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Chapter 17

Retail and Business-to-Business Advertising

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Chapter Learning Objectives

Discuss retail advertising fundamentals.

Summarize the media options for retailers.

Explain business-to-business advertising objectives.

Identify the various media used in business advertising.

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Retail Advertising

Retail Advertising Used by merchants

to sell products and service directly to consumers.

Accounts for nearly half of all the money spent on advertising.

Retailers sell through a physical facility.

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Sell a Variety of ProductsSell a Variety of Products

Encourage Store TrafficEncourage Store Traffic

Deliver Sales MessagesDeliver Sales Messages

Store ImageStore Image

Establish a BrandEstablish a Brand

Local Retail AdvertisingRetail Advertising is Often Called Local Advertising Because the

Target Market Often is Local.

Retail Advertising Should Perform

Several Functions:

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Retail Advertising is Usually Targeted at People LivingIn the Store’s Local Community.

Retail Advertising is Usually Targeted at People LivingIn the Store’s Local Community.

Consumer Brand Advertising Supports Only the Sponsor’s Brands; Retail Advertising May Support Several Brands.

Consumer Brand Advertising Supports Only the Sponsor’s Brands; Retail Advertising May Support Several Brands.

Retail Advertising Directed at the Local Community Has An Inherent Urgency.

Retail Advertising Directed at the Local Community Has An Inherent Urgency.

Local Retail Advertising is Customized to Reflect the Local Store.

Local Retail Advertising is Customized to Reflect the Local Store.

Differences Between Local Retailing & National Brand Advertising

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Differences Between Local Retailing & National Brand Advertising

To Build and Maintain Store Traffic, a Retailer Must Meet Four Objectives:

Build Store Awareness Build Store Awareness

Convince Consumers That the Store’s Items Satisfy Needs

Convince Consumers That the Store’s Items Satisfy Needs

Create Consumer Desire to Shop At This Store

Create Consumer Desire to Shop At This Store

Create Consumer Understanding

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Station BreakGo to the Benetton Web site at www.benetton.com.

Examine how the company deals with controversial and culturally sensitive issues.

How does this help them sell clothing?

If you were a local distributor (retail store) that carried Benetton products, how would the Benetton ads or policies affect your sales?

Use this company as an illustration of how truly different national product advertisers can be from their local counterparts. Discuss.

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Structure of Co-op FundsStructure of Co-op Funds

CooperativeAdvertising

CooperativeAdvertising

Manufacturer ReimbursesRetailer for Ad Expenses

Manufacturer ReimbursesRetailer for Ad Expenses

Based on a % of SalesTo Retailer

Based on a % of SalesTo Retailer

SometimesCalled

AdAllowances

SometimesCalled

AdAllowances

Suppliers of Co-op CanFund Activity in Two Ways

Suppliers of Co-op CanFund Activity in Two Ways

Varies FromMonth to

Month

Varies FromMonth to

Month

Accrual Fund

Accrual Fund

Cooperative Advertising

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Nonstore Retailing Occurs When the Exchange Between the Manufacturer or Retailer and the Consumer Takes Place

Outside the Traditional Retail Store. Reasons For Growth:

Consumers Are No Longer Inclined to Spend Hours Shopping

Consumers Are No Longer Inclined to Spend Hours Shopping

Improvements in Quality and SelectionImprovements in Quality and Selection

Improvements in WarrantiesImprovements in Warranties

Nonstore Retailing

Improvements in Mailing ListsThat Target Consumers

Improvements in Mailing ListsThat Target Consumers

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Rapidly GrowingIndustry

Rapidly GrowingIndustry

Purchase:Computer Products,

Travel, Entertainment,

Apparel, Gifts, etc.

Purchase:Computer Products,

Travel, Entertainment,

Apparel, Gifts, etc.

E-Commerce is the Selling of Goods and Services (Commerce) Through the Internet.

Online Retailing and E-Commerce

MayUse Other Media to

Advertise Their Products or

Services.

MayUse Other Media to

Advertise Their Products or

Services.

Attractive to ThoseWho Value

Convenience and Don’t Have Much

Time.

Attractive to ThoseWho Value

Convenience and Don’t Have Much

Time.

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Institutional and Product Retail Advertising

Institutional Retail Sells the retail store

as an enjoyable place to shop.

Helps a store to establish its image.

Loyalty programs fall under this category.

Product Retail Presents specific

merchandise for sale and urges customers to come to the store immediately to buy.

Creates a store’s reputation through its merchandise.

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Station BreakGo to the following Web sites: www.foleys.com, www.may.com, www.macys.com, www.dillards.com, and www.gap.com.Which site seems to offer the most in the way of information and incentives to purchase?Are sales advertised? If so, on which sites?Which sites seem to match the image of the retail themselves? Discuss how your judgments were made. What improvements could be made to these sites to make them more competitive and attractive?

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Trends Affecting Retail Advertising

ConsolidationIncreased Use of Free-Standing

Inserts

ConsolidationIncreased Use of Free-Standing

Inserts

DemographicTime Stress, Aging Population,

Geomarketing, Market Fragmentation

DemographicTime Stress, Aging Population,

Geomarketing, Market Fragmentation

Heightened CompetitionMarkets Will Continue to Decrease in Size as Competitors Segment Them.

Heightened CompetitionMarkets Will Continue to Decrease in Size as Competitors Segment Them.

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Image or Price

Price is a FactorIn Image.

Some Products Are Difficult to

Differentiate (gas).

Price Can HelpConsumers to

Comparison Shop.

Image or Price

Price is a FactorIn Image.

Some Products Are Difficult to

Differentiate (gas).

Price Can HelpConsumers to

Comparison Shop.

Executing Retail Ads

Main Objective isTo Attract

Customers.

Mention Store Location & Phone.

May Save Money By Using Stock

Artwork.

Executing Retail Ads

Main Objective isTo Attract

Customers.

Mention Store Location & Phone.

May Save Money By Using Stock

Artwork.

Who Works onThe Creative?

In-house Staff

Media

Ad Agencies

Freelancers

Who Works onThe Creative?

In-house Staff

Media

Ad Agencies

Freelancers

Creating the Retail Ad

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Buying and Selling Local Media

Most rapidly changing area in retail advertising is the buying and selling of local media time and space. Media competition has increased significantly. Budgets are tighter. All large markets have at least one local magazine that

offers high-quality, four-color ads. New selling tactics are called for.

Local Retail Media Strategy Local retailers generally prefer reach over frequency. Successful retailers use media that minimize waste, such

as direct mail.

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MagazinesMagazinesDirect ResponseDirect Response

Online MediaOnline MediaShoppers &

PreprintsShoppers &

Preprints

DirectoriesDirectories Broadcast MediaBroadcast Media

SpecialtySpecialty

Media Alternatives

NewspapersNewspapers

Local Retailers Are Interested Only in Local Media and

Usually Select One of the Following:

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Organizations Buy Products or

Services in Business Markets.

Advertising Directed at People in Business Who Buy or Specify Products

for Business

Use.

Business-to-Business Advertising & Marketing

Organizations Buy Goods or Services to Support (1) Production Requirements, (2) Business Needs.

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Types of Business Markets and Products Purchased (Fig. 17.1)

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MarketConcentration

MarketConcentration

DecisionMakers

DecisionMakers

Business-to-Business Advertising Differs From the Creation of Consumer Advertising

Business-to-Business Advertising Differs From the Creation of Consumer Advertising

StrategicOrientation

StrategicOrientation

Business Versus Consumer Marketing

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Purchasing Objectives

Price Service

Quality Assurance of Supply

Purchas ingO bjec tives

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Creating Company

Awareness

Helps to ContactThose That Can’tBe Reached by

Salespeople

SupportingDistributors and

Resellers

Helps to AnswerCommon Questions

Business-to-Business Advertising Objectives

IncreasingOverallSelling

Efficiency

Also Helps

to:

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Select the Strongest BenefitSelect the Strongest Benefit

Dramatize the Most Important BenefitDramatize the Most Important Benefit

Visual Should be RelevantVisual Should be Relevant

Layout Should Have a Sense of Balance and FlowLayout Should Have a Sense of Balance and Flow

Offer Should be ClearOffer Should be Clear

Creating Business-to-Business Ads

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Business-to-Business Advertising Media

Media Choices Available

for Business-

to-Business

Advertisers

Business & Trade

PublicationsDirectory

Advertising

Direct Marketing

Consumer Media

The Web

Competitive Advantage

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Does Business Advertising Sell?Many question the effectiveness of business-to-business advertising. Studies show that: This form of advertising does create sales. Increased advertising results in increased sales. Paid to advertise to both dealers and end users when

the product was sold through dealers. Increased frequency leads to higher sales and profits. It takes 4-6 months to see gains. Use of color made a dramatic difference. Ad campaign is often effective long after it ends. Awareness and attitudes are affected favorably.

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More Accountability

Is Required

Ad Programs andStaff Are Being

Pared Down

Trends in Business-to-Business Advertising

AdvertisingMust Support

Customer SalesAnd Choices

Becoming More

People Oriented