2 nd face-to-face meeting pjj
DESCRIPTION
2 nd FACE-TO-FACE MEETING PJJ. MGM 4254 JULY 2010. Overview. Step 1: investigate alternative trading areas Step 2: determine what type of location is desirable Step 3: select the general location Step 4: evaluate alternative specific store sites. Chpt 9 Trading-Area Analysis. - PowerPoint PPT PresentationTRANSCRIPT
2nd FACE-TO-FACE MEETINGPJJ
MGM 4254JULY 2010
Overview
Step 1: investigate alternative trading areas
Step 2: determine what type of location is desirable
Step 3: select the general locationStep 4: evaluate alternative specific
store sites
Chpt 9Trading-Area Analysis
To demonstrate the importance of store location for a retailer and outline the process for choosing a store location
To discuss the concept of a trading area and its related components
To show how trading areas may be delineated for existing and new stores
Criteria to consider include
population size and traitscompetitiontransportation accessparking availabilitynature of nearby storesproperty costslength of agreementlegal restrictions
Choosing a Store Location
Step 1: Evaluate alternate geographic (trading)areas in terms of residents and existing retailers
Step 3: Select the location type
Step 2: Determine whether to locate as anisolated store or in a planned shopping center
Step 4: Analyze alternate sites contained in the specific retail location type
Figure 9.5 The Segments of a Trading Area
Table 9.1 Chief Factors to Consider in Evaluating Retail Trading Areas
• Total size and density• Age distribution• Average educational
level• Percentage of residents
owning homes
• Total disposable income• Per capita disposable
income• Occupation distribution• Trends
Population Size and Characteristics
Figure 9.8 Analyzing
Retail Trading Areas
Chp 10Site Selection
To thoroughly examine the types of locations available to a retailer: isolated store, unplanned business district, and planned shopping center
To note the decisions necessary in choosing a general retail location
To describe the concept of one-hundred percent locationTo discuss several criteria for evaluating general retail
locations and the specific sites within them To contrast alternative terms of occupancy
3 Types of Locations
IsolatedStore
PlannedShopping
Center
UnplannedBusinessDistrict
Isolated Stores
Advantages* No competition* Low rental costs* Flexibility* Good for
convenience stores
* Better visibility* Adaptable
facilities* Easy parking
Disadvantages* Difficulty attracting
customers* Travel distance* Lack of variety for
customers* High advertising
expenses* No cost sharing* Restrictive zoning
laws
Unplanned Business Districts
Central BusinessDistrict
SecondaryBusinessDistrict
NeighborhoodBusinessDistrict
StringDistrict
Planned Shopping Centers
Advantages* Well-rounded assortments* Strong suburban
population* One-stop, family shopping* Cost sharing* Transportation access* Pedestrian traffic
Disadvantages* Limited flexibility* Higher rent* Restrictions on offerings* Competitive environment* Requirements for
association memberships* Too many malls* Domination by anchor stores
Figure 10.7 Location/ Site
Evaluation Checklist
Chp 11 Retail Organization and Human Resource Management
To study the procedures involved in setting up a retail organization
To examine the various organizational arrangements utilized in retailing
To consider the special human resource environment of retailing
To describe the principles and practices involved with the human resource management process in retailing
Figure 11.1 Planning and Assessing a Retail Organization: Factors to Consider
Figure 11.1 Planning and Assessing a Retail Organization: Factors to Consider
Figure 11.1 Planning and Assessing a Retail Organization: Factors to Consider
Figure 11.3 Division of Tasks in a Distribution Channel
Grouping Tasks into JobsTASKS JOBS
Displaying merchandise, customer contact, gift wrapping, customer follow-up
Sales personnel
Entering transaction data, handling cash and credit purchases, gift wrapping
Cashier
Receiving merchandise, checking incoming shipments, marking merchandise, inventory storage and control, returning merchandise to vendors
Inventory personnel
Window dressing, interior display setups, use of mobile displays Display personnel
Billing customers, credit operations, customer research Credit personnel
Merchandise repairs and alterations, complaint resolution, customer research
Customer service personnel
Cleaning store, replacing old fixtures Janitorial personnel
Personnel management, sales forecasting, budgeting, pricing, coordinating tasks
Management personnel
Figure 11.4 A Job Description for a Store Manager
Table 11.1 Principles for Organizing a Retail Firm
Show interest in employees Monitor employee turnover, lateness, and absenteeism Trace line of authority from top to bottom Limit span of control Empower employees Delegate authority while maintaining responsibility Acknowledge need for coordination and
communication Recognize the power of informal relationships
Figure 11.5 Different Forms of Retail Organization
Figure 11.5 Different Forms of Retail Organization
Figure 11.5 Different Forms of Retail Organization
Figure 11.5 Different Forms of Retail Organization
Figure 11.6 Organization Structures Used by Small Independents
Figure 11.7 The Basic
Mazur Organization
Plan for Department
Stores
Figure 11.8 The
Equal-Store Organizational
Format Used by Chain Stores
Human Resource Management in Retailing
RecruitingSelectingTrainingCompensatingSupervising
Chp 12Operations Management: Financial Dimensions
To define operations managementTo discuss profit planningTo describe asset management, including the
strategic profit model, other key business ratios, and financial trends in retailing
To look at retail budgetingTo examine resource allocation
Major Components of a Profit-and-Loss Statement
• Net Sales• Cost of Goods Sold• Gross Profit (Margin)• Operating Expenses• Taxes• Net Profit After Taxes
Net Sales $330,000CGS $180,000Gross Profit $150,000Operating Expenses
$ 95,250
Other Costs $ 20,000Total Costs $115,250Net Profit before Taxes
$ 34,750
Taxes $ 15,500Net Profit after Taxes
$ 19,250
Asset Management
The Balance Sheet– Assets– Liabilities– Net Worth– Net Profit Margin– Asset Turnover– Return on Assets– Financial Leverage
Financial Trends in Retailing
Slow growth in U.S. economyFunding sourcesMergers, consolidations, spinoffsBankruptcies and liquidationsQuestionable accounting and financial
reporting practices
Budgeting
Budgeting outlines a retailer’s planned expenditures for a given time based on expected performance
Costs are linked to satisfying target market, employee, and management goals
Budget Benefits
Expenditures are related to expected performance Costs can be adjusted as goals are revised Resources are allocated to the right areas Spending is coordinated Planning is structured and integrated Cost standards are set Expenditures are monitored during a budget cycle Planned budgets versus actual budgets can be compared Costs/performance can be compared with industry
averages
Cost Categories
Capital expendituresFixed costsDirect costsNatural account expenses
Resource Allocation
• Capital Expenditures– Long-term
investments in fixed assets
• Operating Expenditures– Short-term selling
and administrative costs in running a business
Chp 13Operations Management: Operational Dimensions
To describe the operational scope of operations management
To examine several specific aspects of operating a retail business: operations blue-print; store format, size, and space allocation; personnel utilization; store maintenance, energy management, and renovations; inventory management; store security; insurance; credit management; computerization; outsourcing; and crisis management
Operational Decisions
What operating guidelines are used?What is the optimal format and size of a
store? What is the relationship among shelf space, shelf location, and sales for each item in the store?
How can personnel be matched to customer traffic flows? Would increased staffing improve or reduce productivity? What impact does self-service have on sales?
Operational Decisions_2
What effect does the use of various building materials have on store maintenance? How can energy costs be better controlled? How often should facilities be renovated?
How can inventory best be managed?How can the personal safety of shoppers
and employees be ensured?
Operational Decisions_3What levels of insurance are required?How can credit transactions be managed most
effectively?How can computer systems improve operating
efficiency?Should any aspects of operations be
outsourced?What kind of crisis management plans should
be in place?
Operating A Retail Business
Operations Blueprint Store Format, Size, and Space Allocation Personnel Utilization Store Maintenance, Energy Management, and Renovations Inventory Management Store Security Insurance Credit Management Computerization Outsourcing Crisis Management
Inventory Management Decisions
How can handling of merchandise from different suppliers be coordinated?
How much inventory should be on the sales floor versus in a warehouse or storeroom?
How often should inventory be moved from nonselling to selling areas of a store?
What inventory functions can be done during nonstore hours? What are the trade-offs between faster supplier delivery and higher
shipping costs? What supplier support is expected in storing merchandise or setting up
displays? What level of in-store merchandise breakage is acceptable? Which items require customer delivery? When? By whom?
Credit Management Decisions
What form of payment is acceptable?Who administers the credit plan?What are customer eligibility requirements
for a check or credit purchase?What credit terms will be used?How are late payments or nonpayments to
be handled?
Crisis Management
There should be contingency plans for as many different types of crisis situations as possible
Essential information should be communicated to all affected parties as soon as the crisis occurs
Cooperation – not conflict – among the involved parties is essential
Responses should be as swift as feasible The chain of command should be clear and decision
makers given adequate authority
Chp 14Developing Merchandise Plans
• To demonstrate the importance of a sound merchandising philosophy
• To study various buying organization formats and the processes they use
• To outline the considerations in devising merchandise plans: forecasts, innovativeness, assortment, brands, timing, and allocation
• To discuss category management and merchandising software
Merchandising
Activities involved in acquiring particular goods and/or services and making them available at the places, times, and prices and in the quantity that enable a retailer to reach its goals.
Merchandising Philosophy
• Sets the guiding principles for all the merchandise decisions that a retailer makes
• Should reflect – Target market desires– Retailer’s institutional type– Market-place positioning– Defined value chain– Supplier capabilities– Costs– Competitors– Product trends
Scope of Responsibility
• Full array of merchandising functions– Buying and selling – Selection, pricing, display, customer transactions
• Focus on buying function only
Functions Performed
• Merchandising view– All buying and selling functions
• Assortments• Advertising pricing• Point-of-sale displays• Employee utilization• Personal selling approaches
Functions Performed• Buying view
– Buyers manage buying functions• Buying• Advertising• Pricing
– In-store personnel manage other functions• Assortments• Point-of-sale displays• Employee utilization• Personal selling approaches
Figure 14.4 Merchandising
Versus Store Management Career Tracks
Figure 14.5 Considerations in Devising Merchandise Plans
Types of Merchandise
• Staple merchandise• Assortment merchandise• Fashion merchandise• Seasonal merchandise• Fad merchandise
Table 14.1a Factors to Bear in Mind When Planning Merchandise Innovativeness
FACTOR RELEVANCE for PLANNING
Target market(s) Evaluate whether the target market is conservative or innovative
Goods/ service growth potential
Consider each new offering on the basis of rapidity of initial sales, maximum sales potential per time period, and length of sales life
Fashion trends Understand vertical and horizontal fashion trends, if appropriate
Retailer image Carry goods/ services that reinforce the firm’s image
Table 14.1b Factors to Bear in Mind When Planning Merchandise Innovativeness
FACTOR RELEVANCE for PLANNING
Competition Lead or follow competition in the selection of new goods/services
Customer segments Segment customers by dividing merchandise into established-product displays and new-product displays
Responsiveness to consumers
Carry new offerings when requested by the target market
Amount of investment
Consider all possible investment for each new good/service: product costs, new fixtures, and additional personnel
Table 14.1c Factors to Bear in Mind When Planning Merchandise Innovativeness
FACTOR RELEVANCE for PLANNING
Profitability Assess each new offering for potential profits
Risk Be aware of the possible tarnishing of the retailer’s image, investment costs, and opportunity costs
Constrained decision making
Restrict franchisees and chain branches from buying certain items
Declining goods/ services
Delete older goods/services if sales and/or profits are too low
Structured Guidelines for Pruning Products
• Select items for possible elimination on the basis of declining sales, prices, and profits, appearance of substitutes
• Gather and analyze detailed financial and other data about these items
• Consider nondeletion strategies such as cutting costs, revising promotion efforts, adjusting prices, and cooperating with other retailers
• After making a deletion decision, do not overlook timing, parts and servicing, inventory, and holdover demand
Table 14.2a Factors to Consider When Planning Merchandise Quality
FACTOR RELEVANCE for PLANNING
Target market(s) Match merchandise quality to the wishes of the desired target market(s)
Competition Sell similar quality or different quality
Retailer’s image Relate merchandise quality directly to the perception that customers have of retailer
Store location Consider the impact of location on the retailer’s image and the number of competitors, which, in turn, relate to quality
Table 14.2b Factors to Consider When Planning Merchandise Quality
FACTOR RELEVANCE for PLANNING
Profitability Recognize that high quality goods generally bring greater profit per unit than lesser-quality goods; turnover may cause total profits to be greater for the latter
Manufacturer versus private brands
Understand that, for many, manufacturer brands connote higher quality than private brands
Customer services offered
Know that high-quality goods require personal selling, alterations, delivery, and so on
Personnel Employ skilled, knowledgeable personnel for high-quality merchandise
Table 14.2c Factors to Consider When Planning Merchandise Quality
FACTOR RELEVANCE for PLANNING
Perceived goods/ service benefits
Analyze consumers. Lesser quality goods attract customers who desire functional product benefits; High-quality goods attract customers who desire extended product benefits
Constrained decision making
Face reality. Franchises or chain store managers have limited or no control over products; Independent retailers that buy from a few large wholesalers are limited to the range of quality offered by those wholesalers
Figure 14.9 Retail
Assortment Strategies
Brands
Private(dealer or store)
Manufacturer(national)
Generic
Chp 15Implementing Merchandise Plans
• To describe the steps in the implementation of merchandise plans: gathering information, selecting and interacting with merchandise sources, evaluation, negotiation, concluding purchases, receiving and stocking merchandise, reordering, and re-evaluation
• To examine the prominent roles of logistics and inventory management in the implementation of merchandise plans
Figure 15.1 The Process for Implementing Merchandise Plans
Selecting Merchandise Sources
• Company-owned• Outside, regularly used supplier• Outside, new supplier
Figure 15.4 A Checklist
of Points
to Review in
Choosing Vendors
Concluding Purchases• The retailer takes title immediately on purchase• The retailer assumes ownership after titles are loaded onto
the mode of transportation• The retailer takes title when a shipment is received• The retailer does not take title until the end of a billing cycle,
when the supplier is paid• The retailer accepts merchandise on consignment and does
not own the items. The supplier is paid after merchandise is sold
Reordering Merchandise
• Four critical factors:– Order and delivery time– Inventory turnover– Financial outlays– Inventory versus ordering costs
Performance Goals• Relate costs incurred to specific logistics activities• Place and receive orders as easily, accurately, and
satisfactorily as possible• Minimize the time between ordering and receiving
merchandise• Coordinate shipments from various suppliers• Have enough merchandise on hand to satisfy customer
demand, without having so much inventory that heavy markdowns will be necessary
Performance Goals_2• Place merchandise on the sales floor efficiently• Process customer orders efficiently and in a manner
satisfactory to customers• Work collaboratively and communicate regularly with other
supply chain members• Handle returns effectively and minimize damaged products• Monitor logistics’ performance• Have backup plans in case of breakdowns in the system
Problems Balancing Inventory Levels
• The retailer wants to be appealing and never lose a sale by being out of stock; it does not want to be “stuck” with excess merchandise
• What fad merchandise and how much should be carried?• Customer demand is never completely predictable• Shelf space allocation should be linked to current revenues
Chp 16Financial Merchandise Management
• To describe the major aspects of financial merchandise planning and management
• To explain the cost and retail methods of accounting• To study the merchandise forecasting and budgeting
process• To examine alternative methods of inventory unit
control• To integrate dollar and unit merchandising control
concepts
Financial Merchandise Management
• A retailer specifies which products are purchased, when products are purchased, and how many products are purchased– Dollar control involves planning and monitoring a
retailer’s financial investment in merchandise over a stated period
– Unit control relates to the quantities of merchandise a retailer handles during a stated period
Table 16.1 Handy Hardware Store Profit-and-Loss Statement
Sales $417,460
Less cost of goods sold: $ 44,620
Beginning inventory (at cost) 289,400
Purchases (at cost) 2,600
Transportation charges $336,620
Merchandise available for sale 90,500
Ending inventory (at cost) $246,120
Cost of goods sold $171,340
Gross profit
Less operating expenses:
Salaries $ 70,000
Advertising 25,000
Rental 16,000
Other 26,000
Total operating expenses 137,000
Net profit before taxes $ 34,340
Benefits of Financial Merchandise Plans
• A buyer’s performance is rated. Measures may be used to set standards
• Stock shortages are determined and bookkeeping errors and pilferage are uncovered
• Slow-moving items are classified – leading to increased sales efforts or markdowns
• A proper balance between inventory and out-of-stock conditions is maintained
Inventory Accounting Systems
• The cost accounting system values merchandise at cost plus inbound transportation charges
• The retail accounting system values merchandise at current retail prices
Cost Method of Accounting
• The cost to the retailer of each item is recorded on an accounting sheet and/or is coded on a price tag or merchandise container
• Can be used with physical or book inventories:– Physical inventory – actual merchandise count– Book inventory - recordkeeping
Physical Inventory System
• Ending inventory - recorded at cost – is measured by counting the merchandise in stock at the close of a selling period
• Gross profit is not computed until ending inventory is valued
• Gross profit derived during full merchandise count
Book Inventory System
• Keeps a running total of the value of all inventory on hand at cost at a given time
• End-of-month inventory values can be computed without a physical inventory
• Frequent financial statements can be prepared
Disadvantages of Cost-Based Inventory Systems
• Requires that a cost be assigned to each item in stock
• Do not adjust inventory values to reflect style changes, end-of-season markdowns, or sudden surges of demand
Figure 16.1 Applying FIFO
and LIFO Inventory Methods
Table 16.2 Handy Hardware Store Perpetual Inventory System
Date Beginning-of-Month Inventory
Net Monthly Purchases
Monthly Sales End-of-Month Inventory
7/1/03 $90,500 $40,000 $ 62,400 $68,100
8/1/03 68,100 28,000 38,400 57,700
9/1/03 57,700 27,600 28,800 56,500
10/1/03 56,500 44,000 28,800 71,700
11/1/03 71,700 50,400 40,800 81,300
12/1/03 81,300 15,900 61,200 36,000
TOTAL $205,900 $260,400 (as of 12/31/03)
The Retail Method
• Closing inventory is determined by calculating the average relationship between the cost and retail values of merchandise available for sale during a period
Determining Ending Inventory Value
• 1. Calculating the cost complement• 2. Calculating deductions from retail value• 3. Converting retail inventory value to cost
Table 16.3 Handy Hardware Store, Calculating Merchandise Available for Sale
at Cost and at Retail
At Cost At Retail
Beginning Inventory $ 90,500 $139,200
Net Purchases 205,900 340,526
Additional Markups __ 16,400
Transportation Charges 3,492 __
Total Merchandise Available $299,892 $496,126
Table 16.4 Handy Hardware Store, Computing Ending Retail Book Value
Merchandise available for sale (at retail) $496,126 Less deductions: Sales $422,540
Markdowns 11,634
Employee discounts 2,400
Total deductions 436,574
Ending retail book value of inventory $ 59,552
Table 16.5 Handy Hardware Store, Computing Stock Shortages and Adjusting Retail Book Value
Ending retail book value of inventory $ 59,552
Physical inventory (at retail) 56,470
Stock shortages (at retail) 3,082
Adjusted ending retail book value of inventory $ 56,470
Table 16.6 Handy Hardware Store, Profit-and-Loss Statement
Sales $422,540
Less cost of goods sold:
Total merchandise available for sale
$299,892
Adjusted ending inventory 34,136
Cost of goods sold $265,756
Gross profit $156,784
Less operating expenses:
Salaries $ 70,000
Advertising 25,000
Rental 16,000
Other 28,000
Total operating expenses 139,000
Net profit before taxes $ 17,784
Advantages of the Retail Method
• Valuation errors are reduced when conducting a physical inventory since merchandise value is recorded at retail and costs do not have to be decoded
• Because the process is simpler, a physical inventory can be completed more often
• Profit-and-loss statement can be based on book inventory• Method gives an estimate of inventory throughout the year
and is accepted in insurance claims
Limitations of the Retail Method
• Bookkeeping burden of recording data• Ending book inventory figures correctly computed only if the
following are accurate:– Value of beginning inventory– Purchases– Shipping charges– Markups– Markdowns– Employee discounts– Transfers– Returns– Sales
• Cost complement is an average based on the total cost of merchandise available for sale and total retail value
Figure 16.3 A Checklist to
Reduce Inventory Shortages Due to
Clerical and Handling Errors
Figure 16.6a How Stockouts May Occur
Figure 16.6b How Stockouts May Occur
Figure 16.7 Economic Order Quantity
Chp 17Pricing in Retailing
• To describe the role of pricing in a retail strategy and to show that pricing decisions must be made in an integrated and adaptive manner
• To examine the impact of consumers; government; manufacturers, wholesalers, and other suppliers; and current and potential competitors on pricing decisions
• To present a framework for developing a retail price strategy: objectives, broad policy, basic strategy, implementation, and adjustments
Pricing Options for Retailers
• Discount orientation• At-the-market orientation• Upscale orientation
Figure 17.2 Factors Affecting Retail Price Strategy
Figure 17.5 Specific
Pricing Objectives from
Which Retailers May
Choose
Price Strategy
• Demand-Oriented Pricing• Cost-Oriented Pricing• Competition-Oriented Pricing
Demand-Oriented Pricing
• Psychological pricing– Price-quality association– Prestige pricing
Integration of Approaches to Price Strategy
• If prices are reduced, will revenues increase greatly? (Demand orientation)
• Should different prices be charged for a product based on negotiations with customers, seasonality, and so on? (Demand orientation)
• Will a given price level allow a traditional markup to be attained? (Cost orientation)
• What price level is necessary for a product requiring special costs in purchasing, selling, or delivery? (Cost orientation)
• What price levels are competitors setting? (Competitive orientation)
• Can above-market prices be set due to a superior image? (Competitive orientation)
Figure 17.7 A Checklist of Selected Specific Pricing Decisions
Price Strategy Concepts
• Customary Pricing– Everyday Low Pricing
• Variable Pricing– Yield Management Pricing
• One-Price Policy
• Flexible Pricing– Contingency Pricing
• Odd Pricing• Leader Pricing• Multiple-Unit Pricing• Price Lining
Price Adjustments
• Adaptive mechanism– Markdown– Additional markup– Employee discount
Chp 18Establishing and Maintaining A
Retail Image
• To show the importance of communicating with customers and examine the concept of retail image
• To describe how a retail store image is related to the atmosphere it creates via its exterior, general interior, layout, and displays, and to look at the special case of non-store atmospherics
• To discuss ways of encouraging customers to spend more time shopping
• To consider the impact of community relations on a retailer’s image
Figure 18.2 The Elements of a Retail Image
Figure 18.4 The Elements of Atmosphere
Exterior Planning
• Storefront• Marquee• Store entrances• Display windows• Exterior building height• Surrounding stores and area• Parking facilities
General Interior
• Flooring• Colors• Lighting• Scents• Sounds• Store fixtures• Wall textures• Temperature• Aisle space
• Dressing facilities• In-store transportation
(elevator, escalator, stairs)• Dead areas• Personnel• Merchandise• Price levels• Displays• Technology• Store cleanliness
Allocation of Floor Space
• Selling space• Merchandise space• Personnel space• Customer space
Figure 18.8 How a Supermarket Uses a Straight (Gridiron) Traffic Pattern
Figure 18.9 How a
Department Store Uses a Curving (Free-Flowing) Traffic Pattern
Straight Traffic Pattern
Advantages• An efficient atmosphere is created• More floor space is devoted to product displays• People can shop quickly• Inventory control and security are simplified• Self-service is easy, thereby reducing labor costs
Disadvantages• Impersonal atmosphere• More limited browsing by customers• Rushed shopping behavior
Curving Traffic PatternAdvantages• A friendly atmosphere• Shoppers do not feel rushed• People are encouraged to walk through in any direction• Impulse or unplanned purchases are enhanced
Disadvantages• Possible customer confusion• Wasted floor space• Difficulties in inventory control• Higher labor intensity• Potential loitering• Displays may cost more
Approaches for Determining Space Needs
• Model Stock Approach– Determines floor space necessary to carry and
display a proper merchandise assortment
• Sales-Productivity Ratio– Assigns floor space on the basis of sales or profit
per foot
Interior (Point-of-Purchase) Displays
• Assortment display• Theme-setting display• Ensemble display• Rack display• Case display• Cut case• Dump bin
Online Store ConsiderationsAdvantages• Unlimited space to present product assortments, displays, and information• Can be customized to the individual customer• Can be modified frequently• Can promote cross-merchandising and impulse purchasing• Enables a shopper to enter and exit an online store in a matter of minutes
Disadvantages• Can be slow for dialup shoppers• Can be too complex• Cannot display three-dimensional aspects of products well• Requires constant updating• More likely to be exited without purchase
Chp 19Promotional Strategy
• To explore the scope of retail promotion• To study the elements of retail promotion:
advertising, public relations, personal selling, and sales promotion
• To discuss the strategic aspects of retail promotion: objectives, budgeting, the mix of forms, implementing the mix, and reviewing and revising the plan
Advertising Objectives for Retailers
• Lifting short-term sales• Increasing customer traffic• Developing and/or reinforcing a retail image• Informing customers about goods and services
and/or company attributes• Easing the job for sales personnel• Developing demand for private brands
Figure 19.4 Types of
Advertising
Public Relations Objectives for Retailers
• Increase awareness of the retailer and its strategy mix
• Maintain or improve the company image• Show the retailer as a contributor to the
public’s quality of life• Demonstrate innovativeness• Present a favorable message in a highly
believable manner• Minimize total promotion costs
Personal Selling Objectives for Retailers
• Persuade customers to buy• Stimulate sales of impulse items or products related to
customers’ basic purchases• Complete customer transactions• Feed back information to company decision makers• Provide proper levels of customer service• Improve and maintain customer satisfaction• Create awareness of items also marketed through the Web,
mail, and telemarketing
Figure 19.7 Typical Personal Selling Functions
Sales Promotions Objectives for Retailers
• Increasing short-term sales volume• Maintaining customer loyalty• Emphasizing novelty• Complementing other promotion tools
Figure 19.9 Types
of Sales
Promotions
Promotional 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
Figure 19.14 Promotion and the Hierarchy of Effects