effective advertising in retail

8/2/2019 Effective Advertising in Retail

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Retail Promotional StrategyRetail Promotional Strategy


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Retail PromotionRetail Promotion

Any communication by a retailer thatinforms, persuades, and/or reminds

the target market about anyaspect of that firm


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Elements of theElements of the

Promotional MixPromotional Mix

Advertising

Sales promotion

Store atmosphereWeb site

SEM

Personal selling

E-mail marketing

Publicity

SEM

Word of mouth

Impersonal Personal

Unpaid

Pa

id


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Management of PromotionalManagement of Promotional

Efforts Must Fit Into a RetailersEfforts Must Fit Into a Retailers

Overall StrategyOverall Strategy

A retailers location will help determine the target area for promotions

Retailers need high levels of traffic to keep merchandise moving promotion helps build traffic

Retailers credit customers more store loyal and purchase on largerquantities making them an excellent target for promotions

Promotions can increase short-run cash flow

Promotional creativity and style should coincide with building andfixture creativity

Promotion can be viewed as a major component of customer servicebecause it provides information


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Promotional GuidelinesPromotional Guidelines

Utilize promotions that are consistent with and enhance store image

Review success or failure of each promotion to help in developing futurepromotions

Test new promotions when possible

Use appeals that are of interest to your target market and that are realistic toobtain

Make your objectives measurable and obtainable

Develop total promotional campaigns, not just ads

New stores need higher promotional budgets than established stores

Stores in out-of-the-way locations require higher promotional budgets thanstores with heavy traffic


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Planning a RetailPlanning a Retail

Promotional StrategyPromotional Strategy


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Promotional ObjectivesPromotional 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


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Promotional ObjectivesPromotional Objectives

Improve Long-RunPerformance

Improve Short-RunPerformance

Store Image andPositioning

PublicService

Increase ExistingCustomer Patronage

Attract NewCustomers

From ExistingTrade Area

ExpandTrade Area


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Public RelationsPublic Relations

Public Relations - Any communication that fostersa favorable image for the retailer among its publics Nonpersonal or personal

Paid or nonpaid Sponsor-controlled or not

Publicity Any nonpersonal form of publicrelations whereby messages are transmitted

through mass media, the time or space providedby the media is not paid for, and there is noidentified commercial sponsor


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Public RelationsPublic Relations

Advantages

Image can be presented orenhanced

More credible source No costs for messages

time or space

Mass audience addressed

Carryover effects possible

People pay more attentionthan to clearly identifiedads

Disadvantages

Some retailers do notbelieve in spending on

image-relatedcommunication

Little control over publicitymessage

More suitable for short run

Costs for PR staff,planning activities, andevents


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AdvertisingAdvertising

Paid, nonpersonal communicationtransmitted through out-of-store massmedia by an identified sponsor

Key aspects Paid form

Nonpersonal presentation Out-of-store mass media

Identified sponsor


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Selected U.S. Advertising-to-Selected U.S. Advertising-to-

Sales Ratios by Type of RetailerSales Ratios by Type of Retailer

Type of Retailer Advertising $ as a% of Sales Dollars

Advertising $ as %of Margin

Apparel and accessories stores 6.6 16.7

Auto and home supply stores 1.0 2.3

Department stores 3.6 10.3

Drug and proprietary stores 0.8 3.2

Eating places 3.6 16.1

Family clothing stores 2.5 8.3

Furniture stores 4.6 13.8Grocery stores 1.2 4.9

Hobby, toy, and game shops 1.2 3.8

Hotels and motels 1.8 8.1

Lumber and building materials 0.5 1.7


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AdvertisingAdvertising

Advantages

Attracts a large audience

Gains pass alongreadership (for print)

Low cost per contact

Many alternativesavailable

Control over messagecontent; message can be

standardized Message study possible

Editorial contentsurrounds ad

Self-service operations

possible

Disadvantages

Standardized messageslack flexibility

Some media require largeinvestments

Geographic flexibilitylimited

Some media require longlead time

Some media have highthrowaway rate

Some media limit theability to provide detailedinformation


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Advertising MediaAdvertising Media

Comparison ChartComparison Chart

Medium Market Coverage Particular Suitability

Daily Papers Single community or entiremetro area; local editions maybe available

All larger retailers

Weekly Papers Single community usually; maybe a metro area

Retailers with a strictly localmarket

Shopper Papers Most households in onecommunity; chain shoppers cancover a metro area

Neighborhood retailers andservice businesses

Phone Directories Geographic area or occupational field served by thedirectory

All types of goods and service-oriented retailers

Direct Mail Controlled by the retailer New and expanding firms, thoseusing coupons or special offers,mail order


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Radio Definable market areasurrounding the station

Retailers focusing on identifiablesegments

TV Definable market areasurrounding the station

Retailers of goods and serviceswith wide appeal

World Wide Web Global All types of goods and service-oriented retailers

Transit Urban or metro community

served by transit system

Retailers near transit routes,

especially those appealing tocommuters

Outdoor Entire metro area or singleneighborhood

Amusement and tourist-orientedretailers, well-known firms


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National Magazines Nationwide National chains

Local Magazines Entire metro area or region,zoned editions sometimesavailable

Restaurants, entertainment-oriented firms, specialty shops,mail-order firms

Flyers/ Circulars Single neighborhood Restaurants, dry cleaners,service stations, and otherneighborhood firms


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NewspaperewspaperAdvertisingdvertising


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Yellow PagesYellow Pages

The average consumerlooks at: 4.32 ads.

70% of consumers look at

the bigger ads when they arenot sure where to make apurchase.

65% of consumers feel thata large ad signifies a

business with an establishedreputation.

83% of consumers startlooking at ads in thebeginning of a heading.


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Direct MailDirect Mail

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Television AdsTelevision Ads

http://www.mathisbrothers.com/ads/television.html

http://208.254.2.73/media/OfficeMax_ThePartysOver_112k.wmv

http://208.254.2.73/media/target_clip3_512k.wmv

http://208.254.2.73/media/BigLots_512k.wmv

http://www.advertisementave.com/

http://www.visit4info.com/coolads.cfm

http://www.infomercialindex.com/index.html
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Billboards/Outdoor AdsBillboards/Outdoor Ads

On average, a billboard is only viewed for 7 seconds!

A good rule is to use about 8 to 10 words in your entire ad!

Your message must be very short so it can be easily read by the people driving60 to 75 miles per hour by your sign.

Measured and priced in gross rating points(GRP) - the total number of postings in amarketing schedule versus the population. TheGRP is calculated by dividing the traffic countby the population .

Billboards are typically purchased as 25, 50,75, or 100 GRP (showings). For example, if

you want a 50 GRP (showing), than 50% of thepopulation should see your billboards every

single day.

Retail billboard winners

REI 1

REI 2

StaplesLibrary of billboard ads: http://www.oaaa.org/creativelibrary/
http://www.rama-nrf.org/content/rac/rac2005/images/awards/billboard/BillBoardC.jpghttp://www.rama-nrf.org/content/rac/rac2005/images/awards/billboard/BillBoardB.jpghttp://www.rama-nrf.org/content/rac/rac2005/images/awards/billboard/BillBoardD.jpghttp://www.oaaa.org/creativelibrary/http://www.oaaa.org/creativelibrary/http://www.rama-nrf.org/content/rac/rac2005/images/awards/billboard/BillBoardD.jpghttp://www.rama-nrf.org/content/rac/rac2005/images/awards/billboard/BillBoardB.jpghttp://www.rama-nrf.org/content/rac/rac2005/images/awards/billboard/BillBoardC.jpg


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Radio AdvertisingRadio Advertising

Retailers spent $72.2 million onmetropolitan commercial radio

advertising in the first six months of2005

NTRA Radio Ad Mt Sinai Medical Center Ad
http://www.oaaa.org/creativelibrary/http://www.oaaa.org/creativelibrary/http://www.oaaa.org/creativelibrary/http://www.oaaa.org/creativelibrary/http://www.oaaa.org/creativelibrary/http://www.oaaa.org/creativelibrary/http://www.oaaa.org/creativelibrary/http://www.oaaa.org/creativelibrary/http://var/www/apps/conversion/current/tmp/scratch11095///homedir/users/astanton/retail/NTRA.mp3http://var/www/apps/conversion/current/tmp/scratch11095///homedir/users/astanton/retail/MtSinai.mp3http://var/www/apps/conversion/current/tmp/scratch11095///homedir/users/astanton/retail/MtSinai.mp3http://var/www/apps/conversion/current/tmp/scratch11095///homedir/users/astanton/retail/NTRA.mp3


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Magazine AdvertisementsMagazine Advertisements

Parisian Ad
http://var/www/apps/conversion/current/tmp/scratch11095///homedir/users/astanton/retail/MtSinai.mp3http://var/www/apps/conversion/current/tmp/scratch11095///homedir/users/astanton/retail/MtSinai.mp3http://www.rama-nrf.org/content/rac/rac2005/images/awards/printCamp/PrintCampaignBronze.jpghttp://www.rama-nrf.org/content/rac/rac2005/images/awards/printCamp/PrintCampaignBronze.jpg


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Flyers/CircularsFlyers/Circulars

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Media SelectionMedia Selection

Coverage maximum number of consumersin the retailers target market

Reach actual total number of targetcustomers who come into contact with the admessage

Frequency average number of times eachperson who is reached is exposed to the adduring a given time period
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Planning a Cooperative StrategyPlanning a Cooperative Strategy

What ads qualify, in terms of merchandise and specialrequirements?

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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Scheduling Retail AdsScheduling Retail Ads

Ads should appear on (or slightly precede) the days whencustomers most likely to purchase

Ads should be concentrated around the times when people

receive their payroll checks

If funds are limited, concentrate ads during periods of highestdemand

Ads should be timed to appear during time of say or day ofweek when the best cost-per thousand for the target market((cost of ad/number of people in the target market viewing thead) x 1000)

The higher the degree of habitual purchasing of a product class,

the more the advertising should precede the purchase time.
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Personal SellingPersonal Selling

Oral communication with one or moreprospective customers for the purposeof making a sale
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Personal SellingPersonal Selling

Advantages

Message can be adapted

Many ways to meetcustomer needs

High attention span

Less waste

Better response

Immediate feedback

Disadvantages

Limited number of

customers handled at onetime

High costs

Doesnt get customer instore

Self-service discouraged Negative attitudes toward

salespeople (aggressive,unhelpful)
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Types of Sales PositionsTypes of Sales Positions

Order-taker

versus

Order-getter
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Selected Reasons WhySelected Reasons Why

Retail Sales Are LostRetail Sales Are Lost
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Sales PromotionSales Promotion

Encompasses the paid communicationactivities other than advertising, public

relations, and personal selling thatstimulate consumer purchases anddealer effectiveness
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Sales PromotionsSales Promotions

Advantages

Eye-catching appeal

Distinctive themes andtools

Additional value forcustomer

Draws customer traffic

Maintains customerloyalty

Increases impulsepurchases

Fun for customers

Disadvantages

Difficult to terminate

Possible damage to

retailers image More stress on

frivolous selling points

Short-term effects only

Used as a supplement
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Types of Sales PromotionsTypes of Sales Promotions

htt ://www.sca romotions.com/index. h
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Advantages of CouponsAdvantages of Coupons

Manufacturers may pay to advertise and redeem them windfall to retailers since they generally receive 10-cent couponhanding fee ($500 million + in 2002)

99% of consumers redeem coupons at least once during theyear (but only 2% of all coupons redeemed)

People may forget coupon but buy anyway

They contribute to the consumers perception of getting a goodvalue

Coupon redemption can serve as a measure of advertising

effectiveness
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Procedures for Setting aProcedures for Setting a

Promotional BudgetPromotional Budget

All-you-can-afford method

Incremental method

Competitive parity method

Percentage-of-sales method

Objective-and-task method
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Promotion and thePromotion and the

Hierarchy of EffectsHierarchy of Effects
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effective advertising in retail

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