CHAPTER 11

COMMUNICATING THE PRODUCT OFFER

LEARNING OBJECTIVES An appreciation of the challenge associated with communicating a

retail product offer Understand the role product-related communications play in

achieving both short term and strategic objectives Explore the relationship between types of communication channel

and promotional objectives Understand the need for stock management support when

implementing promotions Introduce the concept of integrated retail communications Understand that retailer and supplier promotional objectives often

conflict, but benefits can be gained through collaboration

RETAILER TO CUSTOMER COMMUNICATIONS

The retail environment (see chapters 9 and 10) is an effective communication tool, but relies on customers being near or in outlet

Communications need to be sent further afield in order to achieve objectives long term, strategic, with more general aims short term, tactical, with specific aims

Communications need to support product management process and play an important role in reinforcing retailer’s market position

Table 11.1 Marketing communications’ objectives Strategic Operational and promotional Long term

Short term

Examples

Establishing a clear market position for a retailer

Increasing customer awareness of category X

Changing consumer’s attitudes towards a retailer

Increasing sales of brand Y

Improving a retailer’s image Increasing transaction levels per customer Portraying a retailer as a customer focused organisation

Informing customer that prices have been reduced

Enhancing a retailer’s reputation as a responsible corporation

Encouraging customers to buy product A with product B

RETAIL COMMUNICATION CHANNELS: ADVERTISING

Advantages: Effective way to communicate product offers due to large

‘reach’ High impact Targeted media vehicles can be chosen in line with

retailer’s target customer

Disadvantages: retailer may not have national coverage (store and product) difficult to portray extensive product range high cost

BOX 11.1 THE ADVANTAGES AND DISADVANTAGES OF USING CELEBRITIES IN RETAIL ADVERTISING ADVANTAGES DISADVANTAGES Recall – consumers will tend to remember the advertisement

High cost

Recognition – recognising the well known person draws attention to the retailer advertisement

Incorrect association – consumers remember the celebrity but not the retailer or their products

The positive feelings consumers have about the celebrity are transferred to the retailer

Celebrity may fall from grace, or suffer from over exposure, resulting in negative feelings being transferred from celebrity to retailer

The celebrity adds credibility if they have a strong association with the retailer’s product (valid endorsement)

Consumers may conclude celebrity is only ‘doing it for the money’, especially if they have little association with the retailer’s offer

Actors can be used to play roles, which can be used in scenarios to draw attention to particular aspects of a retailer’s offer

Consumers may tire of the same people being used in every advertisement for the retailer

Celebrity advertisements are often humorous, which aids recall and generates positive feelings

Some celebrities may not be known to some consumers, therefore the ‘point’ or humorous aspect of the advertisement may be lost

Use of celebrities in retailer advertising becomes too frequent and loses novelty

AMBIENT ADVERTISING

The placement of advertising in unexpected locations e.g. petrol pump, on floor in store

Use of in-store digital communications and plasma screens has enabled and fostered interest in this channelAdvantages

flexible high quality imaging message relayed close to purchase point

PRODUCT SPECIFIC PROMOTIONAL COMMUNICATIONS

The product range itself is an effective arena for product specific messages concerning objectives such as increasing sales of specific brand encouraging customer to try or trade up encouraging multiple purchases counteract promotions of competitor capitalise on seasonal sales

Sales promotion is a term that covers this type of activity and is normally supported by point of sale/purchase materials

.

P r i c e r e d u c t i o n

(m a r k d o w n ) o r o t h e r p r o d u c t s p e c i fi c p r i c e

p r o m o t i o n s

M u l t i b u y s / m u l t i s a v e s

L o y a l t y

s c h e m e s p r o g r a m m e s

C o u p o n s

S e a s o n a l s a l e s

(a c r o s s a l l

p r o d u c t s )

C o m p e t i t i o n s

D e m o n s t r a t i o n s a m p l i n g t r i a l s

S p e c i a l p a c k a n d q u a n t i t y

b o n u s

S p e c i a l e v e n t s

S i g n s

P a c k a g i n g

A u d i o a n n o u n c e d

e v e n t s

L e a f l e t s

FIGURE 11.1 SALES PROMOTION ACTIVITY AND P.O.P. SUPPORT

PROMOTIONAL PRODUCT PLANNING

Promotional activity to increase sales may be offensive, planned into forecast and buying budget

(see chapter 6): special offers defensive, to bring sales back in line with forecast:

reduced prices

Promotional planning can involve: co-ordination with media advertisements additional space allocation setting up POS materials and special displays

PROMOTIONAL PRODUCT PLANNING (2)

A promotion that aims to increase sales needs to be supported with extra stock (unless clearing stock) or investment into promotional activity is wasted

Efficient promotions (see ECR, chapter 3) are those that improve overall category performance, rather than transferring sales between brands

Well supported promotions with clear consumer benefits will strengthen retail image

Too many minor promotions that are not well supported may cause customer dissatisfaction and store ‘clutter’.

Collaborative planning (see CPFR, chapter 7) enables retailers and supplier to run promotions for mutual gain

STRATEGIC PRODUCT COMMUNICATIONS

Product ranges can be a vehicle for retailer-to-customer communications that achieve aims other than direct sales increase, such as improving retail brand image maintaining customer loyalty improving public relations providing interest and inspiration to customers providing opportunity for good publicity

Examples: cultural events, film releases, ‘ethical products’

PUBLICITY

Publicity, like other strategic communications can be managed but it cannot be controlled as it is not directly paid for can be positive or negative is highly credible

A pro-active public relations / media centre can help to maximise positive publicity minimise / counteract negative publicity generate publicity for promotional events

PERSONAL COMMUNICATIONS

Outlet space and sales personnel provide opportunities for direct personal communications

Personal communications are important when retailer sells complex products

Focused on personal selling, but in era of cross-format shopping, closing sale may be an inappropriate objective.

Arming sales personnel with high level of product knowledge and training in sales technique will help them to match product features and benefits to customer needs and wants

COMMUNICATION THROUGH PACKAGING

Packaging plays an important communications role in three ways how the product is packed up when sold how the product is presented to customer (especially

food products) provides vehicle for product information

Packaging can communicate tangible and intangible product benefits

INTEGRATING PRODUCT-RELATED COMMUNICATIONS

Communications work best if all channels are relaying consistent messages and the delivery of the messages is co-ordinated

Examples of integrated retail communication activity loyalty schemes using paid for media to advertise sales promotion

activity

Corporate identity should be integrated with promotional communications

INTERNAL COMMUNICATIONS

Retail product managers need to communicate product plans effectively to ensure proper implementation product information, especially new / improved product display planned promotional activity

Formalised and open product range feedback system is also part of internal communications

RETAILER-SUPPLIER ISSUES

Supporting a supplier’s promotional activity can pose difficulty for retailer - Different objectives:

supplier wishes to improve their brand performance retailer wishes to improve category performance

Attitude to POS materials and space allocation: supplier will want in-store support and extra space retailer may not be willing to give more space and may

consider POS to be clutter

Conflicting images Non-compliance with agreed promotions

CO-OPERATIVE PROMOTIONAL CAMPAIGNS

Benefits pooling of resources should result in better campaigns can give small retailer access to professional

promotional material and an opportunity to create interest

good image associations better co-ordination of timing of promotions cost of promotional activity included in product cost

prices

EVALUATION OF PRODUCT RELATED COMMUNICATIONS

Specific promotional activity: sales of specific product endurance of sales uplift sales of other products overall profits (e.g. category)

Strategic promotional activity: overall sales increased transaction levels customer loyalty improved retail brand image