CHAPTER 11

COMMUNICATING THE PRODUCT OFFER

LEARNING OBJECTIVES

An appreciation of the challenge associated with communicating a retail product offer Understand the role product-related communications play in achieving both short term and strategic objectives Explore the relationship between types of communication channel and promotional objectives Understand the need for stock management support when implementing promotions Introduce the concept of integrated retail communications Understand that retailer and supplier promotional objectives often conflict, but benefits can be gained through collaboration

RETAILER TO CUSTOMER COMMUNICATIONS

The retail environment (see chapters 9 and 10) is an effective communication tool, but relies on customers being near or in outlet Communications need to be sent further afield in order to achieve objectives
long

term, strategic, with more general aims short term, tactical, with specific aims

Communications need to support product management process and play an important role in reinforcing retailers market position

Table 11.1 Marketing communications objectives Strategic Long term Operational and promotional Short term Examples Establishing a clear market position for a retailer Changing consumers attitudes towards a retailer Improving a retailers image Portraying a retailer as a customer focused organisation Enhancing a retailers reputation as a responsible corporation Increasing customer awareness of category X Increasing sales of brand Y Increasing transaction levels per customer Informing customer that prices have been reduced Encouraging customers to buy product A with product B

RETAIL COMMUNICATION CHANNELS: ADVERTISING

Advantages:
Effective

way to communicate product offers due to large reach High impact Targeted media vehicles can be chosen in line with retailers target customer

Disadvantages:
retailer

may not have national coverage (store and product) difficult to portray extensive product range high cost

BOX 11.1 THE ADVANTAGES AND DISADVANTAGES OF USING CELEBRITIES IN RETAIL ADVERTISING ADVANTAGES Recall consumers will tend to remember the advertisement Recognition recognising the well known person draws attention to the retailer advertisement The positive feelings consumers have about the celebrity are transferred to the retailer DISADVANTAGES High cost Incorrect association consumers remember the celebrity but not the retailer or their products Celebrity may fall from grace, or suffer from over exposure, resulting in negative feelings being transferred from celebrity to retailer Consumers may conclude celebrity is only doing it for the money, especially if they have little association with the retailers offer Consumers may tire of the same people being used in every advertisement for the retailer Some celebrities may not be known to some consumers, therefore the point or humorous aspect of the advertisement may be lost Use of celebrities in retailer advertising becomes too frequent and loses novelty

The celebrity adds credibility if they have a strong association with the retailers product (valid endorsement) Actors can be used to play roles, which can be used in scenarios to draw attention to particular aspects of a retailers offer Celebrity advertisements are often humorous, which aids recall and generates positive feelings

AMBIENT ADVERTISING
The placement of advertising in unexpected locations e.g. petrol pump, on floor in store Use of in-store digital communications and plasma screens has enabled and fostered interest in this channel

Advantages

flexible high quality imaging message relayed close to purchase point

PRODUCT SPECIFIC PROMOTIONAL COMMUNICATIONS

The product range itself is an effective arena for product specific messages concerning objectives such as

increasing sales of specific brand encouraging customer to try or trade up encouraging multiple purchases counteract promotions of competitor capitalise on seasonal sales

Sales promotion is a term that covers this type of activity and is normally supported by point of sale/purchase materials

FIGURE 11.1 SALES PROMOTION

ACTIVITY AND P.O.P. SUPPORT

Audio announced events

Signs

Fixtures and displays

Screens and videos

Price reduction (markdown) or other product specific price promotions

Multi buys/ multi saves

Loyalty schemes programmes

Banners
Coupons

Seasonal sales (across Competitions all products) Special events

Packaging

Special Demonstration pack and sampling trials quantity bonus

Posters
Information and promotional kiosks

Personal introduction

Leaflets

PROMOTIONAL PRODUCT PLANNING

Promotional activity to increase sales may be

offensive,

planned into forecast and buying budget (see chapter 6): special offers defensive, to bring sales back in line with forecast: reduced prices

Promotional planning can involve:

co-ordination

with media advertisements additional space allocation setting up POS materials and special displays

PROMOTIONAL PRODUCT PLANNING (2)

A promotion that aims to increase sales needs to be supported with extra stock (unless clearing stock) or investment into promotional activity is wasted Efficient promotions (see ECR, chapter 3) are those that improve overall category performance, rather than transferring sales between brands Well supported promotions with clear consumer benefits will strengthen retail image Too many minor promotions that are not well supported may cause customer dissatisfaction and store clutter. Collaborative planning (see CPFR, chapter 7) enables retailers and supplier to run promotions for mutual gain

STRATEGIC PRODUCT COMMUNICATIONS

Product ranges can be a vehicle for retailerto-customer communications that achieve aims other than direct sales increase, such as
improving

retail brand image maintaining customer loyalty improving public relations providing interest and inspiration to customers providing opportunity for good publicity

Examples: cultural events, film releases, ethical products

PUBLICITY

Publicity, like other strategic communications can be managed but it cannot be controlled as it is not directly paid for
can

be positive or negative is highly credible

A pro-active public relations / media centre can help to

maximise

positive publicity minimise / counteract negative publicity generate publicity for promotional events

PERSONAL COMMUNICATIONS

Outlet space and sales personnel provide opportunities for direct personal communications Personal communications are important when retailer sells complex products Focused on personal selling, but in era of crossformat shopping, closing sale may be an inappropriate objective. Arming sales personnel with high level of product knowledge and training in sales technique will help them to match product features and benefits to customer needs and wants

COMMUNICATION THROUGH PACKAGING

Packaging plays an important communications role in three ways

how

the product is packed up when sold how the product is presented to customer (especially food products) provides vehicle for product information

Packaging can communicate tangible and intangible product benefits

INTEGRATING PRODUCTRELATED COMMUNICATIONS

Communications work best if all channels are relaying consistent messages and the delivery of the messages is co-ordinated Examples of integrated retail communication activity
loyalty

schemes using paid for media to advertise sales promotion activity

Corporate identity should be integrated with promotional communications

INTERNAL COMMUNICATIONS

Retail product managers need to communicate product plans effectively to ensure proper implementation
product

information, especially new / improved product display planned promotional activity

Formalised and open product range feedback system is also part of internal communications

RETAILER-SUPPLIER ISSUES

Supporting a suppliers promotional activity can pose difficulty for retailer Different

objectives:

supplier wishes to improve their brand performance retailer wishes to improve category performance

Attitude

to POS materials and space allocation:

supplier will want in-store support and extra space retailer may not be willing to give more space and may consider POS to be clutter

Conflicting

images Non-compliance with agreed promotions

CO-OPERATIVE PROMOTIONAL CAMPAIGNS

Benefits
pooling

of resources should result in better campaigns can give small retailer access to professional promotional material and an opportunity to create interest good image associations better co-ordination of timing of promotions cost of promotional activity included in product cost prices

EVALUATION OF PRODUCT RELATED COMMUNICATIONS

Specific promotional activity:

sales

of specific product endurance of sales uplift sales of other products overall profits (e.g. category)

Strategic promotional activity:

overall

sales increased transaction levels customer loyalty improved retail brand image