Chapter 16

Retail Communication Mix

Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill/Irwin

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Questions

■ What is a brand? How can retailers build brand equity for their stores and merchandise?

■ What are the primary methods retailers use to communicate with their customers?

■ Why do retailers need to have an integrated marketing communication program?

■ What steps are involved in developing a communication program?■ How do retailers establish a communication budget?

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What is the Purpose of the Retailer’s Communication program?

■ Informs customers about the retailer as well the merchandise and services it offers

■ Plays a role in developing customer loyalty

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Effects of the Communication Program

Short-termIncrease TrafficIncrease Sales

Long-termBuild image (brand equity) ofthe retailerDifferentiate from competition

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What is a Brand?

Distinguishing name or symbol, such as a logo, that identifies the products or services offered by a seller and differentiates those products and services from those offered by competitors

The McGraw-Hill Companies, Inc./Bob Coyle, photographerThe McGraw-Hill Companies, Inc./John Flournoy, photographer

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Why are Brands Valuable?

Value to Retailers ■ Attract Customers

■ Build Loyalty

■ Higher Prices Leading toHigher Gross Margin

Value to Customers■ Simplifies Buying Process

■ Reduces Time and Effort Searching for Information About Merchandise/Retailer

■ Provides social and psychological benefits

How to Build Strong Retail Brands

■ Build brand awareness The ability of a potential customer to recognize or

recall the retailer’s brand Desire top of mind awareness

■ Build positive brand associations Anything linked to or connected with the brand name in

a consumers’ memory

■ Consistently reinforce Consistently communicate the same message to

customers over time and across all elements of the communication program and the retail mix

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McDonald’s Brand Associations

McDonald’s

Big Mac

Golden Arches

Fast Food

French Fries

Clean

Ronald McDonald

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Wal-Mart Associations

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Integrated Marketing Communications

■ A program that integrates all of the communication elements to deliver a comprehensive, consistent message

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Integrated Marketing Communications

Present a Consistent Brand Image through all Communications with Customers

•Sales Promotion

•Advertising

•Web Site

•Personal Selling

•PublicityThe McGraw-Hill Companies, Inc./Andrew Resek, photographer

Communication Methods

■ Advertising■ Sales Promotion■ Store Web Site■ Personal Selling■ E-mail program■ M-Commerce■ Direct Mail■ Publicity■ Special Events and Sponsorships■ Specialty Items and Collateral Materials

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Advertising

■ Any paid form of nonpersonal communication through the mass media about a good, service, or idea by an identified sponsor.

■ Examples – newspaper, magazine, radio , TV, billboards, yellow pages, internet, and in store advertising

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Sales Promotion

■ Short-term incentives used to encourage customers to visit a store or purchase merchandise during a specific period of time.

■ Examples - coupons, contests, sweepstakes, premiums, free samples, in store demonstrations

Jack Star/PhotoLink/Getty Images

Boxes of KrustyO’s cereal at a New York 7-Eleven stores, temporarily converted into a

Kwik-E Mart, to promote the Simpson Movie.

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Publicity

News carried by the media about a firm at no charge to the organization for media space.

• Newspaper article• TV coverage• Macy’s Thanksgiving Day Parade

Direct Mail

■ Refers to any brochure, catalog, advertisement, or other printed material delivered directly to the consumer through the mail

■ Use of data collected through POS terminals■ Use of list brokers

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Personal Selling

■ Direct face to face communication between sellers and potential buyers

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Establish Communication Objectives

Determine the Communication Budget

Determine Communication Strategies and Tactics

Implement and Evaluate the Plan

Steps in Developing a Retail Communication Program

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Setting Objectives

■ Definition Specific goals related to the retail communication

mix’s effect on the customer’s decision-making process.

■ Examples Create awareness of store Create knowledge of store offerings Correct misconceptions, improve customer attitudes Remind customers of store

■ Criteria Clearly defined target market Degree of changed desired Time frame

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Communication Objectives & Stages in the Consumers Decision-Making Process

Communication Budget Methods

■ Percent of sales■ Affordable■ Competitive Parity■ Objective and Task

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Estimate Costs Associated with Tasks(determine costs of advertising, promotions,

etc.)

Estimate Costs Associated with Tasks(determine costs of advertising, promotions,

etc.)

Determine Specific Tasks(advertise on market area television and radio

and local newspapers)

Determine Specific Tasks(advertise on market area television and radio

and local newspapers)

Establish Objectives(create awareness of new product among 20

percent of target market)

Establish Objectives(create awareness of new product among 20

percent of target market)

Determine Specific Tasks(advertise on market area television and radio

and local newspapers)

Determine Specific Tasks(advertise on market area television and radio

and local newspapers)

Establish Objectives(create awareness of new product among 20

percent of target market)

Establish Objectives(create awareness of new product among 20

percent of target market)

© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Estimate Costs Associated with Tasks(determine costs of advertising, promotions, etc.)

Estimate Costs Associated with Tasks(determine costs of advertising, promotions, etc.)

Objective and Task Method