Chapter 19Promotional StrategyRETAIL MANAGEMENT:A STRATEGICAPPROACH, 9th EditionBERMAN EVANS

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Chapter ObjectivesTo explore the scope of retail promotionTo study the elements of retail promotion: advertising, public relations, personal selling, and sales promotionTo discuss the strategic aspects of retail promotion: objectives, budgeting, the mix of forms, implementing the mix, and reviewing and revising the plan

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Elements of the Promotional MixAdvertisingPublic RelationsPersonal SellingSales Promotion

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Figure 19.1 Communicating Through the Retail Promotion Mix

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AdvertisingPaid, nonpersonal communication transmitted through out-of-store mass media by an identified sponsorKey aspectsPaid formNonpersonal presentationOut-of-store mass mediaIdentified sponsor

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Figure 19.2 Lands Ends Dominant Business : Mail-Order Retailing

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Table 19.1 Selected U.S. Advertising-to-Sales Ratios by Type of Retailer

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Advertising Objectives for RetailersLifting short-term salesIncreasing customer trafficDeveloping and/or reinforcing a retail imageInforming customers about goods and services and/or company attributesEasing the job for sales personnelDeveloping demand for private brands

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AdvertisingAdvantagesAttracts a large audienceGains pass along readership (for print)Low cost per contactMany alternatives availableControl over message content; message can be standardizedMessage study possibleEditorial content surrounds adSelf-service operations possibleDisadvantagesStandardized messages lack flexibilitySome media require large investmentsGeographic flexibility limitedSome media require long lead timeSome media have high throwaway rateSome media limit the ability to provide detailed information

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Table 19.2a Advertising Media Comparison Chart

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Table 19.2b Advertising Media Comparison Chart

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Table 19.2c Advertising Media Comparison Chart

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Figure 19.3 Billboard Advertising for Pedestrians and Motorists

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Figure 19.4 Types of Advertising

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Planning a Cooperative StrategyWhat ads qualify, in terms of merchandise and special requirements?What percentage of advertising is paid by each party?When can ads be run? In what media?Are there special provisions regarding message content?What documentation is required for reimbursement?How does each party benefit?Do cooperative ads obscure the image of individual retailers?

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Public RelationsPublic Relations - Any communication that fosters a favorable image for the retailer among its publicsNonpersonal or personalPaid or nonpaidSponsor-controlled or not Publicity Any nonpersonal form of public relations whereby messages are transmitted through mass media, the time or space provided by the media is not paid for, and there is no identified commercial sponsor

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Public Relations Objectives for RetailersIncrease awareness of the retailer and its strategy mixMaintain or improve the company imageShow the retailer as a contributor to the publics quality of lifeDemonstrate innovativenessPresent a favorable message in a highly believable mannerMinimize total promotion costs

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Public RelationsAdvantagesImage can be presented or enhancedMore credible sourceNo costs for messages time or spaceMass audience addressedCarryover effects possiblePeople pay more attention than to clearly identified adsDisadvantagesSome retailers do not believe in spending on image-related communicationLittle control over publicity messageMore suitable for short runCosts for PR staff, planning activities, and events

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Figure 19.5 J.C. Penneys Tips for Sales Associates

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Personal SellingOral communication with one or more prospective customers for the purpose of making a sale

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Personal Selling Objectives for RetailersPersuade customers to buyStimulate sales of impulse items or products related to customers basic purchasesComplete customer transactionsFeed back information to company decision makersProvide proper levels of customer serviceImprove and maintain customer satisfactionCreate awareness of items also marketed through the Web, mail, and telemarketing

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Personal SellingAdvantagesMessage can be adaptedMany ways to meet customer needsHigh attention spanLess wasteBetter responseImmediate feedbackDisadvantagesLimited number of customers handled at one timeHigh costsDoesnt get customer in storeSelf-service discouragedNegative attitudes toward salespeople (aggressive, unhelpful)

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Types of Sales PositionsOrder-takerOrder-getter

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Figure 19.6 Personal Selling: When Self-Service Isnt Appropriate

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Figure 19.7 Typical Personal Selling Functions

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Sales PromotionEncompasses the paid communication activities other than advertising, public relations, and personal selling that stimulate consumer purchases and dealer effectiveness

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Types of Sales PromotionsDisplaysContestsSweepstakesCouponsFrequent shopper programsPrizesSamplesDemonstrationsReferral giftsOther limited-time selling efforts

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Sales Promotions Objectives for RetailersIncreasing short-term sales volumeMaintaining customer loyaltyEmphasizing noveltyComplementing other promotion tools

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Sales PromotionsAdvantagesEye-catching appealDistinctive themes and toolsAdditional value for customerDraws customer traffic Maintains customer loyaltyIncreases impulse purchasesFun for customersDisadvantagesDifficult to terminatePossible damage to retailers imageMore stress on frivolous selling pointsShort-term effects onlyUsed as a supplement

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Figure 19.8 Selected Reasons Why Retail Sales Are Lost

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Figure 19.9 Types of Sales Promotions

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Figure 19.10 Using Point-of-Purchase Displays

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Figure 19.12 The Ikea Playroom

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Advantages of CouponsManufacturers may pay to advertise and redeem them99% of consumers redeem coupons at least once during the yearThey contribute to the consumers perception of getting a good valueCoupon redemption can serve as a measure of advertising effectiveness

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Figure 19.11 Planning a Retail Promotional Strategy

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Promotional ObjectivesIncrease salesStimulate impulse and reminder buyingRaise customer trafficGet leads for sales personnelPresent and reinforce the retailer imageInform customers about goods and servicesPopularize new stores and Web sitesCapitalize on manufacturer supportEnhance customer relationsMaintain customer loyaltyHave consumers pass along positive information to friends and others

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Procedures for Setting a Promotional BudgetAll-you-can-afford methodIncremental methodCompetitive parity methodPercentage-of-sales methodObjective-and-task method

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Figure 19.13 Hi-Tech, In-Store Promotion

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Figure 19.14 Promotion and the Hierarchy of Effects

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Implementation DecisionsMediaTimingContentMakeup of Sales ForceSales Promotion ToolsResponsibility for Coordination