Slide 1
16-1QuestionsWhat 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?1 16-2Objectives of Communication
ProgramShort-termIncrease TrafficIncrease SalesLong-termBuild Brand
(retailers name) ImageCreate Customer Loyalty
2 16-3Brands 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
competitorsThe McGraw-Hill Companies, Inc./Bob Coyle,
photographer
The McGraw-Hill Companies, Inc./John Flournoy, photographer
3 16-4Value of Brand ImageValue to Retailers (Brand
Equity)Attract CustomersBuild LoyaltyHigher Prices Leading toHigher
Gross MarginReduced Promotional ExpensesFacilitates Entry into New
MarketsGap GapKidsValue to CustomersPromises Consistent
QualitySimplifies Buying ProcessReduces Time and Effort Searching
for Information About Merchandise/RetailerBrands4 16-5Building
Brand EquityBrand EquityCreate a High Level of Brand
AwarenessCreate Emotional ConnectionsConsistent Reinforcement
DevelopFavorableAssociations5 16-6
The McGraw-Hill Companies, Inc./Lars Niki, photographer
Tar-Zhay6 16-7
7 16-8Apple
8 16-9Benefits of High Brand AwarenessAided RecallTop Mind
AwarenessStimulates Visits to Retailer9 16-10Creating Brand
AwarenessTop-of-mindBrand Awareness Memorable NameRepeated
ExposureSymbolsEvent SponsorshipBest BuyHome DepotStarbucksMacys10
16-11Retailers Develop Associations with their Brand
NameMerchandise 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 gamesBrand
associations: anything linked to or connected with the brand name
in a consumers memoryBrand name is a set of associations that are
usually organized around some meaningful themes11 16-12McDonalds
Brand AssociationsMcDonaldsBig MacGolden ArchesFast FoodFrench
FriesCleanRonald McDonald12 16-13L.L. Bean
13 16-14L.L. Beans Brand AssociationsL.L. BeanFriendlyNew
EnglandPracticalExpertiseOutdoorsHonest14 16-15Wal-Mart
Associations
15 16-16Target Associations
16 16-17Consistent ReinforcementThe retailers brand image is
developed and maintained through the retailers communication
mix
Retail Communication Mix17 16-18Consistent Reinforcement through
Integrated Marketing Communication ProgramIntegrated Marketing
Communication ProgramA program that integrates all of the
communication elements to deliver a comprehensive, consistent
messageProviding 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
18 16-19 Integrated Marketing CommunicationsPresent a Consistent
Brand Image through all Communications with Customers Store
DesignAdvertisingWeb SiteMagalog
The McGraw-Hill Companies, Inc./Andrew Resek, photographer
19 16-20Brand ExtensionsGap GapKids and Old NavyTalbots Talbuts
MensSears Sears Auto Centers and the Great IndoorsPottery Barn
Pottery Barn Kids
The McGraw-Hill Companies, Inc./Andrew Resek, photographer
20 16-21Extending Brand Name to a New ConceptPlusesDevelop
Awareness and Image QuicklyLess Costs Needed to Promote
ExtensionMinusesAssociations Might Not Be Compatible with
ExtensionLimited Victorias Secret Abercrombie & Fitch
Hollister21 16-22Communication Methods
22 16-23Paid Impersonal CommunicationsAdvertisingSales
promotions Special events, In-store demonstrationsGames,
sweepstakes and contestsCouponsStore atmosphereWebsiteCommunity
building
Jack Star/PhotoLink/Getty Images
Boxes of KrustyOs cereal at a New York 7-Eleven stores,
temporarily converted into a Kwik-E Mart, to promote the Simpson
Movie.23 16-24Store AtmosphereThe combination of the stores
physical characteristics (architecture, layout, signs and displays,
colors, lighting, temperature, sounds, smells) together create an
image in the customers mind
24 16-25MediacartA shopping cart that delivers point-of-decision
advertisingInforms the customer about special deals as the customer
passes them in the aisleEach video screen is embedded with an RFID
chip that interacts with chips installed on store shelvesRecords
shopping habits, dwell times, how shoppers travel through the
store
25 16-26Community Building
Retailers Community Building Websitesoffer opportunities for
customers with similar interests to learn about products and
services that support their hobbies and share information with
others26 16-27Paid Personal CommunicationRetail salespeople are
primary vehicle for providing paid personal communication to
customers.Personal selling salespeople satisfy needs through face
to face exchange of informationEmail retailers inform customers of
new merchandise, receipt of order or when order has been
shippedDirect MailM-Commerce (mobile commerce)
27 16-28Unpaid Impersonal CommunicationPublicity is
communication through significant unpaid presentations about the
retailer, usually a news story, in impersonal media.
Newspaper TV coverage Macys Thanksgiving Day Parade
28 16-29PR
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 Africa29 16-30Unpaid Personal
CommunicationWord-of-mouth Can be favorable Can be detrimental
Social ShoppingA communication strategy in which consumers use
Internet to engage in the shopping process by exchanging
preferences, thoughts, and opinionsProduct/service reviews
30 16-31Social Shopping
31 16-32Comparison of Communication Methods
32 16-33Steps in Developing a Retail Communication Program
Planning the Retail Communication Program
33 16-34Setting ObjectivesCommunication objectives:Specific
goals related to the retail communication mixs effect on the
customers decision-making processLong-term: ex) creating or
altering a retailers brand imageShort-term: ex) increasing store
traffic34 16-35Communication Objectives & Stages in the
Consumers Decision-Making Process
35 16-36Retail and Vendor Communication ProgramsVendor Long-term
objectives Product focused National Specific productRetailer
Short-term objectives Category focused Local Assortment of
merchandise36 16-37Setting the Communication Budget Marginal
analysis Objective and task Rules of thumb Affordable Percent of
sales Competitive parityAdvertisingSales
Sales Advertising37 16-38Setting the Communication
BudgetMarginal Analysis MethodBased on the economic principle that
firms should increase communication expenditures as long as each
additional dollar spent generates more than a dollar of additional
contributionVery hard to use because managers dont know the
relationship between communication expenses and sales
38 16-39Marginal Analysis for Setting Communication Budget
39 16-40Objective-and-Task MethodDetermines the budget required
to undertake specific tasks to accomplish communication
objectives
40 16-41Illustration of Objective and Task Method for Setting a
Communication Budget
41 16-42Financial Implications of Increasing the Communication
Budget
42 16-43Rule of Thumb MethodsAffordable 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.43
16-44Rule of Thumb MethodsCompetitive 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.44 16-45Allocation of the Promotional
BudgetThe retailer decides how much of its budget to allocate to
specific communication elements, merchandise categories, geographic
regions, or long- and short-term objectivesBudget allocation
decision is more important budget amount decision
High-assay principle: The retailer allocate the budget to areas
that will yield the greatest return 45