MODULE 4

RETAIL PROMOTION

RETAIL PROMOTION
Retail promotion involves a mix of communication activities carried out by retailers in order
to make a positive influence on the customer's perception, attitude and behaviour which can
lead to an increase instore loyalty, store visits and product purchases. It is any type of
communication by a retailer that informs, persuades, and/or reminds the target market about
any aspect of that firm.
Retail promotion is broadly defined as any communication by a retailer that informs,
persuades, or reminds the target market about any aspect of that firm. Advertising, public
relation, personalselling and sales promotion are the 4 elements of promotion.
Role or function of Retail promotion program

1. Informing – this is the primary function of retail promotion program. Retailers

provide information to the customer about themselves and the product and services
they offered.
2. Persuading – It involves asking the people to visit the store and purchase the
merchandise
3. Reminding – it involves remainding its customers about its products and its benefit so
that customers may purchase the products again and develops customer loyalty
towards the store.

Promotional Objectives

➢ Increase sales

➢ Stimulate impulse and reminder buying

➢ Raise customer traffic

➢ Get leads for sales personnel

➢ Present and reinforce the retailer image

➢ Inform customers about goods and services

➢ Popularize new stores and Web sites

➢ Capitalize on manufacturer support

➢ Enhance customer relations

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 ➢ Maintain customer loyalty

➢ Have consumers pass along positive information to friends and others.

RETAIL PROMOTION MIX

Retailers usually employ a combination of advertising, sales promotion, personal selling and
publicity to achieve their promotional activities. These elements contribute to the retail
promotion mix. The best result can be seen with the integration of these elements.
ELEMENTS IN PROMOTION MIX

1. Advertising: Any paid form of non-personal communication through mass media about a
service or product sponsor is called advertising. It is done through non-personal channels or
media.
It is a Paid, non-personal communication transmitted through out-of-store mass media by an
identified sponsor.
Print advertisements, advertisements in Television, Radio, Billboard, Broachers and
Catalogues, Direct mails, in-store display, motion pictures, emails, banner ads, web pages,
posters are some of the examples of advertising.

Advantages

• Attracts a large audience

• Many alternatives available

• Control over message content; message can be standardized

• Educate customers about new products and their uses.

Disadvantages

• Standardized messages lack flexibility

• Some media require large investments

Types of advertising

• Consumer oriented
• Information advertising
• Institutional or corporate advertisement
• Financial advertisement

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2. Personal Selling - This is a process by which a person persuades the buyer to accept a
product or a point of view or convince the buyer to take specific course of action through face
to face contact. It is an act of helping and persuading through the use of oral prospective
customers for the purpose of making a sale.

Advantages

• Many ways to meet customer needs

• Less waste
• Better response
• Immediate feedback.
Disadvantage

• Limited number of customers handled at one time

• High costs

• Doesn't get customer in store

• Self-service discouraged

• Negative attitudes toward salespeople (aggressive, unhelpful)

3. Publicity -Non-personal stimulation of demand for a product, services or business unit by

generating commercially significant news about it in published media or obtaining
favourable presentation on radio, television or stage. Unlike advertising, this form of
promotion is not paid for by the sponsor. Thus, publicity is news
carried in the mass media about an organization, its products, policies, actions, personnel
etc.
4. Sales promotion - Sales promotion is any activity that offers an incentive for a limited
period to obtain a desired response from the target audience or intermediaries which
includes wholesalers and retailers. It stimulates consumer demand, market demand and
improves product availability. Examples: Contests, product samples, Coupons,
sweepstakes, rebates, tie-ins, self-liquidating premiums, trade shows, trade-ins,
and exhibitions.

Sales promotion schemes (Techniques)

1. Rebate:-Under it in order to clear the excess stock, products are offered at some reduced
price.
2.Product Combination:-Under this method, along with the main product some other
product is offered to the customer as a gift.

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3. Quantity Gift: - Under this method, some extra quantity of the main product is passed on
as a gift to the customers. For example, 25% extra toothpaste in a packet of 200 gm tooth
paste.
4. Instant Draw and Assigned Gift: - Under this method, a customer is asked to scratch a
card on the purchase of a product and the name of the product is inscribed thereupon which is
immediately offered to the customer as a gift. For example, on buying a car when the card is
scratched such gifts are offered – TV, Refrigerator, Computer, Mixer, Dinner Set,
Wristwatch, T-shirt, Iron Press, etc.

5. Lucky Draw: -Under this method, the customers of a particular product are offered gifts
on a fixed date and the winners are decided by the draw of lots. While purchasing the
product, the customers are given a coupon with a specific number printed on it.

On the basis of this number alone the buyer claims to have won the gift. For example, ‘Buy a
bathing soap and get a gold coin’ offer can be used under this method.

5. Full Finance @ 0%: -Under this method, the product is sold and money received
installment at 0% rate of interest. The seller determines the number of installments in
which the price of the product will be recovered from the customer. No interest is charged
on these installments.
6. Samples or Sampling:
Under this method, the producer distributes free samples of his product among the
consumers. Sales representatives distribute these samples from door-to-door.

This method is used mostly in case of products of daily-use, e.g., Washing Powder, Tea,
Toothpaste, etc. Thus, the consumers willy-nilly make use of free sample. If it satisfies them,
they buy it and in this way sales are increased.

7. Contests:

Some producers organise contests with a view to popularizing their products. Consumers
taking part in the contest are asked to answer some very simple questions on a form and
forward the same to the company. The blank form is made available to that consumer who
buys the product first.

Result is declared on the basis of all the forms received by a particular date. Attractive prizes
are given to the winners of the contest. Such contests can be organised in different ways.

8. Samples or Sampling:
Under this method, the producer distributes free samples of his product among the
consumers. Sales representatives distribute these samples from door-to-door.

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This method is used mostly in case of products of daily-use, e.g., Washing Powder, Tea,
Toothpaste, etc. Thus, the consumers willy-nilly make use of free sample. If it satisfies them,
they buy it and in this way sales are increased.

11. Contests:
Some producers organise contests with a view to popularizing their products. Consumers
taking part in the contest are asked to answer some very simple questions on a form and
forward the same to the company. The blank form is made available to that consumer who
buys the product first.

Result is declared on the basis of all the forms received by a particular date. Attractive prizes
are given to the winners of the contest. Such contests can be organised in different ways.

PUBLIC RELATIONS
Public Relations any communication that fosters a favorable image for the retailer among its
publics
it can be non-personal or personal
it can be Paid or
Sponsor-controlled or not
Public relations (PR) includes information that an organization wants its public (customers,
image for a company, an employees, stakeholders, general public) to know. PR involves
creating a positive offering, or a person via publicity. PR has become more important in
recent years many media outlets people pay attention to, including YouTube, social
networking sites, and blogs. It's pretty easy for anyone to say anything about a company in
public forum.

IMPORTANCE
1. Builds Up the Brand Image
The brand image gets a boost when the target customers get to know about it through a third
party media outlet. A good public relations strategy help the brand builds up its image in a
way it wants to.

2. It’s Opportunistic
Public relations strategies make the brand capitalize on the opportunities. These opportunities
even attract many influencers to share the brand story to their followers.

3. Promote Brand Values

PR is used to send out positive messages which are in line with the brand’s value and its
image. This builds up the brand’s reputation.

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 4. Strengthen Community Relations
PR strategies are used to convey that the brand is as much part of the society as the target
audience. This builds up a strong relationship of the brand with the public.

TYPES OF PUBLIC RELATIONS

According to the functions of the public relations department/agencies, public relations can
be divided into 7 types. These are:

▪ Media Relations: Establishing a good relationship with the media organizations and
acting as their content source.
▪ Investor Relations: Handling investor’s events, releasing financial reports and
regulatory filings, and handling investors, analysts and media queries and complaints.
▪ Government Relations: Representing the brand to the government with regard to
fulfillment of policies like corporate social responsibility, fair competition, consumer
protection, employee protection, etc.
▪ Community Relations: Handling the social aspect of the brand and establishing a
positive reputation in the social niche like environment protection, education, etc.
▪ Internal Relations: Counseling the employees of the organization with regard to
policies, course of action, organization’s responsibility and their responsibility.
Cooperating with them during special product launches and events.
▪ Customer Relations: Handling relationships with the target market and lead consumers.
Conducting market research to know more about interests, attitudes, and priorities of the
customers and crafting strategies to influence the same using earned media.
▪ Marketing Communications: Supporting marketing efforts relating to product launch,
special campaigns, brand awareness, image, and positioning.

ADVANTAGES OF PUBLIC RELATIONS

▪ Credibility: Public trusts the message coming from a trusted third party more than the
advertised content.
▪ Reach: A good public relations strategy can attract many news outlets, exposing the
content to a large audience.
▪ Cost effectiveness: Public relations are a cost effective technique to reach large
audience as compared to paid promotion.
DISADVANTAGES OF PUBLIC RELATIONS
▪ No Direct Control: Unlike paid media, there isn’t a direct control over the content
distributed through the earned media. This is the biggest risk of investing in public
relations.
▪ Hard To Measure Success: It is really hard to measure and evaluate the effectiveness of
a PR campaign.
▪ No Guaranteed Results: Publishing of a press release isn’t guaranteed as the brand
doesn’t pay for it. The media outlet publishes it only if it feels that it’ll attract its target
audience.

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PUBLICITY
Any non personal form of public relations whereby messages are transmitted through mass
media, the time or space provided by the media is not paid for, and there is no identified
commercial sponsor.

ADVANTAGES
Image can be presented or enhanced
more credible source
No costs for message's time or space
Mass audience addressed
Carryover effects possible People pay more attention than to clearly identified ads
DISADVANTAGES
Some retailers do not believe in spending on image-related communication
Little control over publicity message
More suitable for short run
Costs for PR staff, planning activities, and events
RETAIL STORE IMAGE

A good store design represents value and a positive store image. An aesthetic presentation of
merchandise and creative props entice people to come in and purchase your products. In
addition, the image of your store provides customers the opportunity to have a delightful
shopping experience. Having a poor store image will cause you to have fewer walk-in
customers; remember that fewer costumers result in less income.
Creating and maintaining the proper image, the way a firm is perceived by its customers, is
an
essential aspect of the retail strategy mix. The components of a firm’s image are its target-
market
characteristics, retail positioning, store location, merchandise assortment, price levels,
physical facilities (exterior and interior), customer services, community service, mass
advertising and publicity, personal selling and sales promotion.
The store exterior is comprised of the store front, marquee, entrances, display windows,
building height and size, visibility, uniqueness and area, parking, and congestion. It sets a
mood or tone
prospective customer even enters a store.
The general interior of a store encompasses its flooring, colors, lighting, scents and sounds.
fixtures, wall textures, temperature, width of aisles, dressing facilities, vertical transportation,
dead areas, personnel, self-service, merchandise, price displays, cash register placement,
technology/modernization, and cleanliness. The interior of an upscale retailer is far different
from that of a discounter portraying the image desired, as well as the costs of doing business.

In laying out a store's interior, six steps are followed.

One: Floor space is allocated among selling, merehandise, personnel, and customers; and
adequate space is provided for each, based on a firm's overall strategy.

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Two: product groupings are set, based on function, purchase motivation, market segment,
and/or storability.
Three: traffic flows are planned, using a straight or curving pattern.
Four: space per product category is computed via a model stock approach or sales-
productivity ratio.
Five: departments are located.
Six: individual products are arranged within departments
COMPONENTS OF STORE IMAGE

1. Target market characteristics

2. Retail positioning
3. Store location
4. Price Levels
5. Physical facilities (Interior and Exterior)
6. Customer Services
7. Mass advertising and publicity
8. Personal Selling
9. Sales Promotions

The behavior of retailers and their service quality are the two main important components
to increase the images of retailers.
PROCEDURE
Stage 1 – The store image building procedure can be entered with careful analysis of various
attributes that are perceived as important by customer. These stores may vary from one store
to store.

Stage 2 – The next stage involves identifying various attributes that are crucial and valued by
the store competitors

Stage 3 – Once various attributes that are crucial and valued by the competitors are identified
the current image of the store is evaluated.

Stage 4 – The next stage is the retailer must identify the gap between the ideal image and
current image with the help of various tangible and intangible attributes.

Stage 5 – Once the gap is filled, the updated personality of the store must be communicated
to the customer.

Stage 6 – The performance must be evaluated over a period of time. If the modified image
does not fulfill the major objectives, the whole image building process can be repeated.

STORE ATMOSPHERE
The retail store itself provides paid, impersonal communications to its customers. Store
atmosphere reflects the combination of the store's physical characteristics, such as its
architecture, layout, signs and displays, colors, lighting, temperature, sounds, and smells,

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which together create an image in the customer's mind. The atmosphere communicates
information about the store's service, its pricing, and the fissionability of its merchandise.

Retail store's physical characteristics are referred as atmospherics of retail store.

This will appeal customers and encourage them to buy more things.
Physical structure can be broadly classified exterior, interior, store lay out and visual
merchandising (display). Exterior refers to aspects like store front, display windows,
surrounding businesses, look of the shopping centre etc. It is considered important to attract
new customers. The interior atmospherics refers to aspects like lightings, colour, interior
decorations etc.
(ROLE OF ATMOSPHERIC IN RETAIL BUSINESS, EXTERIOR ATMOSPHERICS,
INTERIOR ATMOSPERE – Already given).
ELEMENTS OF RETAIL STORE ATMOSPHERE (Details already given in Chapter 2)

10. Exterior
11. Interior
12. Store Layout
13. Visual merchandise

STORE LAYOUT (Meaning, objectives and types – are given)

CUSTOMER RELATIONSHIP MANAGEMENT (CRM)
Customer Relationship Management (CRM) refers to all marketing activities directed
towards establishing, developing, and maintaining successful relationship with their
customers.
The objective of relationship marketing is to attract, maintain, and enhance customer
relationships with the existing and potential customer.

STEPS INVOLVED IN CRM PROCESS

Broadly, CRM process can be said to be comprising of four interactive activities.
1. Gathering customer data and constructing a customer database.
This is the first step in this process. This is a database which would comprise of all the
data the firm has collected about its customer and will be the foundation based on which all
the
future CRM activities are planned and implemented. Ideally, the customer database must
contain the following information.
Transactions - a brief history of the purchase made by the customer in terms of- date,
price, goods etc
A record of customer interaction with the retailer or retail outlet. This includes the
information on how many times the customer had visited the shop, website, contacted via
phone etc.
Customer preferences - Information related to what was the customer's choice in terms of

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color, brand, material, size etc
Descriptive information - more information about customer especially demographic and
psychographic data.
Feedback on customer's response to marketing activities.

2. Analyzing customer data and identifying target customers.

The next step in the CRM process is to analyze the customer database and use this
information to help retailers develop programmers for building customer loyalty. Retailers
make
use of certain approaches to obtain such information. These include-
Data mining techniques - This technique identifies patterns of customer behaviour which
theanalyst is unaware of prior to searching through the data.
Market basket analysis- This type of analysis focuses on the composition of basket or
bundle of products purchased by the customers or household during a single shopping
occasion
identifying the specific market segments
3. Develop CRM programmes for the different customer segments
Usually the retailer will work out programmes to retain their best customers, make efforts to
convert good customers into high LTV customers and try to get rid of unprofitable customers.
This
include-
Retain best customers
Special customer services
Converting good customer to best customer
To tackle dealing with unprofitable customers

4. Effective implementation of CRM programmes

The purpose of having CRM programmes is to increase sales and profit of the retailer. The
effectiveness of CRM programme will depend upon the coordination of different functional
activities in the retailers' organization. Thus MIS department has to collect, analyze and make
the relevant information easily accessible for employees to implement the programmes.
Finally successful implementation of the CRM programmes will depend upon store
operations and human resource management i.e. hiring, training and motivating employees
who will be using the information to deliver personalized services.
Customer Relationship Marketing (CRM) aims at providing four types of benefit
components to the customer’s personalization, communication, rewards and special treatment
benefits .The CRM strategies in the organized retail sector have become extremely important
these days with the introduction of several loyalty programmes and major focus on customer
service. Now rewards are price offerings and money savings in order to procure the
customer's loyalty.

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RETAIL CONTROL SYSTEMS
1. FINANCIAL CONTROL.
Financial controlling is very important in all business, especially in retail
sector. The responsibility of controlling finance is upon retail finance
controller. His duties and responsibilities are mentioned below.
• Review financial statements to analyze actual vs. plan metrics and
performance, impacts and operational issues
•Analyze performance of retail operation
• Develop and Track performance of the business sales forecasts
• Develop, track and analyze trends for key performance indicators
• Participate in team meetings as it relates to goals and objectives
• Achieve project deadlines, goals and overall expectations
• Review management reports to identify business impacting trends, including:
a) Scorecards for three sales channels of trade
b) Delivered volume reports
c) Profit margin reports
d) Expense reports
e) Financial Reports

2. MERCHANDISE CONTROL
Merchandising control is the process of collecting and evaluating data on all
aspects of each retail merchandise category, including sales, costs, shrinkage,
profits, and turnover. Control is achieved through the maintenance of an
inventory book where all data are evaluated.

Retail Merchandising Analyst / controller

A retail merchandising analyst helps maximize the profit potential for a retail
store or retail chain. By analyzing inventory risks and opportunities, and
implementing inventory allocation strategies, the merchandising analyst
improves cash flow and increases profit margins.

Key Responsibilities of a Merchandising Analyst - A merchandising

analyst streamlines the flow of merchandise through a retail outlet by
providing the organization with analysis, allocation, and guidance.

Trend Analysis Responsibilities of a Merchandising Analyst - Analysis

responsibilities include monitoring store category sales, supervising physical
inventory, identifying trends, and monitoring the timing and scope of seasonal
changes, Inventory

Allocation Responsibilities of a Merchandising Analyst - Allocation

responsibilities include maintaining desired inventory levels and assortments,
scheduling deliveries, and overseeing shipping/receiving and warehousing of

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 merchandise. Working directly with suppliers, merchandising analysts develop
supply strategies that will minimize stock outs while maximizing inventory
turns.

3. RETAIL OPERATIONS CONTROL

It is an operations manager’s or controller’s daily job depends a lot on the
sector in which he or she works, but in most cases there are four main tasks:
supervising staff, project management, working with clients, and solving
problems. Most people in this profession work in storefront or retail settings
managing shops and the flow of commerce from day to day and week to week.
Some managers work as consultants, which mean that they take clients on for
a shorter amount of time and focus on advising owners and staff on ways to
become more efficient.

4. HUMAN RESOURCE MANAGEMENT IN RETAIL

Retailing is very different from other industries. As in any other services
industry in retail human aspect is of prime importance. With technological
advances there have been changes in retail environment. However this has
only increased the importance of human resources.
Any typical retail organisation would commonly need the following human
resource functions:
• Job analysis and job design
• Recruitment and selection of retail employees
• Training and development
• Performance management
• Compensation and benefits
• Labour relations
• Managerial relations

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