Retail communication and promotion

Marketing communications are the voice of the brand and are used to establish a dialogue and build relationships with customers

Retail promotions

The mix of communication activities designed to influence retailer publics

Influence consumer perceptions, attitude and behaviour in order to increase store visits, product purchase and store loyalty

Influence other stakeholders such as suppliers, journalists and local and national politicians

Common communication platformsAdvertising

Print/BroadcastPackagingBrochuresPostersLeafletsBillboardsPOP displaySymbols/logos

SalesPromotions

ContestsGamesGiftsSamplingFairsTrade showsCouponsDiscountsFinance optionsTrade-ins

Events andExperiences

SportsFestivalsArtsCausesFactory toursCompany museums

PRPress packsSpeechesSeminarsAnnual reportsCharityPublicationsCommunity relationsLobbyingCompany magazine

Personal sellingSales presentationsIncentive programmesTrade showsSamples

Direct marketing: Mailings, telesales, faxbroadcast, email, catalogues

For retailers MCP can build own brand equity

MARKETINGCOMMUNICATION

PROGRAMME

BRANDEQUITY

Brand awareness

Brand image

Brandresponses

Brand relationships

Advertising

Sales promotion

PR

PersonalSelling

DirectMarketing

Events andexperiences

How persuasive communications work – Response Hierarchy Models

AIDA (1) Hierarchy of effects (2)

Innovation- adoption (3)

Communication model (4)

Attention Awareness

Knowledge

Awareness

Exposure

Reception

Cognitive

response

AFFECTIVE

Interest

Desire

Liking

Preference

Conviction

Interest

Evaluation

Attitude

Intention

Action Purchase

Trial

Adoption

Behaviour

COGNITIVE

BEHAVIOUR

1. Strong, The Psychology of selling. 2. Lavidge and Steiner. 3 Everett Rogers. 4. Various sources from Kotler and Keller

Promotional objectives

Identify target group Identify specific product or category Set specific goals Agree main communication points and

method Define the time horizon

“To ensure that the parents of children aged between 4 and 16 within eachstore catchment area receive information on back to school children’s offers.To grow sales for these products by £xx for school wear and £xx for schoolrelated equipment by September 1.”

Advertising

Paid for time or space media communication Change attitudes, build image, encourage

trial, grow sales Create awareness of the store and range of

offers Can reach large numbers simultaneously with

simple message

“Every little helps”“Spend a little. Live a lot”

“More reasons to shop at Morrisons”

Types of advertising

Product: new, exclusive, superior merchandise or service

Markdown event: create excitement about genuine “sale” event

Retailer brand: sell the store, core vales, commitment to customers, experiences

Co-operative: manufacturer funded mail drops/leaflets promoting offers and discounts

Windows: capture focal attention, distinctive image, promote seasonal activity

Window displays

ID Magasin research suggest only 7% - 9% of passing traffic will notice store display

Bottom third of window has greatest impact View through the door is more important Clear simple messages Use of technology, movement, lighting, colour

to create dramatic effect

Push and pull promotional strategy

CUSTOMERMANUFACTURERRETAILER

Promotes the benefits ofthe product

Pull strategy – create demand for the productthrough advertising and fund retailer promotionalactivity

Push strategy – push the consumer through the channelby advertising store benefits

Sales promotion

Offers and incentive to achieve a desired result

Mostly short term use but can become central to marketing effort and difficult to terminate

Often used in combination with other tools to supplement overall marketing effort

Types of sales promotions

POINT OF SALE Window,,floor, counter display to induce impulse buy

CONTESTS Competitions for prizes to promote retailer brand

SWEEPSTAKES Random prize draws

COUPONS Money off voucher for in-store purchase

REPEAT SHOPPER Points/stamps/rewards for frequent purchase

LINKED PURCHASE Threshold level spending leads to money off other goods

DEMONSTRATIONS In-store demonstration of benefits or product testing

REFERRAL GIFTS Gifts to introduce new users

BOGOF Money saving but can stimulate demand for other items

BRANDED GIFTS Pens, bags other branded giveaways

SAMPLES Sachets, samples instore or in print media

PREMIUM Include free gift to encourage repeat purchase

SPECIAL EVENT Fashion shows, autograph sessions, store opening events

Relationships and loyalty - CRM “Identify and establish, maintain and enhance and

when necessary terminate relationships with customers, at a profit so that the objectives of all parties are met; and this is done by mutual exchange and fulfilment of promises” (Gronroos)

“Managing detailed information about individual customers and carefully managing all customer touch points to maximise customer loyalty…to provide excellent realtime service through the effective use of individual account information” (Kotler and Keller)

Loyalty

Retention can be a measure of inertia and apathy – not loyalty

Griffin (1995): attachment to company/brand is shaped by degree of preference and degree of perceived differentiation

How loyalty schemes create value More purchases more often – conscious choice to commit to

brand in exchange for reward. Additional valued reason for choice

Mass customise marketing communication – talk to individual customers

Asset value of the data – what’s actually happening in every store to every customer

Trend tracking – what customers are buying and what they’re not Minimise wasted marketing effort – better targeting through real

customer insight Promote trust – built on knowledge and understanding and

consistently delivering on promises

The Clubcard customer contract

Identify individualcustomers

Reward involvement,spend, consolidationof spend.

Build dynamiccustomer knowledge

Create accuratesegmentation formarketing efficiency

Enable more personalmore relevant service tocustomers The customer

contract

Loyalty segments (based on Dick and Basu 1994)

TRUE LOYAL

Gofton 1995 only 17% buy same brand in 50%+ product service sectors they use. Understand why loyalty is divided

LATENT LOYALTY

Well disposed but not heavy user

Using other suppliers?

Create attitudinal attachment

FALSE LOYALTY

Apathy, inertia, high switching costs

Increase degree of positive differentiation

NO LOYALTY

No perceived difference

Frequent price switches

Communicate distinct advantages

Behaviour

High repeat purchase Low repeat purchase

Attitude

Highattachment

Lowattachment

Loyalty lessons from Tesco: the dunnhumby loyalty cube

Customer Contribution

Commitment

Championing

All customers can be placed at some point inthe loyalty cube

Location determinesmarketing action to earnloyalty

Contribution

Should you reward “profitability” or “loyalty” eg low spending loyal versus high spending but promiscuous

High spender may take more rewards but not be loyal

Encourage loyalty, not just profitability

Commitment

Future value based on “headroom” Potential to be more valuable in the future What emerging financial needs can be

assumed/identified and targeted Strengthen the bond

Championing

Loyal customers as brand ambassadors Benefits become an aspiration for friends and

associates Word of mouth/pass on your long term

opinion Long term value of a low value but loyal

customer may be in recruiting higher customers

Emotional attachment

“Marketing people use the expression emotional attachment in too free a way. People have an emotional bond to Tesco in that they feel we are on their side…that we look out for their interests…and most important we deliver on our promises. It’s the sort of customer thinking that says ‘Tesco has always done alright by me.’ On the one hand that sounds rather dull, but it is actually massively valuable. It is, infact, branding”

Tim Mason

Other ideas about loyalty

Clubs that identify real emotional needs “The only club that is worth running is one that

satisfies a genuine customer need, because they’re the ones that consumers are interested in” Tim Mason

Unconditional benefits are powerful. An up-front reward gains positive perceptions and influences shopping behaviour in a valuable direction

Be a “chosen” not a “given”. People value most what they actively choose

Personal selling

Retailer gain through face to face or telephone contact between seller’s representative and customers/clients

Based on trust (perceived credibility) of seller representative and seller company

Trust is an important driver of loyalty intention and loyalty behaviour

Sales staff activity in low-risk low-priced retailer environment is transaction based

In high – risk, high – price activity is information/expertise based

The retail selling process (Gilbert)1. Preparing through skills and knowledge

Feedback and learning from prior listening and training

2. Anticipating and identifying a prospective sale

Feedback and learning from prior listening and understanding customer

3. Method of approaching potential customer and task

Feedback and learning from prior listening and asking appropriate questions

4.Presenting the features and benefits

Establish customer need and pocket, active selling and listening to check acceptability

5. Dealing with concerns Active listening to revise argument and overcome objections

6. Building obligation and commitment

Active listening to ensure offer is acceptable and sale can be concluded

7. Establish affinity and relationship

Close the sale, reinforce the relationship through customer delight

Summary: retail promotions

A complex series of communications concerning store and offerings

Traditional promotional mix tools include advertising, sales promotion, personal selling and PR

Retail atmospherics and visual merchandising play a vital role in promotional strategy

A consistently good set of promotional campaigns help establish a store’s long term image and position

Advertising is used to inform, persuade and remind consumers of the store’s value proposition

Sales promotions encourage trial, repeat purchase and generate short term sales increase

PR allows other media channels to act as opinion leaders for the retailer’s personality and image