer must inform them of the store’s location, the types of merchandise it carries, a...
Promotional objectives <ul><li>Promotional objectives can be aimed at improving: </li></ul><ul><li>Long term performance (...
The retail promotion mix <ul><li>Advertising </li></ul><ul><li>Sales promotion </li></ul><ul><li>Public relations </li></u...
Key elements of the retail marketing communication mix (non-personal) <ul><li>Advertising </li></ul><ul><li>Sales promotio...
Key elements of the retail marketing communication mix (personal) <ul><li>Direct mail (from retailer’s data-base) </li></u...
Elements of a retail identity <ul><li>Promotion  (promotional materials and advertising) </li></ul><ul><li>Product  (desig...
Key retail marketing communication objectives <ul><li>To win new customers </li></ul><ul><li>To retain existing customers ...
The identity prism
Models of advertising process Note: DAGMAR = Defining Advertising Goals for Measuring Advertising Results, and splits the ...
Scale of immediacy (King, 1975, in McGoldrick, p442)  <ul><li>Direct response  see advert, buy off  page/screen </li></ul>...
Effectiveness of promotional mix in influencing  different stages of the buying decision process Awareness Liking, prefere...
To have an effective communication strategy management must have : <ul><li>Profiles of the appropriate segments. </li></ul...
Retail advertising expenditure  by store type   (Source: Retail Pocket Book 2002) 2000 (£000’s) 2001 (£000’s) Supermarket ...
Retail advertising expenditure  selected stores (source: McGoldrick 2002) RETAILER 1996 (£000’s ) 2000 (£000’s ) Sainsbury...
Retail advertising to sales ratios RETAILER 1986 (%) 2000 (%) Asda 0.51 0.21 Boots 0.50 0.31 B & Q 2.16 1.31 M & S - 0.07 ...
Main types of price promotion  <ul><li>Percentage of types of price promotion used </li></ul><ul><li>in a 12 week period (...
PR and Publicity  the publics that may  need to be considered <ul><li>General public : communities, pressure groups </li><...
Positioning  <ul><li>Positioning is communicated by a co-ordinated customer </li></ul><ul><li>communication strategy. It h...
Retail brands/Retailer brands? <ul><li>A complex issue!  </li></ul><ul><li>Retail organisations have developed into powerf...
What is a Brand ? <ul><li>“  a brand is a product, service, or organisation made distinctive by its positioning relative t...
Role of the retail marketing communication mix in developing the retail brand proposition <ul><li>To create (a new retail ...
Seminar / discussion forum <ul><li>Journal article :  </li></ul><ul><li>‘ The role of advertising in brand image developme...
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Week 17 promotion in retailing 1 2010

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  • Each performs a different function, but for best results the different elements of the promotions mix need to be combined appropriately to achieve the promotional objectives.
  • For content &amp; message. In order to provide a framework for the creation of retail advertising, Kapferer presented the concept of an identity prism
  • The basis for most advertising is that behaviour can be affected if the potential customer is presented with information on the existence of a product. Each model above is based on an understanding of the buying behaviour of consumers and how advertising may affect this. The first 3 models assumes the customer moves in order along a scale of commitment to a brand – as they move the probability of them purchasing increases. Advertising tells customers something they don’t know about a product, or converts non-buyers into buyers. Ehrenburg’s (1976) ATR model suggests advertising can be valuable at each stage, but fr mature brands the most important factor is the pattern of repeat buying – so advertising is likely to be defensive to re-inforce the existing repeat buying habits of existing consumers
  • A significant departure from the previous (hierarchy of effects) models was King’s ‘scale of immediacy’ – this suggested alternative roles that advertising could play in helping to stimulate action. His ‘scale of immediacy’ suggested 6 levels of effect
  • Week 17 promotion in retailing 1 2010

    1. 1. Retail: Theory & Practice Retail promotion 1
    2. 2. Learning objectives <ul><li>At the end of this session you will be able to: </li></ul><ul><li>List the main elements of the retail marketing communication (RMC) mix </li></ul><ul><li>Identify key objectives of retail marketing communications </li></ul><ul><li>Comment on the strategic importance of the retail communication mix </li></ul><ul><li>Recognise the importance of the selling environment in marketing communicating </li></ul>
    3. 3. <ul><li>‘ 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.’ </li></ul><ul><li>(Kent & Omar 2003) </li></ul>
    4. 4. Promotional objectives <ul><li>Promotional objectives can be aimed at improving: </li></ul><ul><li>Long term performance (institutional objectives) </li></ul><ul><ul><li>Objectives aimed at image and positioning </li></ul></ul><ul><ul><li>Objectives relating to public service (CSR, goodwill) </li></ul></ul><ul><li>Short term performance (promotional objective) </li></ul><ul><ul><li>Increasing patronage from existing customers </li></ul></ul><ul><ul><li>Attracting new customers (existing or new trade area) </li></ul></ul>
    5. 5. The retail promotion mix <ul><li>Advertising </li></ul><ul><li>Sales promotion </li></ul><ul><li>Public relations </li></ul><ul><li>Personal selling </li></ul><ul><li>Direct marketing (loyalty schemes, database marketing, customer relationship management) </li></ul><ul><li>Location / selling environment </li></ul><ul><li>Visual merchandising </li></ul>
    6. 6. Key elements of the retail marketing communication mix (non-personal) <ul><li>Advertising </li></ul><ul><li>Sales promotion, leaflets etc </li></ul><ul><li>PR/publicity </li></ul><ul><li>Sponsorship </li></ul><ul><li>Packaging </li></ul><ul><li>Location </li></ul><ul><li>Visual merchandising (inc. windows), display In-store signage/graphics </li></ul><ul><li>Store design and atmospherics </li></ul><ul><li>Store layout </li></ul>
    7. 7. Key elements of the retail marketing communication mix (personal) <ul><li>Direct mail (from retailer’s data-base) </li></ul><ul><li>Communication from/to the customer </li></ul><ul><li>Staff conduct </li></ul><ul><li>Customer loyalty programmes </li></ul><ul><li>Internet communications </li></ul><ul><li>Customer to customer communication </li></ul>
    8. 8. Elements of a retail identity <ul><li>Promotion (promotional materials and advertising) </li></ul><ul><li>Product (design and brand mix) </li></ul><ul><li>Presentation (signage, merchandising, packaging, labelling) </li></ul><ul><li>Place (architecture, fascia/logo, interior design) </li></ul><ul><li>People </li></ul>
    9. 9. Key retail marketing communication objectives <ul><li>To win new customers </li></ul><ul><li>To retain existing customers </li></ul><ul><li>To increase expenditure by existing customers </li></ul><ul><li>To increase store traffic </li></ul><ul><li>To increase merchandise sales </li></ul><ul><li>To develop store (retail brand?) image </li></ul><ul><li>To reposition </li></ul>
    10. 10. The identity prism
    11. 11. Models of advertising process Note: DAGMAR = Defining Advertising Goals for Measuring Advertising Results, and splits the process down to the steps listed above AIDA DAGMAR HIERARCHY OF EFFECTS ATR Attention Awareness Awareness Awareness Interest Comprehension Knowledge Trial Desire Conviction Liking Repeat buying Action Action Preference Conviction Purchase
    12. 12. Scale of immediacy (King, 1975, in McGoldrick, p442) <ul><li>Direct response see advert, buy off page/screen </li></ul><ul><li>Seek information see advert find out more </li></ul><ul><li>Relate to needs/ advertise to provoke </li></ul><ul><li>desires “that’s a good idea” response </li></ul><ul><li>4. Reminder role customer reminded of previous satisfaction </li></ul><ul><li>5. Modify attitudes alter a perceived image weakness identified by research </li></ul><ul><li>6. Reinforce attitudes help to prevent the good image fading </li></ul>
    13. 13. 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
    14. 14. To have an effective communication strategy management must have : <ul><li>Profiles of the appropriate segments. </li></ul><ul><li>An awareness of the customer’s state of readiness to purchase </li></ul><ul><li>An understanding of the role of communication in developing strong positioning </li></ul><ul><li>An awareness of the importance of all elements of the (retail) communication mix </li></ul><ul><li>(adapted from Walters and Hanrahan,2002) </li></ul>
    15. 15. Retail advertising expenditure by store type (Source: Retail Pocket Book 2002) 2000 (£000’s) 2001 (£000’s) Supermarket 111 448 111 973 Furniture/furnishings 110 141 109 444 Electrical 85 253 59 529 Telecom 75 205 55 478 DIY 69 910 47 394 Department store 55 022 72 989
    16. 16. Retail advertising expenditure selected stores (source: McGoldrick 2002) RETAILER 1996 (£000’s ) 2000 (£000’s ) Sainsbury’s 20 669 33 293 B & Q 12 073 29 374 PC World 15 850 27 860 Currys 24 073 27 239 DFS 14 666 26 279 Homebase 6 100 25 074 Tesco 15 006 19 532 Asda 14 253 17 787
    17. 17. Retail advertising to sales ratios RETAILER 1986 (%) 2000 (%) Asda 0.51 0.21 Boots 0.50 0.31 B & Q 2.16 1.31 M & S - 0.07 Sainsbury’s 0.20 0.25 Tesco 0.29 0.11
    18. 18. Main types of price promotion <ul><li>Percentage of types of price promotion used </li></ul><ul><li>in a 12 week period (1999) </li></ul><ul><li>Store price reduction 37% </li></ul><ul><li>Multibuy/save 24% </li></ul><ul><li>Manufacturer’s reduction 12% </li></ul><ul><li>Extra quantity in pack 9% </li></ul><ul><li>Loyalty card bonus 2.8% </li></ul><ul><li>Source: Kent and Omar, p423 </li></ul>
    19. 19. PR and Publicity the publics that may need to be considered <ul><li>General public : communities, pressure groups </li></ul><ul><li>Commercial: Customers, suppliers, competitors </li></ul><ul><li>Media: TV, press, trade press </li></ul><ul><li>Internal: Employees, trade unions </li></ul><ul><li>Authority: Local and national government </li></ul><ul><li>Financial: Shareholders, investors, banks </li></ul>
    20. 20. Positioning <ul><li>Positioning is communicated by a co-ordinated customer </li></ul><ul><li>communication strategy. It has 4 important aspects: </li></ul><ul><li>Perception . The key dimensions most relevant to the customer </li></ul><ul><li>Preference. How customers use the perceived dimensions </li></ul><ul><li>Segmentation . One offer for all segments or differentiated offers for each segment </li></ul><ul><li>Choice . The external events that must be controlled to ensure that the customer who prefers the offer actually purchases it. </li></ul><ul><li>(Urban and Hauser in Walters and Hanrahan,2002, page 270) </li></ul>
    21. 21. Retail brands/Retailer brands? <ul><li>A complex issue! </li></ul><ul><li>Retail organisations have developed into powerful brands in their own right </li></ul><ul><li>Retailer brands tend to be regarded as the “own brand” products stocked by many retailers (McGoldrick, 2002,p185) </li></ul>
    22. 22. What is a Brand ? <ul><li>“ 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) </li></ul><ul><li>Positioning : defines the point of reference with respect to the competition </li></ul><ul><li>Personality : Is made up of functional (extrinsic, tangible properties) and symbolic (intrinsic, intangible) attributes </li></ul>
    23. 23. Role of the retail marketing communication mix in developing the retail brand proposition <ul><li>To create (a new retail brand) </li></ul><ul><li>To build (an existing brand) </li></ul><ul><li>To reinforce (a mature brand) </li></ul><ul><li>To rejuvenate/re-launch </li></ul><ul><li>“ to stand out, you need to have a simple proposition which is easy to understand” </li></ul><ul><li>(Davidson H, Offensive Marketing) </li></ul>
    24. 24. Seminar / discussion forum <ul><li>Journal article : </li></ul><ul><li>‘ The role of advertising in brand image development’ </li></ul><ul><li>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 </li></ul>

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