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Retail communications done

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Retail communications done

  1. 1. 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? 16-1
  2. 2. Objectives of Communication Program Long-term Build Brand (retailer’s name) Image Create Customer Loyalty Short-term Increase Traffic Increase Sales 16-2
  3. 3. 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 The McGraw-Hill Companies, Inc./John Flournoy, photographer The McGraw-Hill Companies, Inc./Bob Coyle, photographer 16-3
  4. 4. Value of Brand Image Value to Retailers (Brand Equity) Value to Customers ■ Attract Customers ■ Build Loyalty ■ Higher Prices Leading to Higher Gross Margin ■ Reduced Promotional Expenses ■ Facilitates Entry into New Markets Gap  GapKids ■ Promises Consistent Quality ■ Simplifies Buying Process ■ Reduces Time and Effort Searching for Information About Merchandise/Retailer 16-4
  5. 5. Building Brand Equity Create a High Level of Brand Awareness Develop Favorable Associations Brand Equity Consistent Reinforcement Create Emotional Connections 16-5
  6. 6. Tar-Zhay The McGraw-Hill Companies, Inc./Lars Niki, photographer 16-6
  7. 7. 16-7
  8. 8. Apple 16-8
  9. 9. Benefits of High Brand Awareness Aided Recall Top Mind Awareness Stimulates Visits to Retailer 16-9
  10. 10. Creating Brand Awareness Memorable Name Best Buy Home Depot Symbols Top-of-mind Brand Awareness Macy’s Repeated Exposure Starbuck’s Event Sponsorship 16-10
  11. 11. Retailers Develop Associations with their Brand Name Brand name is a set of associations that are usually organized around some meaningful themes Brand associations: anything linked to or connected with the brand name in a consumer’s memory Merchandise Category – Office Depot – office supplies Price/quality – Neiman Marcus –, high fashion merchandise Specific attribute or benefit – 7-Eleven – convenience Lifestyle or activity – Electronic Boutique – computer games 16-11
  12. 12. McDonald’s Brand Associations Fast Food Golden Arches Big Mac McDonald’s French Fries Ronald McDonald Clean 16-12
  13. 13. L.L. Bean 16-13
  14. 14. L.L. Bean’s Brand Associations New England Practical Friendly L.L. Bean Expertise Honest Outdoors 16-14
  15. 15. Wal-Mart Associations 16-15
  16. 16. Target Associations 16-16
  17. 17. Consistent Reinforcement The retailer’s brand image is developed and maintained through the retailer’s communication mix Retail Communication Mix 16-17
  18. 18. 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 16-18
  19. 19. Integrated Marketing Communications Present a Consistent Brand Image through all Communications with Customers •Store Design •Advertising •Web Site •Magalog The McGraw-Hill Companies, Inc./Andrew Resek, photographer 16-19
  20. 20. Brand Extensions ■ ■ ■ ■ Gap  GapKids and Old Navy Talbots  Talbuts Mens Sears  Sears Auto Centers and the Great Indoors Pottery Barn  Pottery Barn Kids The McGraw-Hill Companies, Inc./Andrew Resek, photographer 16-20
  21. 21. Extending Brand Name to a New Concept Pluses ■ Develop Awareness and Image Quickly ■ Less Costs Needed to Promote Extension Minuses ■ Associations Might Not Be Compatible with Extension Limited  Victoria’s Secret Abercrombie & Fitch  Hollister 16-21
  22. 22. Communication Methods 16-22
  23. 23. Paid Impersonal Communications ■ ■ ■ ■ ■ ■ ■ Advertising Sales promotions – Special events, In-store demonstrations Games, sweepstakes and contests Coupons Boxes of KrustyO’s cereal at a New York 7Store atmosphere Eleven stores, temporarily converted into a Website Kwik-E Mart, to promote the Simpson Movie. Community building Jack Star/PhotoLink/Getty Images 16-23
  24. 24. 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 16-24
  25. 25. 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 16-25
  26. 26. 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 16-26
  27. 27. 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) 16-27
  28. 28. Unpaid Impersonal Communication Publicity is communication through significant unpaid presentations about the retailer, usually a news story, in impersonal media. • Newspaper • TV coverage • Macy’s Thanksgiving Day Parade 16-28
  29. 29. 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 16-29
  30. 30. 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 16-30
  31. 31. Social Shopping 16-31
  32. 32. Comparison of Communication Methods 16-32
  33. 33. Planning the Retail Communication Program Steps in Developing a Retail Communication Program 16-33
  34. 34. 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 16-34
  35. 35. Communication Objectives & Stages in the Consumers Decision-Making Process 16-35
  36. 36. Retail and Vendor Communication Programs Vendor Retailer • Long-term objectives • Short-term objectives • Product focused • Category focused • National • Local • Specific product • Assortment of merchandise 16-36
  37. 37. Setting the Communication Budget • Marginal analysis Advertising Sales • Objective and task • Rules of thumb Sales Advertising - Affordable - Percent of sales - Competitive parity 16-37
  38. 38. 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 16-38
  39. 39. Marginal Analysis for Setting Communication Budget 16-39
  40. 40. Objective-and-Task Method ■ Determines the budget required to undertake specific tasks to accomplish communication objectives 16-40
  41. 41. Illustration of Objective and Task Method for Setting a Communication Budget 16-41
  42. 42. Financial Implications of Increasing the Communication Budget 16-42
  43. 43. Rule of Thumb Methods Affordable Budgeting Method – sets communication budget by determining what money is available after operating costs and profits are budgeted. Percentage of Sales Method – communication budget is set as a fixed percentage of forecasted sales. Drawback: The affordable method assumes that the communication expenses don’t stimulate sales and profits. Drawback: This method assumes the same percentage used in the past, or by competitors, is still appropriate for the retailer. 16-43
  44. 44. 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. 16-44
  45. 45. 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 16-45