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Retail advertising and sales promotionPromotion Promotion refers to any activity that is primarily intended to create demand and awareness for the product and for the company. Different types of promotions are: Advertising Publicity Personal selling Sales promotion

AdvertisingAdvertising is any paid form of non-personal presentation and promotion of ideas, goods or services by an identified sponsor. The advertisements are resorted to for creating awareness of the product, demand creation, corporate image etc. Advertising moves the buyer towards the stores whereas the sales promotion moves the product towards the buyer.

Publicity(Non-paid form of advertising) Publicity refers to the news item which is generally not paid for, whereas the advertisements are paid for. A news item regarding collaboration between Wal-Mart and Bharti. A news item about Vivek completing 25 years is publicity.

Personal SellingWhile the advertising is a non-personal selling, the personal selling is a face-to-face presentation of goods and services to the prospective buyers. The salesman approaches, convinces and overcomes the objections and then sells the product.

Sales PromotionA direct inducement that offers extra value or incentive for the products, sales force, ultimate customers or the distributors with the primary objective of creating an immediate sale.

It is a short term incentive to encourage purchase or sale of a product or service.Sales promotionSales promotion activities are those that are undertaken by the seller other than advertising and personal selling. Some examples are: Product demonstrations, window display of goods, participation in fairs, exhibitions, exchange offers etc.

Sales promotion is defined as those selling activities that supplement both personal selling and advertising and coordinate and help them to make effective sales efforts, such as displays, shows, expositions demonstrations and other non-recurrent activities.

Merits of promotionHelps to create awareness among the potential customers of the stores and serves as a reminder media for the existing customers. Serves as a medium to reach the market.Helps in building a good image for the stores.Continuous promotion builds brand loyalty.Able to demonstrate the superiority of one store over the other

Criticism against the promotionIt makes people to buy things that they do not really need.It makes them buy things that they can not really afford to pay. Because of catchy promotional efforts, they tempt people to buy goods with financial assistance.People tend to spend their money rather than save and invest. 4. All promotions cost money and ultimately it is the customer who has to pay for all this. 5. Some companies have started to feel that even if their product quality is not good, they will be able to market the same effectively by extensive promotional efforts. As a result of such thinking, customers may receive goods of sub-standard quality.

Free samplesFree samples are given to the customers so that they would definitely use the product and If satisfied, would become a regular customer for the product. These samples are distributed by the dealers or by the manufacturers. Some samples are distributed by sticking them to the newspapers or magazines. Detergent powders, shampoo, etc are items normally given like this.

Offering samples is quite expensive. Not only the cost of the product is involved but also the cost of distribution. Also if the final product is not of the same quality as the free sample, it may create customer resentment.Price cut by the manufacturesA price cut in the printed price list is announced for a small period of time in order to boost the sales .

Many experts feel that this is not very desirable as this may affect the dealer morale as they will get reduced commission. Also the brand value may be affected. The customers also may start feeling that the company was making undue profits earlier.Money refund offerThe retail chain Pizza corner supplies the pizza free if the delivery is not made within 40 minutes.Gifts to customersGifts are directly offered to the customers with the purchase of an item. Examples are: Buyers of Kellogg corn flakes get a bowl as the gift. Buyers of Cinthol soap may get some small biscuit packets. These things attract the customers even though the value of the gift item is small.

Off-season discountsManufacturers of air conditioners offer their products with good discounts during the winter months. This is because the natural demand during the period is low and they are creating demands.All the textile companies offer discounts after all the festival seasons are over. The months of October, November and January are festival months with festivals like Pooja, Deepavali, Christmas, new year and Pongal. The stores find that the demand drops after this season and in order to keep their stores selling, they have to resort to these.

Festival discountsDuring festival season also, the stores offer attractive schemes in order to counter the competition.CouponsThe coupon are given to the customers against purchases and can be used for subsequent purchases. The consumers will receive a certain price reduction as stated in the coupon. Some Pizza companies distribute leaflets and they contain discount coupons which can be used later.

It is not easy to calculate the effectiveness of the scheme as we do not know how many would have bought the product without the benefit. However the sales with the previous month without the scheme can be compared. Also coupons do not spoil the normal prices for the product.Exchange offerThe customers can return their old used item and a certain price will be fixed for the old item and the same will be deducted from the price of the new item.Dealers of TV manufacturers like Sony, Samsung, Onida, LG etc are resorting to this regularly. All car dealers of leading companies like, Maruti, Ford, OM, Tatas advertise that the customers can trade-in their old cars for the newer ones. Many other customer durables dealers ( Fridge, air conditioners, music systems) resort to this.Free delivery and installationSome dealers do not charge fortransporting the goods to the households if they are within certain distance. They also do not charge for installation. Computer dealers, TV dealers etc do this.

Lucky drawThe buyers are given a coupon which they should fill and drop in a box in the dealers place. At a pre-determined time and place, a lucky draw will be conducted and the winner will get attractive prizes. In some cases like industrial exhibitions, the visitors are asked to drop their visiting cards and a lucky draw is conducted. This also helps the sellers to get database.Slogan contestCustomers are given a coupon where they should also write a slogan for the product or the company. Best slogans are selected and rewarded.

Retail advertisingAdvertisement does not only provide the information about the product and services and availability at various retail locations but also provides an important link in the retail segment between the retailer and the customer.

Benefits of retail advertisingIt helps in creating awareness about its existence, price, different retail locations etc.It educates the customer about the new products and services and their diverse use.

It conveys details of sales promotion currently available at retail stores.It also highlights the superiority of the products / retail stores

Types of Advertisements for CustomersConsumer-oriented or Persuasive AdvertisingIt surrounds our daily lives and provides stimulus to purchase various products or services. It helps in maintaining a regular demand and attracts a lot of attention and preference of the customers. The major objectives consumer-oriented advertising are as follows:-Information to customers about new products.Holding consumer patronage against intensified campaign by rivals .Teaching customers about the usage of the product.Promoting a contest or a premium offer.Establishing a new trade character.Informative advertisementsPurchases of durable products are generally erratic and often too expensive to buy, so the buyer requires elaborate information about them. Hence, the retailer and the manufacturer spend a huge amount on informative advertising.Institutional or Corporate AdvertisingIts main motive is to build a corporate image. In corporate advertising an attempt is made to highlight the achievements and objectives of the retail organization. The institutional advertising campaigns have the following objectives:Creating the corporate image.Building up retailer prestige.Emphasizing the services and facilities provided by the outlet.Increasing consumer friendliness and goodwill towards the retail organization.Financial AdvertisingIt refers to advertisements by various financial institutions like Standard Chartered Bank, ICICI, etc. They provide information about the investment opportunities and the risks and benefits associated with them.Advertising BudgetA well-designed retail advertising campaign requires proper budgetary allocation for advertising. The appropriation of advertising budget must be determined with direct reference to advertising objectives.Four widely used methods for determining the expenditure on a retail campaign are:- Affordable method. Percentage-of-sales Method. Objective and Task Method. Competitive-parity Method.Affordable MethodMany small retailers use this method in which they set the budget at a reasonable level- that which they can afford.Percentage-of-sales MethodIn this method the retailer budgets the advertising expenditure in terms of a specific percentage of forecasted sales.Objectives and Task MethodIn this method a retailer establishes the advertising objectives and then defines the tasks required to achieve them after estimating the cost of performing those tasks. When all the costs are totaled the retailer has his advertising budget ready. In short, this method begins with the retailers advertising objectives and then it determines the cost to achieve these objectives.Competitive-parity MethodIn this method the retailer allocates the advertising budget at a level at which the competitors spend for the same kind of time periods and campaigns.The two major types of advertising campaigns relevant to the retail sector are: Vertical Co-operative advertising. Horizontal co-operative advertising.Vertical Co-operative advertising This type is planned when the retailers and other channel members (usually manufacturers) share the advertising budget in a pre-determined way. In many instances the cost is shared equally. If Lanson Toyota advertises about the Toyota cars and its showrooms in Chennai, the cost is shared as 50% each between the dealer (Lanson Toyota) and the manufacturer (Toyota Kirloskar Motors). Here we can understand that the manufacturer subsidizes some of the retailers advertising budget if it features the manufacturers brand.

Samsung may have a special sales promotion for their LCD TV and the retailer Vivek may advertise under the co-op budget and half the cost of the ad will be borne by the manufacturer i.e Samsung. In the case of FMCG products that are sold by several outlets, large and small, manufacturer extensively support the mom-and-pop stores and the independent retailer since they lack the financial resources and also the professional expertise. In addition to lowering the costs, co-op advertising enables the small retailer to associate his name with the well-known national brands and use attractive ad copy developed by the national brand

Co-op advertising has drawbacks also. Suppliers want prominence to be given to their products in the ad whereas the retailers want prominence for their retail stores in the ad. This creates a clash of interest.

Ads developed by the suppliers or manufacturers will have the names of all the retailers and so the retailer will feel that there is no focus on his store.

Horizontal co-operative advertisingThis type is launched when two or more retailers come together and advertise together thereby sharing the cost of advertising of a particular product. There are about four retail dealers for Hyundai cars in Banglore. Sometimes all of them advertise together about certain sales promotion undertaken.

Various media available for retail advertising

In the past, retailers used newspaper advertisements extensively. Newspapers also distribute free-standing leaflets which are inserted into the newspapers. Newspapers offer opportunities to small retailers by developing different editions for different localities. The Hindu,on Sundays, has different supplements to different parts of the Banglore city even though the main newspaper is common for all.

The cost of developing newspaper ads are lower as compared to for other media as it can be developed by less experienced persons.

Retail ads in magazines which are weekly or fortnightly is done by major retailers like Big Bazaar, Croma, Reliance Fresh etc

Direct Mail is also used by retailers. RMKV, a leading textile retailer sends communication to their clients through mail. The addresses are collected by them at the time of the customers visit to their showroom or through the contests conducted by them Television commercials can be used by the retailers. Retailers use TV for building image for their stores. Television ads can also demonstrate the product usage. In addition to the high production costs, broadcast time is also very expensive. FM Radio is a major medium today. With increasing popularity, it is very suitable for retailers because of its relatively low cost, low cost of production etc. Internet and outdoor bill boards are also used to promote retail stores and their merchandise.