Berman CH 19

Chapter 19
Promotional Strategy
RETAIL
MANAGEMENT:
A STRATEGIC
APPROACH,
9th Edition
BERMAN
EVANS
Chapter Objectives
To explore the scope of retail promotion
To study the elements of retail promotion:
advertising, public relations, personal
selling, and sales promotion
To discuss the strategic aspects of retail
promotion: objectives, budgeting, the mix
of forms, implementing the mix, and
reviewing and revising the plan
19-2
Elements of the Promotional Mix

Advertising
Public Relations
Personal Selling
Sales Promotion
19-3
Figure 19.1 Communicating Through

the Retail Promotion Mix
19-4
Advertising
Paid, nonpersonal communication
transmitted through out-of-store mass media
by an identified sponsor
Key aspects
* Paid form
* Nonpersonal presentation
* Out-of-store mass media
* Identified sponsor
19-5
Figure 19.2 Lands Ends Dominant

Business : Mail-Order Retailing
19-6
Table 19.1 Selected U.S. Advertisingto-Sales Ratios by Type of Retailer

Type of Retailer
Advertising $ as a % Advertising $ as %
of Sales Dollars
of Margin
Apparel and accessories stores
6.6
16.7
Auto and home supply stores
1.0
2.3
Department stores
3.6
10.3
Drug and proprietary stores
0.8
3.2
Eating places
3.6
16.1
Family clothing stores
2.5
8.3
Furniture stores
4.6
13.8
Grocery stores
1.2
4.9
Hobby, toy, and game shops
1.2
3.8
Hotels and motels
1.8
8.1
Lumber and building materials
0.5
1.7
19-7
Advertising Objectives for

Retailers
Lifting short-term sales
Increasing customer traffic
Developing and/or reinforcing a retail
image
Informing customers about goods and
services and/or company attributes
Easing the job for sales personnel
Developing demand for private brands
19-8
Advertising
Advantages
Attracts a large audience
Gains pass along
readership (for print)
Low cost per contact
Many alternatives available
Control over message
content; message can be
standardized
Message study possible
Editorial content surrounds
ad
Self-service operations
possible
19-9
Disadvantages
Standardized messages
lack flexibility
Some media require large
investments
Geographic flexibility
limited
Some media require long
lead time
Some media have high
throwaway rate
Some media limit the ability
to provide detailed
information
Table 19.2a Advertising Media

Comparison Chart
Medium
Market Coverage
Particular Suitability
Daily Papers
Single community or entire

metro area; local editions
may be available
All larger retailers
Weekly Papers
Single community usually;

may be a metro area
Retailers with a strictly local

market
Shopper Papers
Most households in one

community; chain shoppers
can cover a metro area
Neighborhood retailers and

service businesses
Phone Directories
Geographic area or
occupational field served by
the directory
All types of goods and

service-oriented retailers
Direct Mail
Controlled by the retailer
New and expanding firms,

those using coupons or
special offers, mail order
19-10
Table 19.2b Advertising Media

Comparison Chart
Medium
Market Coverage
Radio
Definable market area

surrounding the station
Retailers focusing on
identifiable segments
TV
Definable market area

surrounding the station
Retailers of goods and

services with wide appeal
World Wide Web
Global
All types of goods and

service-oriented retailers
Transit
Urban or metro community

served by transit system
Retailers near transit routes,

especially those appealing to
commuters
Outdoor
Entire metro area or single

neighborhood
Amusement and touristoriented retailers, well-known

firms
19-11
Table 19.2c Advertising Media

Comparison Chart
Medium
Market Coverage
Local Magazines
Entire metro area or region,

zoned editions sometimes
available
Restaurants, entertainmentoriented firms, specialty

shops, mail-order firms
Flyers/ Circulars
Single neighborhood
Restaurants, dry cleaners,

service stations, and other
neighborhood firms
19-12
Figure 19.3 Billboard Advertising

for Pedestrians and Motorists
19-13
Figure 19.4
Types of
Advertising
19-14
Planning a Cooperative Strategy

What ads qualify, in terms of merchandise and
special requirements?
What percentage of advertising is paid by
each party?
When can ads be run? In what media?
Are there special provisions regarding
message content?
What documentation is required for
reimbursement?
How does each party benefit?
Do cooperative ads obscure the image of
individual retailers?
19-15
Public Relations
Public Relations - Any communication that
fosters a favorable image for the retailer
among its publics
* Nonpersonal or personal
* Paid or nonpaid
* Sponsor-controlled or not
Publicity Any nonpersonal form of public
relations whereby messages are transmitted
through mass media, the time or space
provided by the media is not paid for, and
there is no identified commercial sponsor
19-16
Public Relations Objectives for

Retailers
Increase awareness of the retailer and its
strategy mix
Maintain or improve the company image
Show the retailer as a contributor to the
publics quality of life
Demonstrate innovativeness
Present a favorable message in a highly
believable manner
Minimize total promotion costs
19-17
Public Relations
Advantages
Image can be presented
or enhanced
More credible source
No costs for messages
time or space
Mass audience
addressed
Carryover effects
possible
People pay more
attention than to clearly
identified ads
19-18
Disadvantages
Some retailers do not
believe in spending on
image-related
communication
Little control over
publicity message
More suitable for short
run
Costs for PR staff,
planning activities, and
events
Figure 19.5 J.C. Penneys

Tips for Sales Associates
19-19
Personal Selling
Oral communication with one or more
prospective customers for the purpose of
making a sale
19-20
Personal Selling Objectives

for Retailers
Persuade customers to buy
Stimulate sales of impulse items or products
related to customers basic purchases
Complete customer transactions
Feed back information to company decision
makers
Provide proper levels of customer service
Improve and maintain customer satisfaction
Create awareness of items also marketed
through the Web, mail, and telemarketing
19-21
Personal Selling
Advantages
Message can be adapted
Many ways to meet
customer needs
High attention span
Less waste
Better response
Immediate feedback
19-22
Disadvantages
Limited number of
customers handled at
one time
High costs
Doesnt get customer in
store
Self-service discouraged
Negative attitudes
toward salespeople
(aggressive, unhelpful)
Types of Sales Positions

Order-taker
Order-getter
19-23
Figure 19.6 Personal Selling: When

Self-Service Isnt Appropriate
19-24
Figure 19.7 Typical Personal

Selling Functions
19-25
Sales Promotion
Encompasses the paid communication
activities other than advertising, public
relations, and personal selling that
stimulate consumer purchases and dealer
effectiveness
19-26
Types of Sales Promotions

Displays
Contests
Sweepstakes
Coupons
Frequent shopper
programs
19-27
Prizes
Samples
Demonstrations
Referral gifts
Other limited-time
selling efforts
Sales Promotions Objectives

for Retailers
Increasing short-term sales volume
Maintaining customer loyalty
Emphasizing novelty
Complementing other promotion tools
19-28
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
19-29
Disadvantages
Difficult to terminate
Possible damage to
retailers image
More stress on frivolous
selling points
Short-term effects only
Used as a supplement
Figure 19.8 Selected Reasons Why

Retail Sales Are Lost
19-30
Figure 19.9
Types
of
Sales
Promotions
19-31
Figure 19.10 Using

Point-of-Purchase Displays
19-32
Figure 19.12 The Ikea Playroom
19-33
Advantages of Coupons
Manufacturers may pay to advertise and
redeem them
99% of consumers redeem coupons at
least once during the year
They contribute to the consumers
perception of getting a good value
Coupon redemption can serve as a
measure of advertising effectiveness
19-34
Figure 19.11
Planning a
Retail
Promotional
Strategy
19-35
Promotional Objectives
19-36
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
Procedures for Setting a

Promotional Budget
All-you-can-afford method
Incremental method
Competitive parity method
Percentage-of-sales method
Objective-and-task method
19-37
Figure 19.13
Hi-Tech, InStore
Promotion
19-38
Figure 19.14 Promotion

and the Hierarchy of Effects
19-39
Implementation Decisions
Media
Timing
Content
Makeup of Sales Force
Sales Promotion Tools
Responsibility for Coordination
19-40

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Chapter 19

Elements of the Promotional Mix

Figure 19.1 Communicating Through

Figure 19.2 Lands Ends Dominant

Table 19.1 Selected U.S. Advertisingto-Sales Ratios by Type of Retailer

Apparel and accessories stores

Auto and home supply stores

Drug and proprietary stores

Family clothing stores

Hobby, toy, and game shops

Hotels and motels

Lumber and building materials

Advertising Objectives for

Table 19.2a Advertising Media

Single community or entire

All larger retailers

Single community usually;

Retailers with a strictly local

Most households in one

Neighborhood retailers and

All types of goods and

Controlled by the retailer

New and expanding firms,

Table 19.2b Advertising Media

Definable market area

Definable market area

Retailers of goods and

World Wide Web

All types of goods and

Urban or metro community

Retailers near transit routes,

Entire metro area or single

Amusement and touristoriented retailers, well-known

Table 19.2c Advertising Media

Entire metro area or region,

Restaurants, entertainmentoriented firms, specialty

Restaurants, dry cleaners,

Figure 19.3 Billboard Advertising

Planning a Cooperative Strategy

Public Relations Objectives for

Figure 19.5 J.C. Penneys

Personal Selling Objectives

Types of Sales Positions

Figure 19.6 Personal Selling: When

Figure 19.7 Typical Personal

Types of Sales Promotions

Sales Promotions Objectives

Figure 19.8 Selected Reasons Why

Figure 19.10 Using

Figure 19.12 The Ikea Playroom

Procedures for Setting a

Figure 19.14 Promotion

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