Chapter 11 Advertising and Promotion Chapter 11 Advertising and Promotion.
-
Upload
juniper-franklin -
Category
Documents
-
view
273 -
download
17
Transcript of Chapter 11 Advertising and Promotion Chapter 11 Advertising and Promotion.
Chapter 11
Advertising and Promotion
Chapter 11
Advertising and Promotion
The Retail Promotion MixThe Retail Promotion Mix
PromotionPromotion
is a means that retailers use to bring is a means that retailers use to bring traffic into their stores, and it includes traffic into their stores, and it includes advertising, sales promotion, publicity, advertising, sales promotion, publicity,
and personal selling.and personal selling.
Promotion in the ChannelPromotion in the Channel
Major differences in the way retailers and Major differences in the way retailers and manufacturers use promotion: manufacturers use promotion:
1. Product image versus availability1. Product image versus availability
2. Specific product benefits versus price2. Specific product benefits versus price
3. Focused image versus cluttered ads3. Focused image versus cluttered ads
Promotional Mix ElementsPromotional Mix Elements
Personal SellingPersonal Selling
Steps in the Steps in the Buying ProcessBuying Process
Steps in the Steps in the Selling ProcessSelling Process
Approach the Customer
Collect Information
Present/demonstrate product & overcome reservations
Make (Close) the Sale
Build Relationships for Future Sales
Problem Recognition
Information Search
Alternative Evaluation
Alternative Choice
Postpurchase Evaluation
Customer ReservationsCustomer ReservationsTiming:
I haven’t made up my mind
Store:I don’t know
about the return policy
Merchandise:I don’t think this
is made well
Location:I can’t find it
Salesperson:I don’t like
him
Price:This is too expensive
Nonverbal Signals that a Nonverbal Signals that a Customer is Ready to BuyCustomer is Ready to Buy
Resisting a salesperson’s attempt to move the Resisting a salesperson’s attempt to move the product out of the wayproduct out of the way
Intently studying or reexamining the merchandise Intently studying or reexamining the merchandise from various anglesfrom various angles
Smiling or appearing excited when looking at the Smiling or appearing excited when looking at the itemitem
Handling or using the product for a second or third Handling or using the product for a second or third timetime
Moving to a more work-oriented spaceMoving to a more work-oriented space
Verbal Signals that a Verbal Signals that a Customer is Ready to BuyCustomer is Ready to Buy
““I guess the blue paint goes better with my I guess the blue paint goes better with my wallpaper than the gray paint.”wallpaper than the gray paint.”
““Can you alter the pants?”Can you alter the pants?” ““Did you say this has a one year guarantee?”Did you say this has a one year guarantee?” ““Do you have this desk in a darker wood?”Do you have this desk in a darker wood?” ““I’ve always wanted a food processor.”I’ve always wanted a food processor.”
Building Relationships for Building Relationships for Future SalesFuture Sales
Reaffirming the Customer’s JudgmentReaffirming the Customer’s Judgment Ensuring Proper Use of the MerchandiseEnsuring Proper Use of the Merchandise Handling Customer ComplaintsHandling Customer Complaints Remembering the Customer between VisitsRemembering the Customer between Visits Providing Above-and-Beyond ServiceProviding Above-and-Beyond Service Building Special RelationshipsBuilding Special Relationships
Promotional Mix ElementsPromotional Mix Elements
Personal SellingPersonal Selling AdvertisingAdvertising
Daily
News
Advertising Expenditures as a Advertising Expenditures as a Percentage of Sales for Some RetailersPercentage of Sales for Some Retailers
Ad DollarsAd Dollars
Line of TradeLine of Trade As Percentage of SalesAs Percentage of Sales
Building materials & hardwareBuilding materials & hardware
Home Depot, Inc.Home Depot, Inc. 0.50.5
Lowe’sLowe’s 0.60.6
Payless CashwaysPayless Cashways 1.21.2
Department StoresDepartment Stores
DillardsDillards 4.44.4
May Department StoreMay Department Store 3.83.8
JCPenney Co.JCPenney Co. 3.33.3
Sears Roebuck & Co.Sears Roebuck & Co. 4.44.4
Advertising Expenditures as a Advertising Expenditures as a Percentage of Sales for Some RetailersPercentage of Sales for Some Retailers
Ad DollarsAd Dollars
Line of TradeLine of Trade As Percentage of SalesAs Percentage of Sales
Family clothing storesFamily clothing stores
Abercrombie & FitchAbercrombie & Fitch 3.53.5
American Eagle Outfitters, IncAmerican Eagle Outfitters, Inc 3.13.1
Grocery storesGrocery stores
AlbertsonsAlbertsons 1.51.5
Great Atlantic & Pacific Tea CoGreat Atlantic & Pacific Tea Co 1.41.4
Kroger CoKroger Co 1.11.1
Pathmark Stores IncPathmark Stores Inc 0.50.5
Publix Super Markets IncPublix Super Markets Inc 1.11.1
Advertising Expenditures as a Advertising Expenditures as a Percentage of Sales for Some RetailersPercentage of Sales for Some Retailers
Ad DollarsAd DollarsLine of TradeLine of Trade As Percentage of SalesAs Percentage of SalesGrocery storesGrocery stores
Safeway IncSafeway Inc 1.41.4Winn-Dixie Stores IncWinn-Dixie Stores Inc 1.21.2
Variety storesVariety storesDollar GeneralDollar General 5.35.3Dollar Tree Stores IncDollar Tree Stores Inc 10.1 10.1Family Dollar StoresFamily Dollar Stores 0.40.4Kmart CorpKmart Corp 1.51.5Target CorpTarget Corp 2.32.3Wal-Mart StoresWal-Mart Stores 0.50.5
Advertising Expenditures as a Advertising Expenditures as a Percentage of Sales for Some RetailersPercentage of Sales for Some Retailers
Ad DollarsAd Dollars
Line of TradeLine of Trade As Percentage of SalesAs Percentage of Sales
Women’s clothing storesWomen’s clothing stores
Charming ShoppesCharming Shoppes 2.52.5
Dress Barn IncDress Barn Inc 1.31.3
Limited IncLimited Inc 7.67.6
Talbots IncTalbots Inc 6.26.2
Factors in Allocating Advertising Dollars
HIGH ADVERTISING ALLOCATION•High Gross Margin Percentage•High Advertising Elasticity of Demand•Dominant or Potentially Dominant Market Share in Department or Merchandise Line•Good Backup Resources (Space, Inventory, Accounts Receivable, People)•Willingness to Allocate Enough to Achieve “Critical Mass”
LOW ADVERTISING ALLOCATIONS
•Low Gross Margin Percentage•Low Advertising Elasticity of Demand•Low Market Share and Limited Potential for Being Dominant Market Share Department or Line•Poor Backup Resource (Space, Inventory, Accounts Receivable, People)•Unwillingness to Allocate Enough to Achieve “Critical Mass”
Exhibit 11.1
Possible Promotion Objectives in Retailing
Improve Long-Run Performance
Improve Short-Run Performance
Store Image and Positioning
Public Service
Attract New
Customers
Increase Patronage of
Existing Customers
From Existing Trade Area
Expand Trade Area
Advertising Objectives Used by
Retailers Make consumers in your trading area aware that you offer the lowest prices...
Wal-Mart’s “ Always Low Prices”
Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company All rights reserved.
Make customers aware of your large stock selection...
Nordstrom promising the shopper a free shirt if they are “out of stock” on the
basic sizes.
Advertising Objectives Used by
Retailers
Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company All rights reserved.
Increase traffic during slow sales periods...
Subway Sandwiches Shop’s “Two-for-One Tuesdays”
Advertising Objectives Used by
Retailers
Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company All rights reserved.
Move old merchandise at the end of of a selling season...
The “after-Christmas clearance sales”
that all retailers use.
Advertising Objectives Used by
Retailers
Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company All rights reserved.
Strengthen your store’s image or reputation...
Neiman-Marcus’s famous Christmas catalog that generates news stories around the world when the catalog
is mailed to customers.
Advertising Objectives Used by
Retailers
Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company All rights reserved.
Identify your store with the nationally advertised brands that it sells...
Dillard’s
featuring Tommy Hilfiger clothing in their ads
Advertising Objectives Used by
Retailers
Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company All rights reserved.
Reposition the image of your store in the minds of consumers...
“Softer side of Sears”
Advertising Objectives Used by
Retailers
Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company All rights reserved.
Cultivate new customers...
Any of the one-day discounts that a customer gets for opening a charge account with the retailer.
Advertising Objectives Used by
Retailers
Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company All rights reserved.
Make consumers think of you first when a need for your products occurs, especially if they are not commonly purchased...
1-800-FLOWERS or
“For a hole in your roof or a whole new roof - Frederick Roofing”
Advertising Objectives Used by
Retailers
Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company All rights reserved.
Retain your present customers...
7-Eleven’s
“Frequent Fill-Up” gasoline program
Advertising Objectives Used by
Retailers
Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company All rights reserved.
Biggest Retail AdvertisersBiggest Retail Advertisers
$0 $100 $200 $300 $400 $500 $600 $700
McDonald's
Sears, Roebuck & Co.
Federated
Home Depot
Kmart
Wal-Mart
Target
JC Penney
Best Buy
Circuit City
Wendy's
Lowe's
Dillard's
Ad Spending in 2001 (millions)Source: Advertising Age
Promotional Mix ElementsPromotional Mix Elements
Personal SellingPersonal Selling AdvertisingAdvertising PublicityPublicity
Publicity is often used to communicate Publicity is often used to communicate with audiences beyond the target market. with audiences beyond the target market.
Favorable publicity can build employee Favorable publicity can build employee morale and help improve employee morale and help improve employee performance. Just like customers, performance. Just like customers, employees place more credibility on employees place more credibility on information provided by news media information provided by news media than on information generated by the than on information generated by the retailer.retailer.
Publicity ToolsPublicity Tools
Press ReleasesPress Releases Press ConferencesPress Conferences Feature ArticlesFeature Articles By-Lined ArticlesBy-Lined Articles SpeechesSpeeches Movies and Video PlacementsMovies and Video Placements Letters to the EditorLetters to the Editor
Promotional Mix ElementsPromotional Mix Elements
Personal SellingPersonal Selling AdvertisingAdvertising PublicityPublicity Sales PromotionSales Promotion
Bank 1 One
Book Store 555-5555
Bank 1 One
Exhibit 11.4
Types of Sales Promotions
Sales Promotions
Sole Sponsored Joint Sponsored
Exhibit 11.4
Sole Sponsored
PremiumsContest and Sweepstakes
Frequent - Buyer
Programs
Types of Sales Promotions
Exhibit 11.4
Joint Sponsored
CouponsIn-Store Displays
Demonstrations and Sampling
Types of Sales Promotions
Coupons in retailer ads 90%
Cents-off 90%
In-store coupons 88%
Refunds 85%
Electronic, in-store displays 83%
Samples of established products 78%
Premiums 75%
Sweepstakes 70%
Value Redeemed
Greater than $50 84%
$25.00 - 49.99 51%
$15.00 - 24.99 18%
$ 5.00 - 14.99 10%
$ 2.00 - 4.99 6%
Less than $2.00 2%
Percentage of Rebates Redeemed by Dollar Value
CONSUMER ELECTRONICS 79%
ASSEMBLED FURNITURE 77%
WOMEN’S CLOTHING 74%
MEN’S CLOTHING 69%
BOY’S & GIRL’S CLOTHING 58%
INFANT’S & TODDLER’S CLOTHING 57%
Retailing, 3rd Edition, Dunne and Lusch Copyright © 1999 by Harcourt Brace & Company All rights reserved.