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Retail Management: A Strategic

Approach
Thirteenth Edition

Chapter 19
Promotional
Strategy

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Learning Objectives
19.1 To explore the scope of retail promotion
19.2 To study the elements of retail promotion:
advertising

public relations

personal selling

sales promotion

19.3 To discuss the strategic aspects of retail promotion:


objectives, budgeting, the mix of forms, implementing
the mix, and reviewing and revising the plan

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Elements of the Promotional Mix
Advertising
Public Relations
Personal Selling
Sales Promotion

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Advertising
Paid, non personal communication transmitted through
out-of-store mass media by an identified sponsor
Key aspects
Paid form
Non-personal presentation
Out-of-store mass media
Identified sponsor

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Advertising Objectives for Retailers
Lift short-term sales
Increase customer traffic
Develop and/or reinforce a retail image
Inform customers about goods and services and/or
company attributes
Ease the job for sales personnel
Develop demand for private brands

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Advertising Characteristics
Advantages Disadvantages
Attracts a large audience Standardized messages lack
flexibility
Gains pass along readership
(for print) Some media require large
Low cost per contact investments

Many alternatives available Geographic flexibility limited


Some media require long lead time
Control over message content;
message can be standardized Some media have high throwaway
Message study possible rate

Editorial content surrounds ad Some media limit the ability to


provide detailed information
Self-service operations possible

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Table 19.2a Advertising Media
Comparison Chart
Medium Market Coverage Particular Suitability
Daily Papers Single community or entire metro area; All larger retailers
local editions may be available

Weekly Papers Typically a single community; may be a Retailers with a strictly local market
metro area

Shopper Papers Most households in one community; Neighborhood retailers and service
chain shoppers can cover a metro area businesses

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

Direct Mail Controlled by the retailer New and expanding firms, those
using coupons or special offers,
mail order

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Table 19.2b Advertising Media
Comparison Chart
Medium Market Coverage Particular Suitability
Radio Definable market area surrounding the Retailers focusing on identifiable
station segments
TV Definable market area surrounding the Retailers of goods and services
station with wide appeal
World Wide Web Broad, even global All types of goods and service-
oriented retailers
Transit Urban or metro community served by Retailers near transit routes,
transit system especially those appealing to
commuters
Outdoor Entire metro area or single Amusement and tourist-oriented
neighborhood retailers, well-known firms

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Table 19.2c Advertising Media
Comparison Chart
Medium Market Coverage Particular Suitability
Local Magazines Entire metro area or region; zoned Restaurants, entertainment-
editions sometimes available oriented firms, specialty shops,
mail-order firms
Flyers/ Circulars Single neighborhood Restaurants, dry cleaners, service
stations, and other neighborhood
firms
Social Media Broad, even global All types of goods and service-
oriented retailers
Mobile in-app Local and geo-targeted areas All types of goods and service-
advertising oriented retailers

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Figure 19.4 Types of Advertising

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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?

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Public Relations
Public Relations Communication that fosters a favorable
image for the retailer
Non personal or personal
Paid or nonpaid
Sponsor-controlled or not
Publicity Nonpersonal form of public relations whereby
messages are transmitted by mass media. The time or
space provided by the media is not paid for, and there is no
identified commercial sponsor

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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

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Public Relations Characteristics
Advantages Disadvantages
No costs for messages time Some retailers do not believe
or space in spending on image-related
communication
Mass audience addressed
Little control over publicity
Carryover effects possible
message
More credible source
More suitable for short run
Image can be presented or
Costs for PR staff, planning
enhanced
activities and events
People pay more attention
than to clearly identified ads

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Personal Selling
Oral communication with one or more prospective customers
for the purpose of making a sale

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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 information back 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

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Figure 19.5 Tips for Retail Sales
Personnel
Have the right state of mind and exhibit extreme politeness.
Be knowledgeable about product features, alternative suggestions, prices, company policies,
and so on.
Understand your ability to utilize employee empowermentand be helpful whenever you can.
Always greet the customer and make him or her feel comfortable in communicating with you.
Ask the customer what he or she is looking to purchase and LISTEN to the answer.
Tailor your sales approach to the individual customer and his or her needs.
When appropriate, try to cross-sell related items.
Do not be pushy.
Be honest and ethical in all customer interactions.
Never argue with the customer or lose your temper.
If you interact with more than one customer at a time, make sure all customers see that you
are fair with your attention to each one.
Wrap merchandise carefully.
Maintain the appearance of the department; clean up when necessary.
Be pleasant when customers return products and make the experience as hassle-free as
possible.
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Personal Selling Characteristics
Advantages Disadvantages
Message can be adapted High costs
Many ways to meet Doesnt get customer in
customer needs store
High attention span Self-service discouraged
Less waste Limited number of
customers at one time
Better response
Immediate feedback Negative attitudes toward
salespeople

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Types of Sales Positions
Order-taker
Order-getter

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Figure 19.7 Typical Personal Selling
Functions Sales Promotion

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Sales Promotion
Encompasses the paid communication activities other than
advertising, public relations, and personal selling that
stimulate consumer purchases and dealer effectiveness

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Types of Sales Promotions
Displays Prizes

Contests Samples

Sweepstakes Demonstrations

Coupons Referral gifts

Frequent shopper Other limited-time selling


programs efforts

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Sales Promotions Objectives for
Retailers
Increasing short-term sales volume
Maintaining customer loyalty
Emphasizing novelty
Complementing other promotion tools

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Sales Promotion Characteristics
Advantages Disadvantages
Eye-catching appeal Difficult to terminate
Distinctive themes
Possible damage to retailers
Added customer value image
Draws customer traffic More stress on frivolous
Maintains loyalty selling points
Increases impulse Short-term effects only
purchases
Used as a supplement
Fun for customers

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Figure 19.8 Why Retail Sales Are Lost

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Figure 19.9 Types of Sales Promotions

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Advantages of Coupons
Manufacturers may pay to advertise and redeem them
Over 80% 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

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Figure 19.12 Planning a Retail
Promotional Strategy

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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 on positive comments
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Procedures for Setting a Promotional
Budget
All-you-can-afford method
Incremental method
Competitive parity method
Percentage-of-sales method
Objective-and-task method

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Figure 19.14 Selecting Promotion
Mix and The Hierarchy of Effects

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Implementation Decisions
Media
Timing
Content
Makeup of Sales Force
Sales Promotion Tools
Responsibility for Coordination

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