Unit IX ( Retail Promotion)
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Transcript of Unit IX ( Retail Promotion)
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Unit IX: Retail Promotion - Planning Retail Promotions, Store Events &Sales Promotion, Retail Advertising.
Q1. Define Retail Promotion? Elements of Retail Promotional Mix? (P.498, Barry Berman)
Retail Promotion includes Any communication by a retailer that informs, persuades, and/or
reminds the target market about any aspect of that firm.
Retail promotions are designed to promote the goods and services offered in the business district
and to directly generate retail sales. Retail promotions should be used as part of a broader
promotional strategy, which also can include special events and image-building promotions.
Retail promotions can either be discount-oriented sales events or targeted, non-sale promotional
events.
Elements of Retail Promotional Mix
Advertising, Public Relations, Personal Selling, and Sales Promotion are the elements of
Promotion. A good plan integrates theses elements based on the overall strategy. A movie
theatre concentrates on Ads & Sales Promotions, while an Upscale Specialty Stores stresses
Personal Selling.
Advertising :- Paid, non-personal communication transmitted through
out-of-store mass media by an identified sponsor
Key aspects
Paid form (Distinguishes Advt. from Publicity)
Non-personal presentation
Out-of-store mass media (Newspaper, T.V., Radio)
Identified sponsor
Public Relations:-
It entails any communication that fosters a favorable image for the retailer among itspublics (Consumers, Investors, Government, Channel Members, Employees, and the
general public). IT may be personal or non-personal, paid or unpaid, and sponsor
controlled or not controlled.
Common activities include speaking at conferences, winning industry awards,
working with the press, and employee communication
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Publicity is any nonpersonal form of public relations whereby messages are transmitted
through mass media, the time or space provided by the media is not paid for, and there is
no identified commercial sponsor.
Personal Selling:- Oral communication with one or more prospective customers for the
purpose of making a sale.
The level of personal selling used by a retailer depends on the image it wants to convey,
the products sold, the amount of self service, and the interest in long term customer
relationships- as well as customer expectations.
Sales Promotion:- Encompasses the paid communication activities other than
advertising, public relations, and personal selling that stimulate consumer purchases anddealer effectiveness.
It includes displays, contests, sweepstakes, coupons, frequent shopper programs, prizes,
samples, demonstrations, referral gifts, and other limited-time selling efforts outside of
the ordinary promotion routine.
Q2. Discuss Planning a Retail Promotional Strategy? (P.512, Barry Berman)
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Promotional Guidelines
Utilize promotions that are consistent with and enhance store image
Review success or failure of each promotion to help in developing future promotions
Test new promotions when possible
Use appeals that are of interest to your target market and that are realistic to obtain
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 than stores with
heavy traffic
Q3. Determine Promotional Objective & Promotional Budget?
Ans:- A retailers broad promotional goals may be drawn from the list:
Increase Sales
Stimulate Impulse and Reminder buying
Raise Customer Traffic
Get Leads for Sales Personnel.
Present and reinforce the retailers image
Inform customers about goods and services
Popularize new stores and web sites
Enhance customer relations
Maintain Customer Loyalty
Have consumers pass along positive information to friends and others.
Perhaps the most vital long term promotion goal for any retailer is to gain positive word
of mouth (WOM), which occurs when one consumer talks to others.
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Establishing Overall Promotional Budget :-
1. With the all-you-can afford-method :- A retailer first allots funds for each
element of the retail strategy mix except promotions. The remaining funds go to
promotion.
2. The Increment Method:- relies on prior promotion budgets to allocate funds. A
percentage is either added to or subtracted from one years budget to determine
the next years.
3. The Competitive Parity Method :- A retailers promotion budget is raised or
lowered based on competitors actions. It the leading competitor raises its budget
by X percent, other retailers in the area may also follow.
4. The Percentage of Sales Method:- A retailer ties its promotion budget to
revenue. A promotion to sales ratio is developed.
Q4. Discuss In Store Events & Sales Promotion?
Stimulating, exciting, immersive events with a human touch can transform the way
consumers think about products, brands and retail environments. When the right
consumer connects with the right Brand Ambassador, sometimes the spark lights up an
entire network of buyers.
Have you ever shopped in a store that was dull and boring? You may not even recall the
name of the shop because it was simply that uninteresting. As a retailer, you don't wantyour store to become one of those lackluster shopping experiences. A great way to avoid
becoming mundane is by strategically planning promotional events for your retail store.
Retail Store Events Tips
Choose a Event that fits your industry, target audience and goals.
Maintain a calendar of all planned and actual promotional events.
Don't forget to include local community events in the planning.
Try to schedule events 3-6 months in advance to create an effective promotion.
Create a folder for each event to maintain records and review the final results.
Increase your Open-to-buy and purchase extra inventory for special events.
Sales Promotion:-
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Encompasses the paid communication activities other than advertising, public relations,
and personal selling that stimulate consumer purchases and dealer effectiveness
Types of Sales Promotions:-
Displays
Contests
Sweepstakes
Coupons
Frequent shopper programs
Objectives:-
Increasing short-term sales volume
Maintaining customer loyalty
Emphasizing novelty
Complementing other promotion tools
Advantages
Eye-catching appeal
Distinctive themes and tools
Additional value for customer
Draws customer traffic
Maintains customer loyalty
Increases impulse purchases
Fun for customers
Prizes
Samples
Demonstrations
Referral gifts
Other limited-time
selling efforts
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Q5. Explain Retail Advertising?
Paid, nonpersonal communication transmitted through out-of-store mass media by an
identified sponsor
Key aspects
* Paid form
* Nonpersonal presentation
* Out-of-store mass media
* Identified sponsor
Objectives
o Lifting short-term sales
o Increasing customer traffic
o Developing and/or reinforcing a retail image
o Informing customers about goods and services and/or company attributes
o Easing the job for sales personnel
o Developing demand for private brands
Advantages
Attracts a large audience
Gains pass along readership (for print)
Low cost per contact
Many alternatives available
Control over message content; message can be standardized
Message study possible
Editorial content surrounds ad
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Self-service operations possible
Types of Advertising
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Key- Terms
Q1. Objectives of Public Relation ?
Increase awareness of the retailer and its strategy mix
Maintain or improve the company image
Show the retailer as a contributor to the publics quality of life
Demonstrate innovativeness
Present a favorable message in a highly believable manner
Minimize total promotion costs
Q2. Advantages of Public Relation ?
Advantages
Image can be presented or enhanced
More credible source
No costs for messages time or space
Mass audience addressed
Carryover effects possible
People pay more attention than to clearly identified ads
Q3. Disadvantages of Public Relation?
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Some retailers do not believe in spending on image-related
communication
Little control over publicity message
More suitable for short run
Costs for PR staff, planning activities, and events
Q4. Objectives of Personal Selling?
Persuade customers to buy
Stimulate sales of impulse items or products related to customers basicpurchases
Complete customer transactions
Feed back information to company decision makers
Provide proper levels of customer service
Improve and maintain customer satisfaction
Create awareness of items also marketed through the Web, mail, and
telemarketing
Q5. Advantages of Personal Selling?
Advantages
Message can be adapted
Many ways to meet customer needs
High attention span
Less waste
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Better response
Immediate feedback
Q6. Disadvantages of Personal Selling?
Disadvantages
Limited number of customers handled at one time
High costs
Doesnt get customer in store
Self-service discouraged
Negative attitudes toward salespeople
Q7. Functions of Personal Selling?
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Q8. Hierarchy of Effects?
Q9. Implementing the Promotional Mix?
Media
Timing
Content
Makeup of Sales Force
Sales Promotion Tools
Responsibility for Coordination
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Q10. Media Selections?
Coverage maximum number of consumers in the retailers target market
Reach actual total number of target customers who come into contact with the ad
message
Frequency average number of times each person who is reached is exposed to the ad
during a given time period
Q11. Cooperative Advertising?
The costs of retail advertising are sometimes shared by manufacturers or wholesalers and
their retailers. Two or more retailers may also share costs. Both of these approaches entail
Cooperative Advertising.
Q12. Vertical Cooperative Advertising?
A manufacturer and a retailer or wholesaler and a retailer share an ad.
Advantage to retailer are the reduced ad costs, assistance in preparing ads, greater
market coverage and less planning time.
Q13. Horizontal Cooperative Advertising?
Two or more retailers share and ad. It is most often used by small noncompeting
retailers, retailers in the same shopping center, and franchisees of a given firm.
Advantages are the bargaining powers of retailers in dealing with the media and the
synergies of multiple retailers working together.
Q14. Order taking salesperson?
Performs routine clerical and sales functions Setting up displays, stocking shelves,
answering simple questions, and ringing up sales. This type of selling is most likely in
stores that are strong in self-service but also have some personnel on the floor.
Q15. Order Getting Salesperson?
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They are actively involved with informing and persuading customers, and in closing
sales. This is a true Sales employee. They usually sell higher price or complex items, such as
real-estate, autos and consumer electronics.
Q16. How to Schedule Retail Ads?
Ads should appear on (or slightly precede) the days when customers 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 highest demand
Ads should be timed to appear during time of say or day of week when the best cost-perthousand for the target market ((cost of ad/number of people in the target market viewing
the ad) x 1000)
The higher the degree of habitual purchasing of a product class, the more the advertising
should precede the purchase time.
Q17. Why Retail Sales are lost?
Generally, the retail sales are lost due to
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Q18. Media decision?
The choice of specific media is based on their overall costs, efficiency (The cost to
reach the target market),lead time, and editorial content. Overall costs are important since
heavy use of one expensive medium may preclude a balanced promotional mix, and a
firm may not be able to repeat a message in a costly medium
Q19. Content of Messages?
Whether written or spoken, personally or impersonally delivered, message content is
important . Advertising themes, wording, headlines, the use of color, size, layout, and
placement must be selected.
Some retailers use comparative advertising to contrast their offerings with competitors.
These ads help position a retailer relative to competitors, increase awareness of the firm,
maximize the efficiency of a limited budget, and offer credibility. Yet, they provide
visibility for competitors, may confuse people, and may lead to legal action.
Q20. Word of mouth?
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Perhaps the most vital long term promotion goal for any retailer is to gain positive word
of mouth (WOM), which occurs when one consumer talks to others.
If a satisfied customer refers friends to a retailer, this can build into a chain of customers.
No retailer can succeed if it receives negative WOM. Negative WOM will cause a firm
to lose substantial business.