Retail Communication Mix
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Transcript of Retail Communication Mix
Retail Communication Mix
Questions
■ What can retailers build brand equity for their stores and their private-label merchandise?
■ How are retailers using new approaches to communicate with their customers?
■ What are the strengths and weaknesses of the different methods for communicating with customers?
■ Why do retailers need to have an integrated marketing communication program?
■ What steps are involved in developing a communication program?■ How do retailers establish a communication budget?■ How can retailers use the different elements in a communication mix
to alter customers’ decision-making processes?
Objectives of Communication Program
Long-term• Build Brand (retailer’s name) Image• Create Customer Loyalty
Short-term • Increase Traffic • Increase Sales
Brands
Distinguishing name or symbol, such as a logo, that identifies the products or services offered by a seller and differentiates those products and services from those offered by competitors
Value of Brand Image
Value to Retailers
(Brand Equity)■ Attract Customers■ Build Loyalty■ Higher Prices Leading to
Higher Gross Margin■ Reduced Promotional Expenses■ Facilitates Entry into New Markets
Value to Customers■ Promises Consistent Quality■ Simplifies Buying Process■ Reduces Time and Effort
Searching for Information About Merchandise/Retailer
Building Brand Equity
Brand Equity
Create a High Level of Brand Awareness
Create Emotional Connections
Consistent Reinforceme
nt
DevelopFavorableAssociations
Benefits of High Brand Awareness
Aided Recall
Top Mind Awareness
Stimulates Visits
to Retailer
Creating Brand Awareness
Top-of-mindBrand
Awareness
Memorable Name
Repeated Exposure
SymbolsEvent
Sponsorship
Retailers Develop Associations with their Brand Name
Fashionable Products – Lifestyle, Pantaloons
Price/quality – Big Bazaar, KB Fair Price
Brand associations: anything linked to or connected with the brand name in a
consumer’s memory
Brand name is a set of associations that are usually organized around some meaningful
themes
McDonald’s Brand Associations
McDonald’s
Aalo Tikki
Burger
Reasonably Price
Fast Food
French Fries
Clean
Ronald McDona
ld
Consistent Reinforcement
The retailer’s brand image is developed and maintained through the retailer’s communication mix
Retail Communication Mix
Consistent Reinforcement through Integrated Marketing Communication Program
Integrated Marketing Communication Program
■ A program that integrates all of the communication elements to deliver a comprehensive, consistent message.
■ Providing a consistent image can be challenging for multichannel retailers – Need to consider the needs of all channels early in the planning of its communication program.
Integrated Marketing Communications
Present a Consistent Brand Image through all Communications with Customers
• Store Design
• Advertising
• Web Site
• Magalog (combination of a magazine and a catalogue)
Brand Extensions
■ Coke Coke to Diet Coke
■ Dove Dove cream bar to Dove shampoo
■ Parle Parle G to Parle G Atta
Communication Methods
Paid Impersonal Communications
■ Advertising
■ Sales promotions – Special events, In-store demonstrations
■ Games and contests
■ Coupons
■ Store atmosphere
■ Website
■ Community building
Store Atmosphere
The combination of the store’s physical characteristics (architecture, layout, signs and displays, colors, lighting, temperature, sounds, smells) together create an image in the customers’ mind
Mediacart
A shopping cart that delivers point-of-decision advertising
■ Informs the customer about special deals as the customer passes them in the aisle
■ Each video screen is embedded with an chip that interacts with chips installed on store shelves
■ Records shopping habits, how shoppers travel through the store, etc.
Community Building
Retailers’ Community Building Websites
It offer opportunities for customers with similar interests to learn about products and services that support their hobbies and share information with others
Paid Personal Communication
■ Retail salespeople are primary vehicle for providing paid personal communication to customers.
Personal selling – salespeople satisfy needs through face to face exchange of information
■ Email – retailers inform customers of new merchandise, receipt of order or when order has been shipped
■ Direct Mail■ M-Commerce (mobile commerce)
Unpaid Impersonal Communication
Publicity is communication through significant unpaid presentations about the retailer, usually a news story, in impersonal media. Effective medium for creating awareness, interest and credibility.
Little controlPublicity can be highly credible if it is well thought – out. It is extremely cheap also. A feature in a paper, magazine sometimes seem more credible to readers than ads BUT it is restricted by editorial decisions by the media source used• Newspaper• TV coverage
PR
The Gap, Emporio Armani, and Apple are among several retailers selling red products, a portion of the proceeds go to Product RED, a charity to wipe out AIDS in Africa
Unpaid Personal Communication
■ Word-of-mouth Can be favorable Can be detrimental Effective medium for creating interest and desire for
any brand and it is available at no very cheap cost.
■ Social Shopping A communication strategy in which consumers use
Internet to engage in the shopping process by exchanging preferences, thoughts, and opinions
Product/service reviews
Comparison of Communication Methods
Steps in Developing a Retail Communication Program
Planning the Retail Communication Program
Setting Objectives
■ Communication objectives:
Specific goals related to the retail communication mix’s effect on the customer’s decision-making process
Long-term: ex) creating or altering a retailer’s brand image
Short-term: ex) increasing store traffic
Retail and Vendor Communication Programs
Vendor
• Long-term objectives
• Product focused
• National
• Specific product
Retailer
• Short-term objectives
• Category focused
• Local
• Assortment of
merchandise
Setting the Communication Budget
• Marginal analysis
• Objective and task
• Rules of thumb
Affordable
Percent of sales
Competitive parity
Advertising Sales
Sales Advertising
Setting the Communication Budget
■ Marginal Analysis Method
Based on the economic principle that firms should increase communication expenditures as long as each additional dollar spent generates more than a dollar of additional contribution
Very hard to use because managers don’t know the relationship between communication expenses and sales
Objective-and-Task Method
■ Determines the budget required to undertake specific tasks to accomplish communication objectives
Illustration of Objective and Task Method for Setting a Communication Budget
Financial Implications of Increasing the Communication Budget
Rule of Thumb Methods
Affordable Budgeting Method – sets communication budget by determining what money is available after operating costs and profits are budgeted.
Drawback: The affordable method assumes that the communication expenses don’t stimulate sales and profits.
Percentage of Sales Method – communication budget is set as a fixed percentage of forecasted sales.
Drawback: This method assumes the same percentage used in the past, or by competitors, is still appropriate for the retailer.
Rule of Thumb Methods
Competitive Parity Method – this communication budget is set so that the retailer’s share of communication expenses equals its share of the market.
Drawback: This method (like the others) does not allow the retailer to exploit the unique opportunities or problems they confront in a market.
Allocation of the Promotional Budget
■ The retailer decides how much of its budget to allocate to specific communication elements, merchandise categories, geographic regions, or long- and short-term objectives
■ Budget allocation decision is more important budget amount decision
High-assay principle: The retailer allocate the budget to areas that will yield the greatest return
Thank You, All!