12 06 2013 CH 15 RETAIL COMMUNICATION MIX Brands distinguishing name or symbol logo that identifies the product services offered by a seller differentiates those products services from competitors brand equity value that a brand image offers retailers o attracts customers builds loyalty high prices leading to higher gross margin reduced promo expenses value to customers promises consistent quality simplifies buying process reduces time and effort searching for information about merch retailer brand awareness potential customer s ability to recognize or recall the brand name is a particular type of retailer or product service benefits of a high BA aided recall top mind awareness stimulates visits to retailers top of mind awareness the highest level of awareness which occurs when consumers mention a specific brand name first when they are asked about the type of retailer a merchandise category or a type of service o i e best buy comes to mind when consumers are asked about a retailer that sells electronics when consumers indicate they know the brand when the name is Aided recall presented brand association anything linked to or connected with the brand name in a consumer s memory i e associating apple with its innovative products such as the iphone or its innovative stores Brand image consists of a set of associations that are usually organized around some meaningful themes i e LL bean associated with costumer service INTEGRATED MARKETING COMMUNICATION PROGRAM integrates all communication elements to deliver a comprehensive consistent message providing consistent image can be challenging for multichannel retailers need to consider the needs of all channels early in the planning of its communication program Present a Consistent Brand Image through all Communications with Customers o Store designs o Advertising o Web site o Magalog brand extension benefits little communication expenses needed to create awareness and a brand image for a new concept i e gap gap kids old navy methods of communicating with customers o direct marketing o direct mail e mail o mobile marketing muting through wireless handheld devices and m obile commerce involves completing a transaction via the cell phone Online marketing o websites blogs social media social media media content distributed through social interactions 3 major Facebook 1 youtube and twitter o o sales promotion special incentives or excitement building programs that encourage consumers to purchase a particular product or service typically used in conjunction with other advertising or personal selling programs personal selling a communication process in which sales associates help customers satisfy their needs through face to face exchanges of info cost is high compared to other forms of promo but best and most efficient to sell certain products advertising placement of announcements persuasive messages purchased by retailers organizations that seek to inform and or persuade members of a particular target market about their products services organization or ideas o Automobiles 1 retailers 2 with 20billion annually public relations managing communications and relationships to achieve various objectives o building and maintaining a positive image of the retailer o handling or heading off unfave stories events o maintaining pos relationships with media i e walmart hired first PR company after much bad criticism eventually even donated and supplies after the earthquake in Haiti Planning the retail Communication Program ESTABLISH OBJECTIVES Specific goals related to the retail comm Mix s effect on the customer s decision making process long term creating or altering a retailer s brand image short term increasing store traffic determine the communication budget second step in developing a comm program MAM OTM Estimates communication activities effects on the firm s future sales or comm Objectives Marginal Analysis Method MAM economic principle that firms should increase communication expenditures as long as each add dollar spent is generating more than a dollar o Very hard to use cause managers don t know relationship btwn communication expenses and sales objective task method OTM determines the budget required to undertake specific tasks to accomplish communication objectives rule of thumb methods uses opposite logic as above uses past sales and communication activities to determine the present communication budget o affordable budget method sets communication budget by determining what money is avail after operating costs and profits are budgeted drawback assumes that the comm Expenses don t stimulate sales and profits o Percentage of sales method communication budget is set as a fixed percentage of forecasted sales drawback assumes same percentage used in the past or by competitors is still appropriate for the retailer o competitive parity method comm Budget is set so that the retailer s share of communication expenses equals its share of the market drawback like the others does not allow the retailer to exploit the unique opportunities or problems they confront in a market allocate the promotional budget specific comm Elements merch categories geographic regions or long short term objs retailer decides how much of its budget to allocate to Budget allocation decision is more important budget amount decision o High assay principle the retailer allocate the budget to areas that will yield the greatest return Sales promotion opportunity many SPO undertaken by retailers are initiated by vendors To evaluate a trade promo retailer considers o Realized margin from the promotion cost of the additional inventory carried potential increase in sales potential loss additional sales objective and task method a method of setting a promo budget in which the retailer first establishes a set of comm Objectives and then determines the necessary tasks and their costs CH 16 Managing the store Strategic importance of store management Opportunity to build strategic advantage o Diff to have unique compelling merch o Customer loyalty often based on cutomer service Difficulty of store managers job o Managing diverse set of unskilled people o Increasing empowerment and responsibility to tailor merch and presentation to local community Store manager s responsibilities Varies by type of retailer o Specialty vs department Entrepeneur Responsible for two critical assets o People sales employees o Real estate sales square foot Orientation and training employees Orientation