Retail Promotion

• Retail promotion involves communication by a retailer to inform, persuade, and remind the target market about various aspects of the firm.

Elements of the Promotional Mix

• The promotional mix consists of the following elements:
  • Advertising: Paid, nonpersonal communication through mass media.
  • Public Relations: Communication that fosters a favorable image.
  • Personal Selling: Interaction between sales associates and customers.
  • Sales Promotion: Short-term incentives to stimulate purchases.
  • Digital Marketing: Engaging customers through digital platforms.

Advertising

Definition

• Advertising is a paid, nonpersonal communication by an identified sponsor, transmitted through various mass media.
  • Key Aspects: Must be paid, nonpersonal, through out-of-store media (e.g., newspapers, TV), and identified sponsor clearly stated.

Objectives

• Common advertising objectives for retailers include:
  • Increasing short-term sales.
  • Increasing customer traffic.
  • Developing or reinforcing the retail image.
  • Informing customers about products or services.
  • Easing the sales jobs.
  • Creating demand for private labels.

Advantages

• Attracts a large audience and is cost-effective.
• Editorial content may enhance credibility.
• Provides flexibility in choosing media based on target demographics (e.g., Baby Boomers prefer TV; Gen Z prefers social media).

Disadvantages

• Standardized messages may lack flexibility and focus on individual customer needs.
• Some advertising methods may require significant investment, making them unsuitable for smaller businesses.
• High throwaway rate and limited geographical flexibility.

Advertising Mediums

• Legacy Media: Newspapers, magazines, radio, TV, and outdoor media like billboards.
• Digital Media: Pay-per-click ads, social media promotions, influencer marketing, and native ads.

Types of Advertising

By Content

• Pioneer Ads: Awareness-focused for new products.
• Competitive Ads: Persuasive ads aiming to differentiate offerings.
• Reminder Ads: To reach loyal customers and reinforce brand attributes.
• Institutional Ads: To maintain retailer visibility without pushing sales directly.

By Payment Method

• Paid Advertisement: Total control over content.
• Cooperative Advertising: Shared cost and decision-making between retailers and manufacturers.

Public Relations

Definition

• Public relations includes any communication that enhances a retailer's image, either through personal or nonpersonal channels, and paid or unpaid methods.

Publicity vs. Advertising

• Publicity: Nonpaid, less controllable, often more credible; complements advertising efforts.
• Advertising: Paid, contains more control over message and placement.

Objectives

• Increasing awareness, improving company image, showing community contributions, demonstrating innovation, and minimizing promotional costs.

Advantages and Disadvantages

• Advantages: Credible source, no space costs, and potential carryover effects.
• Disadvantages: Less control, usually limited to short-term effects, and potential for negative media coverage.

Personal Selling

Definition

• Oral communication with prospective customers with a goal to make sales. It varies based on retailer image and customer relationship focus.

Objectives

• To persuade customers, stimulate impulse purchases, provide customer service, and generate feedback.

Advantages and Disadvantages

• Advantages: Customized messaging, immediate feedback, and higher attention return regarding purchases.
• Disadvantages: High costs, limited reach, dependency on individual salesperson effectiveness.

Sales Promotion

Definition 1

• Sales promotions involve paid communication activities to stimulate consumer purchases, which may include discounts, value offerings, and contests.

Types

• Point-of-purchase displays, contests, coupons, frequent shopper programs, and referral gifts.

Objectives and Advantages

• Objectives include increasing short-term sales and customer loyalty.
• Advantages: Eye-catching, can drive customer traffic, and enhance impulse buying.

Disadvantages

• Potential damage to retailer image, difficult termination of loyalty programs, and typically limited to short-term impacts.

Digital Marketing

Definition

• Digital marketing encompasses all marketing activities that utilize electronic devices or the internet to engage with customers.

Types

• SEO: Enhancing website visibility in search engines.
• Content Marketing: Promoting content to generate awareness and leads.
• Social Media Marketing: Utilization of social platforms.
• Email Marketing: Engaging customers directly via email.

Planning a Retail Promotional Strategy

Steps

1. Determining promotional objectives.
2. Establishing promotional budget.
3. Selecting promotional mix.
4. Implementing the promotional mix.
5. Reviewing and revising promotional plans.

Promotional Objectives

• Includes increasing sales, enhancing brand loyalty, informing customers, and generating positive word-of-mouth (WOM).

Promotional Budget Setting Procedures

1. All-you-can-afford: Least effective, prioritizing other elements first.
2. Incremental: Adapting previous budgets with adjustments for trends.
3. Competitive Parity: Aligning to the competition.
4. Percentage-of-sales: Relating budget to sales figures.
5. Objective-and-task Method: Establishing clear goals and assigning budgets accordingly — considered the best method.

Selecting the Promotional Mix

• The combination of promotional elements (advertising, PR, personal selling, sales promotions) must correspond with the retailer type and consumer journey.

Implementation and Metrics

Implementation Decisions

• Involve determining media, costs, timing, and sales force.

Metrics

• Reach: Number of distinct individuals exposed to promotions.
• Frequency: Number of times individuals are exposed to promotions.