RETAIL PROMOTION STRATEGIES

PUMBA -MBA ++2012 B.Farhadi Roll number 267

RETAIL PROMOTION

Any communication by a retailer that informs, persuades, and/ or reminds the target market about any aspect of that firm Designed to promote the goods and services offered in the business district and to directly generate retail sales Can promote general services (e.g. invited hours for regular customers), convenience and special attractions

RETAIL PROMOTION ACTIVITIES

Cooperative promotionFocuses attention on a cluster of stores in the same category that can be promoted together. Could be used to generate customer traffic during otherwise slower periods Cross-retail promotionGroups businesses with complimentary goods in a single retail event or coordinated display. Can be used both to bring new customers to a district and to encourage those in the district to patronize additional businesses Niche promotionTargets specific consumer groups through specially distributed flyers, coupons, posters and/or media advertisements

PROMOTIONAL OBJECTIVES

Increase sales Stimulate impulse and reminder buying Raise customer traffic Get leads for sales personnel Present and reinforce the retailer image Inform customers about goods and services Popularize new stores and Web sites Capitalize on manufacturer support Enhance customer relations Maintain customer loyalty Have consumers pass along positive information to friends and others

CONTD

Make the 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

PROMOTIONAL OBJECTIVES
Improve Long-Run Performance Improve Short-Run Performance

Store Image and Positioning

Public Service

Attract New Customers

Increase Existing Customer Patronage

From Existing Trade Area

Expand Trade Area

MANAGEMENT OF PROMOTIONAL EFFORTS MUST FIT INTO A RETAILERS OVERALL STRATEGY

A retailers location will help determine the target area for promotions Retailers need high levels of traffic to keep merchandise moving promotion helps build traffic Retailers credit customers more store loyal and purchase on larger quantities making them an excellent target for promotions Promotions can increase short-run cash flow Promotional creativity and style should coincide with building and fixture creativity Promotion can be viewed as a major component of customer service because it provides information

ELEMENTS OF THE PROMOTIONAL MIX

Impersonal
1. Advertising 2. Sales promotion 3. Store atmosphere 4. Web site

Personal

1. Personal selling 2. E-mail marketing

Unpaid

Paid

1. Publicity

1. Word of mouth

PLANNING A RETAIL PROMOTIONAL STRATEGY

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 the target market and that are realistic to obtain.

PLANNING A RETAIL PROMOTIONAL STRATEGY

Determining promotional activities Establishing an overall promotional budget Selecting the promotional mix Implementing the promotional mix Reviewing and revising the promotional plan

SELECTED U.S. ADVERTISING-TO-SALES RATIOS BY TYPE OF RETAILER

Type of Retailer Advertising $ as a % of Sales Dollars 6.6 1.0 3.6 0.8 3.6 2.5 4.6 1.2 1.2 1.8 0.5 Advertising $ as % of Margin 16.7 2.3 10.3 3.2 16.1 8.3 13.8 4.9 3.8 8.1 1.7

Apparel and accessories stores Auto and home supply stores Department stores Drug and proprietary stores Eating places Family clothing stores Furniture stores Grocery stores Hobby, toy, and game shops Hotels and motels Lumber and building materials

ADVERTISING MEDIA COMPARISON CHART

Medium
Daily Papers

Market Coverage
Single community or entire metro area; local editions may be available Single community usually; may be a metro area Most households in one community; chain shoppers can cover a metro area Geographic area or occupational field served by the directory Controlled by the retailer

Particular Suitability
All larger retailers

Weekly Papers

Retailers with a strictly local market Neighborhood retailers and service businesses All types of goods and service-oriented retailers New and expanding firms, those using coupons or special offers, mail order

Shopper Papers

Phone Directories

Direct Mail

ADVERTISING MEDIA COMPARISON CHART

Medium
Radio

Market Coverage
Definable market area surrounding the station Definable market area surrounding the station Global

Particular Suitability
Retailers focusing on identifiable segments Retailers of goods and services with wide appeal All types of goods and service-oriented retailers Retailers near transit routes, especially those appealing to commuters Amusement and touristoriented retailers, well-known firms

TV

World Wide Web

Transit

Urban or metro community served by transit system Entire metro area or single neighborhood

Outdoor

ADVERTISING MEDIA COMPARISON CHART

Medium
National Magazines

Market Coverage
Nationwide

Particular Suitability
National chains

Local Magazines

Entire metro area or region, zoned editions sometimes available Single neighborhood

Restaurants, entertainmentoriented firms, specialty shops, mail-order firms Restaurants, dry cleaners, service stations, and other neighborhood firms

Flyers/ Circulars

NEWSPAPER ADVERTISING

YELLOW PAGES

The average consumer looks at: 4.32 ads. 70% of consumers look at the bigger ads when they are not sure where to make a purchase. 65% of consumers feel that a large ad signifies a business with an established reputation. 83% of consumers start looking at ads in the beginning of a heading.

DIRECT MAIL

MAGAZINE ADVERTISEMENTS

FLYERS/CIRCULARS

PERSONAL SELLING

Oral communication with one or more prospective customers for the purpose of making a sale

PERSONAL SELLING
Advantages

Disadvantages

Message can be adapted Many ways to meet customer needs High attention span Less waste Better response Immediate feedback

Limited number of customers handled at one time High costs Doesnt get customer in store Self-service discouraged Negative attitudes toward salespeople (aggressive, unhelpful)

SALES PROMOTION
Encompasses the paid communication activities other than advertising, public relations, and personal selling that stimulate consumer purchases and dealer effectiveness

SALES PROMOTIONS
Advantages Eye-catching appeal Distinctive themes and tools Additional value for customer Draws customer traffic Maintains customer loyalty Increases impulse purchases Fun for customers Disadvantages Difficult to terminate Possible damage to retailers image More stress on frivolous selling points Short-term effects only Used as a supplement

TYPES OF SALES PROMOTIONS

http://www.scapromotions.com/index.php

ADVANTAGES OF COUPONS

Manufacturers may pay to advertise and redeem them windfall to retailers since they generally receive 10-cent coupon handing fee ($500 million + in 2002) 99% of consumers redeem coupons at least once during the year (but only 2% of all coupons redeemed) People may forget coupon but buy anyway They contribute to the consumers perception of getting a good value Coupon redemption can serve as a measure of advertising effectiveness

CO-OP ADVERTISING

Supplier shares the cost of local advertizing. It is in the interest of both the parties Powerful way to build supplier-wholesaler relationship E.g. Plumbing and heating industry in US

THANK YOU