Retail Communication Mix

1. Chapter 16 Retail Communication Mix

2. 16-2 Merchandise Management

3. 16-3 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?

4. 16-4 Objectives of Communication Program

5. 16-5 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

6. 16-6 Value of Brand Image Value to Retailers (Brand Equity) Attract Customers Build Loyalty Higher Prices Leading toHigher Gross Margin Reduced Promotional Expenses Facilitates Entry into New MarketsGap ? GapKids

7. 16-7 Building Brand Equity

8. 16-8 Tar-Zhay

9. 16-9

10. 16-10 Apple

11. 16-11 Benefits of High Brand Awareness

12. 16-12 Creating Brand Awareness

13. 16-13 Retailers Develop Associations with their Brand Name

14. 16-14 McDonald’s Brand Associations

15. 16-15 L.L. Bean

16. 16-16 L.L. Bean’s Brand Associations

17. 16-17 Wal-Mart Associations

18. 16-18 Target Associations

19. 16-19 Consistent Reinforcement The retailer’s brand image is developed and maintained through the retailer’s communication mix

20. 16-20 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

21. 16-21 Integrated Marketing Communications Present a Consistent Brand Image through all Communications with Customers

22. 16-22 Brand Extensions Gap ? GapKids and Old Navy Talbots ? Talbuts Mens Sears ? Sears Auto Centers and the Great Indoors Pottery Barn ? Pottery Barn Kids

23. 16-23 Extending Brand Name to a New Concept Pluses Develop Awareness and Image Quickly Less Costs Needed to Promote Extension

24. 16-24

25. 16-25 Paid Impersonal Communications Advertising Sales promotions – Special events, In-store demonstrations Games, sweepstakes and contests Coupons Store atmosphere Website Community building

26. 16-26 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

27. 16-27 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 RFID chip that interacts with chips installed on store shelves Records shopping habits, dwell times, how shoppers travel through the store

28. 16-28 Community Building Retailers’ Community Building Websites offer opportunities for customers with similar interests to learn about products and services that support their hobbies and share information with others

29. 16-29 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)

30. 16-30 Unpaid Impersonal Communication

31. 16-31 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

32. 16-32 Unpaid Personal Communication Word-of-mouth Can be favorable Can be detrimental 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

33. 16-33 Social Shopping

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35. 16-35 Steps in Developing a Retail Communication Program

36. 16-36 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

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40. 16-40 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

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42. 16-42 Objective-and-Task Method Determines the budget required to undertake specific tasks to accomplish communication objectives

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45. 16-45 Rule of Thumb Methods

46. 16-46 Rule of Thumb Methods

47. 16-47 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