Retail Communication Mix Basics

1. FMS Semester 2
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2.  A communication program that is designed to achieve a
variety of objectives for the retailer, such as building a brand
image of the retailer in the customer's mind, increasing sales
and store traffic, providing information about the retailer's
location and offering, and announcing special activities.
 In store
 VM
 Store Design
 Employees
 Outside the store
 Advertising
 Direct Marketing
 Social Media
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3.  Retailers communicate with customers through :
 advertising,
 sales promotions,
 store atmosphere,
 Web sites,
 salespeople,
 e-mail,
 direct mail,
 m-commerce,
 community building,
 publicity,
 and word of mouth.
 These elements in the communication mix must be coordinated so customers
have a clear, distinct image of the retailer and are not confused by conflicting
information.
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4.  Can retailers build brand equity for their stores and their private-label
merchandise?
 Why do retailers/brands need to have an integrated marketing
communication program?
 What steps are involved in developing a communication program?
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5. Long-term Short-term
Build Brand (retailer’s name) Image Increase Traffic
Create Customer Loyalty Increase Sales
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6. 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
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7. Value to Retailers (Brand Equity) Value to Customers
 Attract Customers ■ Promises Consistent
 Build Loyalty Quality
 Higher Prices Leading to ■ Simplifies Buying Process
Higher Gross Margin
■ Reduces Time and Effort
 Reduced Promotional Expenses
Searching for Information
 Facilitates Entry into New Markets
About Merchandise/Retailer
Allen Solly  Allen Solly kids
 Park avenue  Park avenue Ladies
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11. Aided Recall Stimulates
Visits to
Top Mind Awareness Retailer
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12. The retailer’s brand image is developed and maintained
through the retailer’s communication mix
Retail Communication Mix
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13. 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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14. Present a Consistent Brand Image through all Communications with
Customers
•Store Design
•Advertising
•Web Site
•FB
The McGraw-Hill Companies, Inc./Andrew Resek, photographer
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15. Pluses Minuses
 Develop Awareness and ■ Associations Might Not
Image Quickly Be Compatible with
 Less Costs Needed to Extension
Promote Extension
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17. Communication Methods
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18.  Advertising
 Sales promotions – Special events, In-store demonstrations
 Games, sweepstakes and contests
 Coupons
 Store atmosphere Boxes of KrustyO’s cereal at a New York 7-
 Website Eleven stores, temporarily converted into a
 Community building Kwik-E Mart, to promote the Simpson Movie.
Jack Star/PhotoLink/Getty Images
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19. The combination of the store’s
physical characteristics
(architecture, layout, signs
and displays, colors, lighting,
temperature, sounds, smells)
together create an image in
the customers’ mind
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20.  VM
 In store Communication
 Verbal
 Non Verbal
 Store Design
 Store staff
 Merchandise Tag
 Windows
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22.  Retail salespeople are primary vehicle for providing
paid personal communication to customers.
 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)
 Social Media
 E Commerce
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23. Publicity is communication through significant
unpaid presentations about the retailer, usually a
news story, in impersonal media.
• Newspaper
• TV coverage
• Macy’s Thanksgiving Day Parade
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24. 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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25.  Word-of-mouth
Can be favorable
Can be detrimental
 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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27. Comparison of
Communication Methods
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28. Planning the Retail Communication Program
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29.  Communication objectives:
 Specific goals related to the retail communication
mix’s effect on the customer’s decision-making
process
 Long-term: ex) creating or altering a retailer’s
brand image
 Short-term: ex) increasing store traffic
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30. Retail and Vendor
Communication Programs
Vendor Retailer
• Long-term objectives • Short-term objectives
• Product focused • Category focused
• National • Local
• Specific product • Assortment of
merchandise
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31. Setting the Communication Budget
• Marginal analysis Advertising Sales
• Objective and task
• Rules of thumb Sales Advertising
- Affordable
- Percent of sales
- Competitive parity
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32. Setting the Communication Budget
 Marginal Analysis Method
 Based on the economic principle that firms should
increase communication expenditures as long as
each additional rupee spent generates more than
a rupee of additional contribution
 Very hard to use because managers don’t know
the relationship between communication
expenses and sales
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33.  Determines the budget required to undertake
specific tasks to accomplish communication
objectives
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34. Illustration of Objective and Task
Method for Setting a Communication Budget
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35. Affordable Budgeting Method – Percentage of Sales Method –
sets communication budget by communication budget is set as a fixed
determining what money is percentage of forecasted sales.
available after operating costs
and profits are budgeted.
Drawback: The affordable Drawback: This method assumes the
method assumes that the same percentage used in the past, or by
communication expenses don’t competitors, is still appropriate for the
stimulate sales and profits. retailer.
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36. Competitive Parity Method – this communication budget is set so that the
retailer’s 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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37.  Brand
 Vertical
 Sector
 Sales Channel
 Communication mix ?
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