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Retail communications mix


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Retail communications mix

  1. 1. Retail Communications mix
  2. 2. Objectives • The communication program informs the customers about the retailer as well as the merchandise/services • Develops repeat visits and customer loyalty • Have a short and long term effects on retailers business • Can be used to create and maintain a strong differentiation for the retailer and his brands • Image develops customer loyalty and creates strategic advantage • Complements the retailers CRM program
  4. 4. Brand and Brand image • A distinguishing name or symbol such as a logo that identifies the products or services offered by the seller and differentiates those products and services from the offerings of the competitors. Eg Walgreens Aspirin (private brand) • Brand provide value to both customers and retailers • Convey info to consumers about the nature of the shopping experience- the retailers mix- they will encounter when patronizing a retailer • Affect customers confidence in purchase decisions • Enhances customer satisfaction with the merchandise/services they buy. Eg Buying jewelry from local jeweller than from branded outlet.
  5. 5. Brand equity • Value that brand image offers retailers is brand equity • Strong brand names affect- customers decision making process, motivate repeat visits and purchases and build loyalty • Enables retailers to charge higher prices and lower marketing costs • Customer loyalty to brand arises – from increased awareness for the brand and emotional ties to it • Enables retailers to increase their margins. • High customer loyalty- premium pricing • Can use to leverage their brands to new retailer concepts with minimum marketing effort. Eg Toys r us- Babies r us
  6. 6. Building brand equity – for private label brands • Create high level of brand awareness • Develop favorable associations with the brand name • Consistently reinforce the image of the brand
  7. 7. Brand awareness • is the ability of a potential customer to recognize or recall that the brand name is a type of retailer or product/service • It is the strength of the link b/w the brand name and the type of merchandise /service in the minds of the customers • Aided recall: consumers indicate that they know the brand when the name is presented to them • TOM awareness: occurs when the consumer mentions a specific brand name first when they are asked about the type of retailer/merchandise category/type of service. Eg xerox • Retailers build TOM awareness by having memorable names, repeatedly exposing the name through advt and having memorable symbols • Sponsorship of well publicized events can provide exposure and increase awareness
  8. 8. Brand awareness
  9. 9. Brand associations • are anything linked to or connected with the brand name in a consumers memory • Eg french fries,burgers,Ronald Ms Donald: McDonalds • Associations that retailers develop for their brand are as follows - Merchandise category: to link retailer with the category of merchandise office supply: staples - Price/quality: Walmart- low prices - Specific attributes: with attribute such as convenience - Lifestyle/activity For eg: Reading books- Crossword
  10. 10. Consistent Reinforcement • The retailers brand image is developed and maintained through the retailers communication program and other elements of the communication mix- merchandise assortment/pricing, store design, website customer service • to develop a strong association and consistent brand image – retailer needs to be consistent in portraying the same message to customers over time and in all elements of marketing mix • Through an IMC: A program that integrates all communications elements to deliver a strong consistent message. • For eg TV ad for retailer may emphasize customer service ,where as sales promotional emphasizes low prices- wrong
  11. 11. Retailers communicate with customers thro.. • Advertising • Sales promotion • Publicity • Store atmosphere • Visual merchandising • Personal selling
  12. 12. Methods of communicating with Customers Advt Sales promotion Store atmosphere Website Personal selling Email Publicity Word of mouth IMPERSONAL PERSONAL PAIDUNPAID
  13. 13. Paid Impersonal communication • Advt: form of paid communication to customers using impersonal mass media such as newspapers, TV, radio,di rect mail and the internet
  14. 14. Paid Impersonal communication • Sales promotion: offer extra value and incentives to customers to visit a store or purchase merchandise during a specific period of time • Use in store demos, offer free samples of merchandise to build excitement and stimulate purchases • Eg fashion shows,cooking demos
  15. 15. Paid Impersonal communication • Contests: promotional games of chance • Eg with major films and sports events
  16. 16. Paid Impersonal communication • Coupons: offer a discount on the price of specific items when they are purchased at the store. • Used by supermarkets and distributed through the newspapers
  17. 17. Paid Impersonal communication • Store atmosphere: Reflects the combination of stores physical characteristics such as architecture, layout, signs, displays, color, lighting sounds which create an image in the customers mind • communicates info about the store services pricing and merchandise
  18. 18. Paid Impersonal communication • Website: use to build brand image, inform customers abt store locations, special events, merchandise availability and sell merchandise and services
  19. 19. Paid/un paid Personal Communications • Personal selling: sales people help customers • E mail: used to inform customers of new merchandise, confirm the receipt of an order, and indicate when an order has been shipped. • Publicity: through significant unpaid presentations about the retailer ,usually a news story in impersonal media • Word of mouth : if favorable can affect the store sales
  20. 20. Comparison of communication methods CONTROL FLEXIBILITY CREDIBILITY COST Paid Impersonal Mass media advt High Lowest Lowest Modest Direct mail Highest High Low Modest Sales promotion High Low Modest Store atmosphere High Low Modest Website High Modest Low Modest Paid Personal Sales person Modest Highest Low Highest Email Highest High Low Low Unpaid impersonal Publicity Low Low High Low Unpaid personal Word of mouth Low Low High Lowest
  22. 22. Steps in developing a retail communications program Establish objectives • Positioning • Sales goal • Communication objectives Determine budget • Marginal analysis • Objective and task • Rules of thumb Allocate budget Implement and evaluate program
  23. 23. Establish objectives • Provides direction for people implementing the program • a basis for evaluating its effectiveness • Long term objectives: creating/altering retailers brand image • Short term objectives: increasing store traffic on holiday weekends • Communication objectives: are specific goals related to the communication mix`s effects on customers decision making process • To effectively implement and evaluate a communications program, the objectives must be clearly stated in quantitative terms. The TG for the communication mix needs to be defined ,along with the degree of change expected and the time period over which the change will be realized • For eg communication objective for a supermarket can be to increase from a 45% to 55% within 3 months the % age of customers having a favorable attitude towards the store.- here the objective is clear and measurable, indicates the task the program should address. People who implement this program thus know what they are supposed to accomplish
  24. 24. Establish objectives • The communication objectives and approaches for retailers and vendors differ • Some potential conflicts are - Long term vs short term goals: most commn done by vendors are directed towards building a long term image of the product. Retailers whereas use only for short term goals to announce sales and special offers - Product vs location: When vendors advt their brands, they don’t care from where the customer buys them, whereas retailer don’t care what brands customer buys, as long as they buy from them - Geographic coverage: People tend to shop at stores close to home/workplace, retailers use local newspaper, TV, radio to target their communication. Vendors use national media - Breadth of merchandise: vendors- small no to promote, retailers – wide choice - Eg vendor and retailer work together- Walmart- Coppertone tie up
  25. 25. Setting the communication budgets • Many use marginal analysis: is the approach which retailers should use when making all of the resource allocation decisions, including the no of locations in a geographic area, the allocation of merchandise to stores, the staffing of stores and the floor/shelf space devoted to merchandise categories • Marginal analysis is based on the economic principle that firms should increase communication expenditures as long as each additional dollar spent generates more than a dollar of additional contribution
  26. 26. Setting the communication budgets • Objective and task method: determines the budget required to undertake specific tasks to accomplish communication objectives • To use this method ,the retailer first establishes a set of communication objectives , and then determines the necessary tasks and costs • The total of all costs incurred to undertake the tasks is the communication budget
  27. 27. Objective and task method- Eg • Objective: Increase the % age of target market (working women living or working within 10 miles of our store) who know of our stores location and that it sells women's business attire from 25% to 50% over the next 12 months • Task: 480,30 s radio spots during peak commuting hours- Rs 12 L • Task : Sign with store name near entrance to mall: Rs 5000 • Task : Display ad in yellow pages: Rs 10000 and so on • Total budget:
  28. 28. Rule of thumb method • Using past sales and communication activities to determine the present communication budget Methods used - Affordable budgeting method: sets the communication budget by determining what money is available after operating costs and profits are subtracted - % age of sale method: as a fixed % age of forecasted sales - Competitive parity method: the communication budget is set so that the retailers share of communication expenses equals its share of market
  29. 29. Allocation of Promotional budget • Retailer decides how much of an budget to allocate to specific communication elements, merchandise categories, geographic regions or long/short term objectives • Use the principles of marginal analysis
  31. 31. IMPLEMENTING RETAIL ADVT PROGRAM • Developing the advt message • Choosing the specific media to convey the message • Determining the frequency and timing of message
  32. 32. Developing the Advertising message • Most retail advt messages have short life and designed for immediate attention • calls for copywriting style that grabs the readers attention • Suggestions for developing a local ad
  33. 33. Developing the Advertising message • Have a dominant headline: need to feature the principal benefit being offered in the headline along with a reason why consumer should act immediately
  34. 34. Developing the Advertising message • Use a dominant element: large picture or headline. Photos of real people, action photos
  35. 35. Developing the Advertising message • Stick to a simple layout: ads layout should lead the readers eye through the message from the headline to the illustrations and then to copy. Complex elements, decorative borders distract readers attention from the message
  36. 36. Developing the Advertising message • Provide a specific complete presentation: readers look out for info that will help them decide whether to visit the store . Ad must contain all info pertinent to this decision, type of merchandise, brands, price, sizes and colors
  37. 37. Developing the Advertising message • Use easily recognizable art elements: people see countless ads. Clutter breaking ads are easily remembered. Must make it visually distinct by using art/design elements
  38. 38. Developing the Advertising message • Give the stores name: name and location are the two most important aspects of retail ad.
  39. 39. Assistance in advt - Co-op advt: vendor pays half of the retailers advt, but dictates some conditions. • Enables the retailer to increase its advt budget • Can lead to conflict in retailer-vendors goals regarding brand placement/store location - Agencies: to develop ads - Media companies: sell newspaper space, broadcast time, advt planning, market research
  40. 40. Choosing the effective media • medium to communicate the message • Newspaper • Magazines • Direct mail • Radio • Tv • billboards • Internet • Shopping guides • Yellow pages
  41. 41. Newspaper • Display ads • Include preprints or free standing inserts: an advt which is printed at retailers expense and then distributed • useful in targeting retail advt • offer quick response service • effectively convey lot of detailed info • Low cost
  42. 42. Magazines • Local area magazines and regional editions • High lead time for ad submission
  43. 43. Direct mail • use data collected at POS terminals to target the advt and sales promotions to specific customers using direct mail • can also purchase database • Message can be personalized • Costly • many customers ignore it as junk
  44. 44. Television • Commercials can be placed on national/regional channels • called as spots • use it as an opportunity to communicate using image and sound • High production costs • broadcast time is expensive
  45. 45. Radio • messages can be targeted to a specific segment of the market • some audiences are highly loyal of the announcers • low cost • limits attention span
  46. 46. Internet • Banner ads and affiliate programs to generate awareness • Websites to provide info about merchandise and special events • Emails to target customers and messages
  47. 47. Outdoor billboards • effective vehicles for creating awareness • Provide limited info to narrow audience
  48. 48. Considerations in selecting media • Coverage: refers to the number of potential customers in retailers target market that could be exposed to an advt in a given medium • Eg Assume size of tgt mkt is 1,00,000 customers. The local newspaper is distributed to 60% of customers in tgt mkt,90% of local customers subscribe to local cable,5% drive past the billboard. Thus coverage for newspaper would be 60000,TV:90000,billboard: 5000
  49. 49. Considerations in selecting media • Reach: Is the actual no of customers in an tgt mkt exposed to an advt medium. • So if 60% of potential customers who receive the newspaper actually read it,then newspapers reach would be 36000. (60% of 60000) • Cost: Cost per thousand or CPM is used to compare media • Impact: ads effect on the audience
  50. 50. Determining advt frequency and Timing • Determine how often and when customers will see the retailers message • Frequency: how many times a potential customer is exposed to an ad. For eg for internet advt: how many times the webpage with the ad is downloaded • Timing: ad should appear/slightly precede the days consumers are most likely to purchase