Chapter 11 Advertising and Promotion
The Retail Promotion Mix • What is promotion?
The Retail Promotion Mix • What is promotion? • A means that retailers use to bring traffic into their stores, and includes… • Advertising, • Sales promotion, • Publicity, and • Personal selling.
1. Advertising • Definition: • Paid, non-personal communication through various media by business firms, and individuals who are in some way identified in the advertising message and who hope to inform and/or persuade members of a particular audience • Key points: • Performed by retailers (profit or nonprofit) • The retailer is identified within the message • Designed to persuade or inform • Includes, but not limited to: • Communication of products, services, institutions, and/or ideas
2. Sales Promotion • Definition: • Involves the use of media and non-media marketing pressure applied for a pre-determined, limited period of time at the level of consumer, retailer or wholesaler in order to stimulate trial, increase consumer demand, or improve product availability • Key points: • Uses both media and non-media • Runs for a limited, and pre-determined, period of time • Directed at the “customer” (final customer, retailer, wholesaler) • Has one of three end-goals • Stimulate trial, increase existing purchases, or expand availability
3. Publicity • Definition: • Non-paid-for communications of information about the company or product, generally in some media form • Key points: • Non-paid-for communication • Does not mean that no money has been spent • Provides some form of information about a company or product • Examples: • Macy’s parade • Del Frisco’s Double Eagle Steakhouse
4. Personal Selling • Definition: • Selling that involves a face-to-face interaction with the customer • But why is this considered promotion?
4. Personal Selling • Definition: • Selling that involves a face-to-face interaction with the customer • But why is this considered promotion? • Rationale: • It provides a service to the customer • Ease in information gathering • Such service enhances one’s value proposition • Value propositions are the reasons customers shop a store • What is the goal of a promotion – traffic
Integrated Effort • Promotion decisions relate to and must be integrated with other management decisions, such as: • Location • Merchandise • Credit • Cash flow • Building and fixtures • Price • Customer service
Promotion in the Supply Chain • Three major differences in the way retailers and manufacturers use promotion: • Consider which, the retailer or manufacturer, highlights each in their promotions: • Product image versus availability • Specific product benefits versus price • Focused image versus cluttered ads
Promotional Objectives • Long-term objectives • Institutional advertising • Promoting and selling the store itself rather than the merchandise in the store. • Short-term objectives • Promotional advertising • Promoting the product availability and price to increase short-term performance • Two major goals: • Increased patronage from existing customers • Attraction of new customers
Steps in Planning for aRetail Advertising Campaign • Select advertising objectives • Budget for the campaign • Design the message • Select media to use • Schedule ads • Evaluate results
Selecting Advertising Objectives • Advertising objectives are informed by one’s promotional objectives • Advertising objectives are very idiosyncratic, but should never include “to increase sales”. Why? • Generally though, all chosen objectives must be: • Aimed at a specific market segment • Measurable • Stated in terms of a specific time frame • Would this example be okay or poor? Why? • “increase the level of awareness by 30% over the next 6 months”
Budgeting for a“Retailer-Only” Campaign • Three general approaches: • Affordable Method • Allocates all the money that the retailer can afford for advertising in any given period. • Percentage-of-Sales Method • Targets a specific percentage of forecasted sales to be used for advertising ---------------------- • Task and Objective Method*
Designing the Message • Creative ads should seek to accomplish 3 goals: • Attract attention and retain attention. • Achieve the objective of the advertising strategy. • Avoid errors, especially legal ones • Some approaches used attract & hold attention include: • Lifestyle • Fantasy • Humorous • Slice of life • Mood or image
General Guidelines forScheduling One’s Advertising • Ads should… • Appear on, or slightly proceed, the days when customers are most likely to purchase. • Be concentrated around the times when people receive their payroll checks. • Be concentrated during periods of high seasonal demand if the retailer has limited advertising funds. • Appear during the time of day/week when the lowest CPM will be obtained. • Spaced so that a greater amount of time exists between the advertisement and the purchase time, when a product class has a high level of habitual purchasing
Evaluating Advertising’s Results • Most ineffective advertising is due to: • Messages or sales getting discounted. • Advertising not appealing, not giving customers all the information they need, or not directed at the proper target market. • Advertising dollars spread too thinly. • Poor internal communications. • Too many last-minute changes in the advertising copy. • Retailer used a medium that reached too many people not in the target market.
Publicity Management • When publicity is formally managed, it should be integrated with other elements of the promotion mix. • Major advantages of publicity • It’s perceived as more objective and credible • Likely to appeal to a mass audience. • Major disadvantages of publicity • It’s difficult to control and time • Rumors are just one event that is beyond one’s control and can be highly damaging. • Must be prepared for such events if at al possible.
What You Should Have Learned…Chapter’s Learning Objectives • The four basic components of the retailer’s promotional mix and their relationship with other decision areas. • The differences between a retailer’s long-term and short-term promotional objectives. • The six steps involved in developing a retailer’s advertising campaign. • How retailers manage their sales promotion & publicity.