CHAPTER

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Retail
Communication
Mix
CHAPTER 16

Retailing Management 8e

The McGraw-Hill Companies, All rights reserved.

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COMMUNICATION MIX

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refers to specific methods

used to promote the company
or its products to targeted
customers.

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BRANDS

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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

The McGraw-Hill Companies, Inc./John Flournoy, photographer

The McGraw-Hill Companies, Inc./Bob Coyle, photographer

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VALUE OF BRAND IMAGE

Value to Retailers
(Brand Equity)
Attract Customers
Build Loyalty
Higher Prices Leading to
Higher Gross Margin
Reduced Promotional Expenses
Facilitates Entry into New Markets

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Value to Customers
Promises Consistent Quality
Simplifies Buying Process
Reduces Time and Effort
Searching for Information
About Merchandise/Retailer

Gap GapKids

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BUILDING BRAND EQUITY

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BRAND EQUITY

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Brand equity is a phrase used in the

marketing industry which describes the
value of having a well-known brand
name

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Benefits of High Brand

Awareness

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BRAND AWARENESS

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Brand awareness is the extent to which

a brand is recognized by potential customers,
and is correctly associated with a particular
product

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AIDED AWARENCESS

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Aided Awareness This type of

awareness is generated in a consumer.
When asked about a product category, if the
consumer is aided with a list of company
names and he recognizes the company from
the given set it is categorized as aided
awareness.

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TOP MIND AWARENESS

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Top of the mind Awareness When the

name of the company is automatically
recollected because the consumer very
promptly associates the brand with the
product category, it is called a top of the
mind awareness of the product. Its the first
brand name listed by the consumers when
asked to name brands they know without any
cues.
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Creating Brand Awareness

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Memorable
Name

Best Buy

Repeated
Exposure

Home Depot

Top-of-mind
Brand Awareness

Starbucks

Symbols

Macys

Event
Sponsorship
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Consistent Reinforcement through

Integrated Marketing Communication
Program

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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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Integrated Marketing
Communications

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Present a Consistent Brand Image through all

Communications with Customers
Store
Design
Advertising
Web Site
Magalog
The McGraw-Hill Companies, Inc./Andrew Resek, photographer

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Brand Extensions

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Gap GapKids and Old Navy

Abercrombie & Fitch Hollister and Gilly
Hicks
Sears Sears Auto Centers and the Great
Indoors
Pottery Barn Pottery Barn Kids

The McGraw-Hill Companies, Inc./Andrew Resek, photographer

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CHAPTER
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METHODS OF
COMMUNICATING WITH
CUSTOMERS
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Direct Marketing

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Direct Marketing

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Mobile marketing
is marketing
through wireless
handheld devices,
such as cellular
telephones, and mcommerce or
mobile commerce
involves completing
a transaction via
the cell phone.
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Online Marketing

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Social Media

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Public Relations (PR)

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Managing communications and relationships to

achieve various objectives
Building and maintaining a positive image of the
retailer
Handling or heading off unfavorable stories or
events
Maintaining positive relationships with the media
In many cases, public relations activities support
other promotional efforts by generating free
media attention and general goodwill.
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Planning the
Retail Communication Program

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Establish Objectives

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Communication objectives:
Specific goals related to the retail
communication mixs effect on the
customers decision-making process
Long-term: ex. creating or altering a
retailers brand image
Short-term: ex. increasing store traffic

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Determine the Communication

Budget

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Marginal Analysis Method

Based on the economic principle that firms
should increase communication
expenditures as long as each additional
dollar spent generates more than a dollar of
additional contribution
Very hard to use because managers dont
know the relationship between
communication expenses and sales
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Objective-and-Task Method

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Determines the budget required to

undertake specific tasks to accomplish
communication objectives

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Rule of Thumb Methods

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Affordable 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.

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Rule of Thumb Methods

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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.

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Rule of Thumb Methods

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Competitive 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.
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Allocate the Promotional

Budget

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The retailer decides how much of its budget to

allocate to specific communication elements,
merchandise categories, geographic regions,
or long- and short-term objectives
Budget allocation decision is more important
budget amount decision

High-assay principle: The retailer allocate the

budget to areas that will yield the greatest
return
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