Retail Promotional Strategy
Retail promotion is simply the way that retailers communicate with their publics.
They exchange meanings with them through the messages they create and the media they use.
We tend to think of advertising first.  However the synergy of the promotional mix is critical to successful communications
Recent developments in Web-based communications.

Promotion and the Hierarchy of Effects

Objectives
To Explore Scope of Retail Promotion
To Study Elements of Retail Promotion
To Discuss Strategic Aspects of Retail Promotion

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Promotional Strategy Planning

Retail Promotional Mix
Advertising: mix of all media
New Media:
Banner Ads (match to customer, effective?)
Affiliate Marketing (links for commission)
Public Relations:  how we reach out to the community, release statements
Sales Promotion: pos, coupons, samples
Personal Selling:  in-store service

Consider the Medium, market coverage, suitability for your purposes, advantages, and disadvantages of each

E.g. Radio:  identifiable market segments, good for retailers of wide appeal, low costs, good coverage, no visual, needs regular usage
 

Advertising/Promotion:  Trends towards Cross Promotion

Retail Advertising
Geographically Concentrated Target Markets vs. Global Markets and adaptations
Stress Immediacy
Stress Pricing
Lower Rates
Cooperative Advertising
Which media does your target market use? How do they use it?
Which search engines do they use? Have you registered properly so that your site is identified in the search process?
Will you use the medium in the short or long term?

Types of advertising are related to their purposes
 

The Federated-May Merger
What kind of advertising strategy will be adopted?
Will conversions to Macy’s mean less advertising dollars?
Many of May's department stores eventually will be converted to the Macy's name as Federated accelerates its strategy of creating a nationwide brand that would give it pricing leverage with suppliers. The transaction also would bring together the operator of Bloomingdale's with May's Marshall Field's, Lord & Taylor and Hecht's chains.
Department stores have been losing sales in part because young people regard them as the places where their parents shopped, retail industry analyst Kurt Barnard said
 
 

Changes of names throughout the country
May has 132,000 employees in 46 states and annual sales of $14.4 billion. The company operates about 490 department stores under the names Famous-Barr, Filene's, Foley's, Hecht's, Kaufmann's, Lord & Taylor, L.S. Ayres, Marshall Field's, Meier & Frank, Robinsons-May, Strawbridge's and The Jones Store. The company also has 229 David's Bridal stores, 458 After Hours Formalwear stores, and 11 Priscilla of Boston stores
Lundgren said Federated doesn't plan to change May store names before 2006, but then will rename its stores — and even some Bloomingdale's stores — as Macy's. That means that May store names including Filene's, Foley's, Hecht's and Kaufmann's could disappear next year.
 

THE BLUELIGHT BATTLE PLAN
Why Kmart Is Charging Forward Into the Past
April 9, 2001 – Advertising Age
Kmart’s previous turnaround schemes fizzled.
The long-ailing discounter has been left in the dust by Wal-Mart Stores and Target Corp.
 

A Change in Promotional Strategy
Management is counting on the new efforts being so successful that Kmart won't feel the squeeze coming to its ad budget.
"We spent over $1 billion in advertising. We are going to optimize and reallocate to drive differentiation.
Management plans to trim ad spending by  cutting duplicate newspaper inserts on which Kmart spends some $500 million a year.
 

The Blue Light is Back Campaign
TBWA/Chiat/Day
The agency has developed a 15-second spot showing a jar with fireflies in a boy's room. The blue light shines on the jar and, to the tune of Peggy Leeís "Iím Beginning to See the Light," they escape.
 

The ad campaign must be integrated with the in-store promotions
The online element of the BlueLight campaign for the Bluelight.com Web site and online ads were created by TBWA/Chiat/Day's interactive department.
One shows a lighthouse with a blue beacon, accompanied by an audible foghorn. Another shows two wolves howling. There's one with flying saucers landing on Earth. Each ends with an audible "Attention Kmart shoppers."
A question is whether the interactive portion would somehow be integrated with messages that had been posted in stores that say "Goosebumps ahead" and "Any moment now."
A key element is selection of the name for the everyday products Kmart plans to offer at new low prices.
What will it be: BlueLight promises, rewards, extras, guarantees, everyday?
 

The promotional strategy is related to the goal of attracting specific consumer segments
According to management the store has to attract a younger customer, those who will continue to shop at Kmart as they grow older.
"We're missing a men's and young men's active casual brand, like a Bugle Boy that we passed on, like a Jones New York, like Claiborne for Men. There's a gap in our portfolio. We've got to go through our targets. We've got geriatrics covered well."
 

What’s Happened Since - Part III
Kmart is buying Sears, Roebuck & Co. for $11 billion in a deal that will marry two of the nation's oldest retailers that had trouble keeping up with the changes in American culture around them.
While the new company will operate both Sears and Kmart stores, "several hundred" Kmarts will be converted to Sears, Sears Chairman Alan Lacy said at a news conference. The companies currently operate about 3,500 stores combined
"Imagine going into Kmart and buying a Sears Craftsman tool set, or buying Kmart's Martha Stewart home products at Sears," said Marshal Cohen, chief retail analyst with market research firm NPD Group. "To Kmart shoppers, Lands' End may not mean anything, but now it will."
 

What do you think will happen?
"One [name] will probably fade out of existence," Barnard said, adding, "Don't be so sure that Sears is the one that survives. Kmart is a discount store name and perhaps more able to compete with Wal-Mart on that basis than Sears.”

 Which will it be?

If Some WalMarts become Sears stores, how would you promote the change?
 

Public Relations
Planned
Unexpected
Image Enhancing
Image Detracting

Demonstrations
Charity outreach
Events
Sponsorship
Celebrity Patrons

Publicity
What do the media report about you?
Can you influence it?
Reports of community services – e.g. Ronald McDonald House
Family docs sponsor sports teams
 

Types of Personal Selling
Order-taker
Order-getter
PMs  - prizes, money, promotional money
What do your employees communicate?
What do your customers need?
What do your customers expect?
Flexibility, information, persuasion, dealing with problems and objections
 

Sales Promotion Types
Point-of-Purchase
Contests and Sweepstakes
Coupons
Frequent-Shopper Programs
Prizes
Samples
Demonstrations
Referral Gifts
Specialty Items
Special Events
Toys r Us Web promo

When will contests help?
Will coupons be effective?
Will the sale meet their goals?
 

A Recent Acquisition:  CVS Acquires 1260 Eckerd Drug stores
A planned transition
New marketing and advertising campaign is designed to retain Eckerd’s customers and entice new ones
A major message is lower prices and great deals
Announced by having Sunday papers in these markets delivered in CVS-branded plastic bags
A $25 gift card for transferring their prescriptions to CVS
 

Determining Promotional Objectives
Word of Mouth – effectiveness
What about chat rooms, consumer rankings online?
Budget Issues
All-You-Can-Afford
Incremental
Competitive Parity
Percentage-of-Sales
Objective and Task: what are you trying to accomplish?

Media Decisions
Cost-per-Thousand (CPM)
Cost per message X 1000/Circulation
CPM Target Market
Issue:  clutter in e-commerce
Reach:
Number of people exposed to promo /time period
Frequency:
Avg no. times each person who is reached is exposed to promo in a specific period
Massed vs. Distributed Promotions
Message Content

Suppose you were hired to develop the new promotional campaign
First Union, the sixth-largest bank in the US, has agreed to buy rival Wachovia in what the North Carolina banks described on Monday as a merger of equals. The new bank will be the fourth largest in the US
The combined bank will be called Wachovia Corporation but be based in Charlotte, First Union's home town