Retail Promotion Strategies

RETAIL PROMOTION STRATEGIES
PUMBA -MBA ++2012 B.Farhadi Roll number 267
RETAIL PROMOTION

Any communication by a retailer that informs, persuades, and/ or reminds the target market about any aspect of that firm Designed to promote the goods and services offered in the business district and to directly generate retail sales Can promote general services (e.g. invited hours for regular customers), convenience and special attractions
RETAIL PROMOTION ACTIVITIES

Cooperative promotionFocuses attention on a cluster of stores in the same category that can be promoted together. Could be used to generate customer traffic during otherwise slower periods Cross-retail promotionGroups businesses with complimentary goods in a single retail event or coordinated display. Can be used both to bring new customers to a district and to encourage those in the district to patronize additional businesses Niche promotionTargets specific consumer groups through specially distributed flyers, coupons, posters and/or media advertisements

PROMOTIONAL OBJECTIVES

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
CONTD

Make the objectives measurable and obtainable
Develop total promotional campaigns, not just ads New stores need higher promotional budgets than established stores
Stores in out-of-the-way locations require higher promotional budgets than stores with heavy traffic
PROMOTIONAL OBJECTIVES
Improve Long-Run Performance Improve Short-Run Performance
Store Image and Positioning
Public Service
Attract New Customers
Increase Existing Customer Patronage
From Existing Trade Area
Expand Trade Area
MANAGEMENT OF PROMOTIONAL EFFORTS MUST FIT INTO A RETAILERS OVERALL STRATEGY

A retailers location will help determine the target area for promotions Retailers need high levels of traffic to keep merchandise moving promotion helps build traffic Retailers credit customers more store loyal and purchase on larger quantities making them an excellent target for promotions Promotions can increase short-run cash flow Promotional creativity and style should coincide with building and fixture creativity Promotion can be viewed as a major component of customer service because it provides information
ELEMENTS OF THE PROMOTIONAL MIX

Impersonal
1. Advertising 2. Sales promotion 3. Store atmosphere 4. Web site
Personal
1. Personal selling 2. E-mail marketing
Unpaid
Paid
1. Publicity
1. Word of mouth
PLANNING A RETAIL PROMOTIONAL STRATEGY
PROMOTIONAL GUIDELINES

Utilize promotions that are consistent with and enhance store image. Review success or failure of each promotion to help in developing future promotions.
Test new promotions when possible. Use appeals that are of interest to the target market and that are realistic to obtain.
PLANNING A RETAIL PROMOTIONAL STRATEGY

Determining promotional activities Establishing an overall promotional budget Selecting the promotional mix Implementing the promotional mix Reviewing and revising the promotional plan
SELECTED U.S. ADVERTISING-TO-SALES RATIOS BY TYPE OF RETAILER

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

Medium
Daily Papers
Market Coverage
Single community or entire metro area; local editions may be available Single community usually; may be a metro area Most households in one community; chain shoppers can cover a metro area Geographic area or occupational field served by the directory Controlled by the retailer
Particular Suitability
All larger retailers
Weekly Papers
Retailers with a strictly local market Neighborhood retailers and service businesses All types of goods and service-oriented retailers New and expanding firms, those using coupons or special offers, mail order
Shopper Papers
Phone Directories
Direct Mail

Medium
Radio
Market Coverage
Definable market area surrounding the station Definable market area surrounding the station Global
Retailers focusing on identifiable segments Retailers of goods and services with wide appeal All types of goods and service-oriented retailers Retailers near transit routes, especially those appealing to commuters Amusement and touristoriented retailers, well-known firms
TV
World Wide Web
Transit
Urban or metro community served by transit system Entire metro area or single neighborhood
Outdoor

Medium
National Magazines
Market Coverage
Nationwide
National chains
Local Magazines
Entire metro area or region, zoned editions sometimes available Single neighborhood
Restaurants, entertainmentoriented firms, specialty shops, mail-order firms Restaurants, dry cleaners, service stations, and other neighborhood firms
Flyers/ Circulars
NEWSPAPER ADVERTISING
YELLOW PAGES

The average consumer looks at: 4.32 ads. 70% of consumers look at the bigger ads when they are not sure where to make a purchase. 65% of consumers feel that a large ad signifies a business with an established reputation. 83% of consumers start looking at ads in the beginning of a heading.
DIRECT MAIL
MAGAZINE ADVERTISEMENTS
FLYERS/CIRCULARS
PERSONAL SELLING
Oral communication with one or more prospective customers for the purpose of making a sale
PERSONAL SELLING
Advantages

Disadvantages

Message can be adapted Many ways to meet customer needs High attention span Less waste Better response Immediate feedback
Limited number of customers handled at one time High costs Doesnt get customer in store Self-service discouraged Negative attitudes toward salespeople (aggressive, unhelpful)
SALES PROMOTION
Encompasses the paid communication activities other than advertising, public relations, and personal selling that stimulate consumer purchases and dealer effectiveness
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 Disadvantages Difficult to terminate Possible damage to retailers image More stress on frivolous selling points Short-term effects only Used as a supplement
TYPES OF SALES PROMOTIONS
http://www.scapromotions.com/index.php
ADVANTAGES OF COUPONS

Manufacturers may pay to advertise and redeem them windfall to retailers since they generally receive 10-cent coupon handing fee ($500 million + in 2002) 99% of consumers redeem coupons at least once during the year (but only 2% of all coupons redeemed) People may forget coupon but buy anyway They contribute to the consumers perception of getting a good value Coupon redemption can serve as a measure of advertising effectiveness
CO-OP ADVERTISING

Supplier shares the cost of local advertizing. It is in the interest of both the parties Powerful way to build supplier-wholesaler relationship E.g. Plumbing and heating industry in US
THANK YOU

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RETAIL PROMOTION STRATEGIES

PUMBA -MBA ++2012 B.Farhadi Roll number 267

RETAIL PROMOTION ACTIVITIES

Make the objectives measurable and obtainable

Store Image and Positioning

Attract New Customers

Increase Existing Customer Patronage

From Existing Trade Area

Expand Trade Area

MANAGEMENT OF PROMOTIONAL EFFORTS MUST FIT INTO A RETAILERS OVERALL STRATEGY

ELEMENTS OF THE PROMOTIONAL MIX

1. Personal selling 2. E-mail marketing

PLANNING A RETAIL PROMOTIONAL STRATEGY

PLANNING A RETAIL PROMOTIONAL STRATEGY

SELECTED U.S. ADVERTISING-TO-SALES RATIOS BY TYPE OF RETAILER

ADVERTISING MEDIA COMPARISON CHART

ADVERTISING MEDIA COMPARISON CHART

World Wide Web

ADVERTISING MEDIA COMPARISON CHART

TYPES OF SALES PROMOTIONS

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