Retail Communications
Retail Communications
Retail Communications
Merchandise Management
Retail Pricing
Chapter 15
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Questions
What can retailers build brand equity for their stores and their private-label merchandise? How are retailers using new approaches to communicate with their customers? What are the strengths and weaknesses of the different methods for communicating with 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? How can retailers use the different elements in a communication mix to alter customers decision-making processes?
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Brands
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
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Value to Customers
Promises Consistent Quality Simplifies Buying Process Reduces Time and Effort Searching for Information About Merchandise/Retailer
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Brand Equity
Consistent Reinforcement
Tar-Zhay
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Apple
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Aided Recall
Top Mind Awareness
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Repeated Exposure
Home Depot
Starbucks
Symbols
Macys
Event Sponsorship
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Merchandise Category Office Depot office supplies Price/quality Neiman Marcus , high fashion merchandise Specific attribute or benefit 7-Eleven convenience Lifestyle or activity Electronic Boutique computer games
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Fast Food
McDonalds
French Fries Clean
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Ronald McDonald
L.L. Bean
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L.L. Bean
Expertise
Outdoors
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Honest
Wal-Mart Associations
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Target Associations
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Consistent Reinforcement
The retailers brand image is developed and maintained through the retailers communication mix
Retail Communication Mix
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Consistent Reinforcement through Integrated Marketing Communication Program Integrated Marketing Communication Program A program that integrates all of the communication elements to deliver a comprehensive, consistent message Providing a consistent image can be challenging for multichannel retailers Need to consider the needs of all channels early in the planning of its communication program
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Magalog
The McGraw-Hill Companies, Inc./Andrew Resek, photographer
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Brand Extensions
Gap GapKids and Old Navy Talbots Talbuts Mens Sears Sears Auto Centers and the Great Indoors Pottery Barn Pottery Barn Kids
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Pluses Develop Awareness and Image Quickly Less Costs Needed to Promote Extension
Communication Methods
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Store Atmosphere
The combination of the stores physical characteristics (architecture, layout, signs and displays, colors, lighting, temperature, sounds, smells) together create an image in the customers mind
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Mediacart
A shopping cart that delivers point-of-decision advertising Informs the customer about special deals as the customer passes them in the aisle Each video screen is embedded with an RFID chip that interacts with chips installed on store shelves Records shopping habits, dwell times, how shoppers travel through the store
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Community Building
Retailers Community Building Websites offer opportunities for customers with similar interests to learn about products and services that support their hobbies and share information with others
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Personal selling salespeople satisfy needs through face to face exchange of information
Email retailers inform customers of new merchandise, receipt of order or when order has been shipped Direct Mail M-Commerce (mobile commerce)
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PR
The Gap, Emporio Armani, and Apple are among several retailers selling red products, a portion of the proceeds go to Product RED, a charity to wipe out AIDS in Africa
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Social Shopping
A communication strategy in which consumers use Internet to engage in the shopping process by exchanging preferences, thoughts, and opinions Product/service reviews
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Social Shopping
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Setting Objectives
Communication objectives:
Specific goals related to the retail communication mixs effect on the customers decision-making process Long-term: ex) creating or altering a retailers brand image Short-term: ex) increasing store traffic
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Long-term objectives
Product focused
Short-term objectives
Category focused
National
Specific product
Local
Assortment of
merchandise
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Based on the economic principle that firms should increase communication expenditures as long as each additional dollar spent generates more than a dollar of additional contribution Very hard to use because managers dont know the relationship between communication expenses and sales
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Objective-and-Task Method
Determines the budget required to undertake specific tasks to accomplish communication objectives
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Affordable Budgeting Method sets communication budget by determining what money is available after operating costs and profits are budgeted. Drawback: The affordable method assumes that the communication expenses dont stimulate sales and profits.
Percentage of Sales Method communication budget is set as a fixed percentage of forecasted sales.
Drawback: This method assumes the same percentage used in the past, or by competitors, is still appropriate for the retailer.
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Competitive Parity Method this communication budget is set so that the retailers share of communication expenses equals its share of the market. Drawback: This method (like the others) does not allow the retailer to exploit the unique opportunities or problems they confront in a market.
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High-assay principle: The retailer allocate the budget to areas that will yield the greatest return
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