1. Retail Communication Mix
Chapter 16
Retail Communication Mix
McGraw-Hill/Irwin
Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

2. Questions
What is a brand? How can retailers build brand equity for their stores and merchandise?
What are the primary methods retailers use to communicate with their 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?

3. What is the Purpose of the Retailer’s Communication program?
Informs customers about the retailer as well the merchandise and services it offers
Plays a role in developing customer loyalty

4. Effects of the Communication Program
Long-term
Build image (brand equity) of
the retailer
Differentiate from competition
Short-term
Increase Traffic
Increase Sales

5. What is a Brand?
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

6. Why are Brands Valuable?
Value to Retailers
Attract Customers
Build Loyalty
Higher Prices Leading to Higher Gross Margin
Value to Customers
Simplifies Buying Process
Reduces Time and Effort Searching for Information About Merchandise/Retailer
Provides social and psychological benefits

7. How to Build Strong Retail Brands
Build brand awareness
The ability of a potential customer to recognize or recall the retailer’s brand
Desire top of mind awareness
Build positive brand associations
Anything linked to or connected with the brand name in a consumers’ memory
Consistently reinforce
Consistently communicate the same message to customers over time and across all elements of the communication program and the retail mix

8. McDonald’s Brand Associations
Golden Arches
Fast Food
Big Mac
McDonald’s
French Fries
Ronald McDonald
Clean

9. Wal-Mart Associations

10. Integrated Marketing Communications
A program that integrates all of the communication elements to deliver a comprehensive, consistent message

11. Integrated Marketing Communications
Present a Consistent Brand Image through all Communications with Customers
Sales Promotion
Advertising
Web Site
Personal Selling
Publicity
The McGraw-Hill Companies, Inc./Andrew Resek, photographer

12. Communication Methods
Advertising
Sales Promotion
Store Web Site
Personal Selling
program
M-Commerce
Direct Mail
Publicity
Special Events and Sponsorships
Specialty Items and Collateral Materials

13. Advertising
Any paid form of nonpersonal communication through the mass media about a good, service, or idea by an identified sponsor.
Examples – newspaper, magazine, radio , TV, billboards, yellow pages, internet, and in store advertising

14. Sales Promotion
Short-term incentives used to encourage customers to visit a store or purchase merchandise during a specific period of time.
Examples - coupons, contests, sweepstakes, premiums, free samples, in store demonstrations
Boxes of KrustyO’s cereal at a New York 7-Eleven stores, temporarily converted into a Kwik-E Mart, to promote the Simpson Movie.
Jack Star/PhotoLink/Getty Images

15. Publicity
News carried by the media about a firm at no charge to the organization for media space.
Newspaper article
TV coverage
Macy’s Thanksgiving Day Parade

16. Direct Mail
Refers to any brochure, catalog, advertisement, or other printed material delivered directly to the consumer through the mail
Use of data collected through POS terminals
Use of list brokers

17. Personal Selling
Direct face to face communication between sellers and potential buyers

18. Steps in Developing a Retail Communication Program
Establish Communication Objectives Determine the Communication Budget Determine Communication Strategies and Tactics Implement and Evaluate the Plan

19. Setting Objectives Definition
Specific goals related to the retail communication mix’s effect on the customer’s decision-making process.
Examples
Create awareness of store
Create knowledge of store offerings
Correct misconceptions, improve customer attitudes
Remind customers of store
Criteria
Clearly defined target market
Degree of changed desired
Time frame

20. Communication Objectives & Stages in the Consumers Decision-Making Process

21. Communication Budget Methods
Percent of sales
Affordable
Competitive Parity
Objective and Task

22. Objective and Task Method
Establish Objectives
(create awareness of new product among 20 percent of target market)
Establish Objectives
(create awareness of new product among 20 percent of target market)
Determine Specific Tasks
(advertise on market area television and radio and local newspapers)
Determine Specific Tasks
(advertise on market area television and radio and local newspapers)
Estimate Costs Associated with Tasks
(determine costs of advertising, promotions, etc.)
Estimate Costs Associated with Tasks
(determine costs of advertising, promotions, etc.)
Relation to text This slide relates to material on pp and Figure 7-19 of the text.
Summary Overview This slide outlines the three steps of the objective and task method of budgeting. This method reflects a bottom-up approach to budgeting and involves the following steps:
Establishing objectives – specific communication objectives to be achieved are established
Determine specific tasks – determine the specific tasks needed to accomplish the communication objectives. May include advertising in various media, developing programs involving sales promotions and/or other elements of the promotional mix.
Estimate costs associated with tasks – determining what it will cost to perform the specific tasks that must be performed to achieve the objectives.
Monitor – performance should be monitored and evaluated in light of the budget appropriated.
Reevaluate objectives – once specific objectives have been attained, monies may be better spent on new goals.
Use of this slide This slide can be used to discuss the objective and task method of setting the advertising and promotion budget. The main advantage of using this approach is that the budget is driven by the objectives to be attained rather than some predetermined amount management is willing to spend. A disadvantage of this method is the difficulty in determining which tasks will be required and the costs associated with each.
© 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin