1. Chapter 11 Advertising and Promotion

2. The Retail Promotion Mix
What is promotion?

3. The Retail Promotion Mix
What is promotion?
A means that retailers use to bring traffic into their stores, and includes…
Advertising,
Sales promotion,
Publicity, and
Personal selling.

4. 1. Advertising Definition: Key points:
Paid, non-personal communication through various media by business firms, and individuals who are in some way identified in the advertising message and who hope to inform and/or persuade members of a particular audience
Key points:
Performed by retailers (profit or nonprofit)
The retailer is identified within the message
Designed to persuade or inform
Includes, but not limited to:
Communication of products, services, institutions, and/or ideas

5. 2. Sales Promotion Definition: Key points:
Involves the use of media and non-media marketing pressure applied for a pre-determined, limited period of time at the level of consumer, retailer or wholesaler in order to stimulate trial, increase consumer demand, or improve product availability
Key points:
Uses both media and non-media
Runs for a limited, and pre-determined, period of time
Directed at the “customer” (final customer, retailer, wholesaler)
Has one of three end-goals
Stimulate trial, increase existing purchases, or expand availability

6. 3. Publicity Definition: Key points:
Non-paid-for communications of information about the company or product, generally in some media form
Key points:
Non-paid-for communication
Does not mean that no money has been spent
Provides some form of information about a company or product
Examples:
Macy’s parade
Del Frisco’s Double Eagle Steakhouse

7. 4. Personal Selling Definition: But why is this considered promotion?
Selling that involves a face-to-face interaction with the customer
But why is this considered promotion?

8. 4. Personal Selling Definition: But why is this considered promotion?
Selling that involves a face-to-face interaction with the customer
But why is this considered promotion?
Rationale:
It provides a service to the customer
Ease in information gathering
Such service enhances one’s value proposition
Value propositions are the reasons customers shop a store
What is the goal of a promotion – traffic

9. Integrated Effort
Promotion decisions relate to and must be integrated with other management decisions, such as:
Location
Merchandise
Credit
Cash flow
Building and fixtures
Price
Customer service

10. Promotion in the Supply Chain
Three major differences in the way retailers and manufacturers use promotion:
Consider which, the retailer or manufacturer, highlights each in their promotions:
Product image versus availability
Specific product benefits versus price
Focused image versus cluttered ads

11. Promotional Objectives
Long-term objectives
Institutional advertising
Promoting and selling the store itself rather than the merchandise in the store.
Short-term objectives
Promotional advertising
Promoting the product availability and price to increase short-term performance
Two major goals:
Increased patronage from existing customers
Attraction of new customers

12. Steps in Planning for a Retail Advertising Campaign
Select advertising objectives
Budget for the campaign
Design the message
Select media to use
Schedule ads
Evaluate results

13. Selecting Advertising Objectives
Advertising objectives are informed by one’s promotional objectives
Advertising objectives are very idiosyncratic, but should never include “to increase sales”. Why?
Generally though, all chosen objectives must be:
Aimed at a specific market segment
Measurable
Stated in terms of a specific time frame
Would this example be okay or poor? Why?
“increase the level of awareness by 30% over the next 6 months”

14. Budgeting for a “Retailer-Only” Campaign
Three general approaches:
Affordable Method
Allocates all the money that the retailer can afford for advertising in any given period.
Percentage-of-Sales Method
Targets a specific percentage of forecasted sales to be used for advertising
Task and Objective Method*

15. Designing the Message Creative ads should seek to accomplish 3 goals:
Attract attention and retain attention.
Achieve the objective of the advertising strategy.
Avoid errors, especially legal ones
Some approaches used attract & hold attention include:
Lifestyle
Fantasy
Humorous
Slice of life
Mood or image

16. Selecting Among Media Alternatives
Media Type
Advantages
Disadvantages
Newspaper Advertising
Most newspapers are local.
Requires a low level of technical skill.
Short interval between the time copy is written and when the ad appears.
Exposure to an issue of a newspaper does not mean the consumer read or even saw the retailer’s ad.
The life of any single issue of a newspaper is short.
Typical person spends relatively little time with each issue.
Poor reproduction quality.

17. Selecting Among Media Alternatives
Media Type
Advantages
Disadvantages
Local and Cable Television Advertising
Is a means of reaching the elusive full-price shopper.
Is a great image builder.
Can be a powerful tool for generating higher sales.
Is expensive, and may use up the total ad budget of a local retailer.
Competition is high for the viewer’s attention.
Radio advertising
It can target messages to select groups.
Offers a lot of flexibility.
Radio commercials, especially the uncreative ones, are not saved or referred to again like print media ads.
Lack of innovation; is nonvisual.

18. Selecting Among Media Alternatives
Media Type
Advantages
Disadvantages
Magazine Advertising
Has a better reproduction quality and a longer life span per issue.
The long lead time required prevents advertising with price appeals or any urgency in its messages.
Direct Mail
The retailer can precisely target its message to a particular group.
Can generally be easily measured, thus providing important feedback.
Is relatively expensive per contact or message delivered.
The ability to reach the target market depends totally on the quality of the mailing list.
High exposure to spam mails.

19. Media Selection Coverage
The theoretical maximum number of consumers in the retailer’s target market that can be reached by a medium and not the number actually reached.
Reach
Actual total number of target customers who come into contact with an advertising message.
Cumulative reach
Reach that is achieved over a period of time.
Frequency
The average number of times each person who is reached is exposed to an advertisement during a given time period.

20. Media Selection (cont.)
Cost per thousand method (CPM)
A technique used to evaluate advertisements in different media based on cost. The cost per thousand is the cost of the advertisement divided by the number of people viewing it, which is then multiplied by 1,000.
Cost per thousand—
target market
(CPM-TM)
Technique used to evaluate advertisements in different media based on cost. The cost per thousand per target market is the cost of the advertisement divided by the number of people in the target market viewing it, which is then multiplied by 1,000.
Impact
How strong an impression an advertisement makes and how well it ultimately leads to a purchase.

21. General Guidelines for Scheduling One’s Advertising
Ads should…
Appear on, or slightly proceed, the days when customers are most likely to purchase.
Be concentrated around the times when people receive their payroll checks.
Be concentrated during periods of high seasonal demand if the retailer has limited advertising funds.
Appear during the time of day/week when the lowest CPM will be obtained.
Spaced so that a greater amount of time exists between the advertisement and the purchase time, when a product class has a high level of habitual purchasing

22. Evaluating Advertising’s Results
Most ineffective advertising is due to:
Messages or sales getting discounted.
Advertising not appealing, not giving customers all the information they need, or not directed at the proper target market.
Advertising dollars spread too thinly.
Poor internal communications.
Too many last-minute changes in the advertising copy.
Retailer used a medium that reached too many people not in the target market.

23. Types of Sales Promotion

24. Publicity Management
When publicity is formally managed, it should be integrated with other elements of the promotion mix.
Major advantages of publicity
It’s perceived as more objective and credible
Likely to appeal to a mass audience.
Major disadvantages of publicity
It’s difficult to control and time
Rumors are just one event that is beyond one’s control and can be highly damaging.
Must be prepared for such events if at al possible.

25. What You Should Have Learned… Chapter’s Learning Objectives
The four basic components of the retailer’s promotional mix and their relationship with other decision areas.
The differences between a retailer’s long-term and short-term promotional objectives.
The six steps involved in developing a retailer’s advertising campaign.
How retailers manage their sales promotion & publicity.