PROMOTIONAL STRATEGY

Objectives

•To explore the scope of retail promotion

•To study the elements of retail promotion: advertising, public relations, personal selling, and sales promotion

•To discuss the strategic aspects of retail promotion: objectives, budgeting, the mix of forms, implementing the mix, and reviewing and revising the plan

Elements of the Promotional Mix

•Advertising

—- Paid, nonpersonal 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

Advantages

üAttracts a large audience

üGains pass along readership (for print)

üLow cost per contact

üMany alternatives available

üControl over message content; message can be standardized

üMessage study possible

üEditorial content surrounds ad

üSelf-service operations possible

Disadvantages

ÒStandardized messages lack flexibility

ÒSome media require large investments

ÒGeographic flexibility limited

ÒSome media require long lead time

ÒSome media have high throwaway rate

ÒSome media limit the ability to provide detailed information

Types of Advertising

•Public Relations

Communication that fosters a favorable image for the retailer

•Nonpersonal 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

Advantages

üImage can be presented or enhanced

üMore credible source

üNo costs for message’s time or space

üMass audience addressed

üCarryover effects possible

üPeople pay more attention than to clearly identified ads

Disadvantages

ÒSome retailers do not believe in spending on image-related communication

ÒLittle control over publicity message

ÒMore suitable for short run

ÒCosts for PR staff, planning activities and events

•Personal Selling

- Oral communication with one or more prospective customers for the purpose of making a

sale

•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

Advantages

üMessage can be adapted

üMany ways to meet customer needs

üHigh attention span

üLess waste

üBetter response

üImmediate feedback

Disadvantages

ÒLimited number of customers at one time

ÒHigh costs

ÒDoesn’t get customer in store

ÒSelf-service discouraged

ÒNegative attitudes toward salespeople

Typical Personal Selling Functions

•Sales Promotion

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

Types of Sales Promotions

•Displays

•Contests

•Sweepstakes

•Coupons

•Frequent shopper programs

•Prizes

•Samples

•Demonstrations

•Referral gifts

 Advantages

üEye-catching appeal

üDistinctive themes

üAdded customer value

üDraws customer traffic

üMaintains loyalty

üIncreases impulse purchases

üFun for customers

Disadvantages

ÒDifficult to terminate

ÒPossible damage to retailer’s image

ÒMore stress on frivolous selling points

ÒShort-term effects only

ÒUsed as a supplement