Retail advertising and sales promotion

Promotion
Promotion refers to any activity that is
primarily intended to create demand
and awareness for the product and for
the company. Different types of
promotions are:
1. Advertising
2. Publicity
3. Personal selling
4. Sales promotion

Advertising
Advertising is any paid form of nonpersonal presentation and promotion
of ideas, goods or services by an
identified sponsor. The advertisements
are resorted to for creating awareness
of the product, demand creation,
corporate image etc. Advertising
moves the buyer towards the stores
whereas the sales promotion moves
the product towards the buyer.

Publicity(Non-paid form of advertising)

Publicity refers to the news

item which is generally not paid
for, whereas the advertisements
are paid for.

A news item regarding

collaboration between Wal-Mart
and Bharti.
A news item about Vivek
completing 25 years is publicity.

Personal Selling

While the advertising is a nonpersonal selling, the personal

selling
is
a
face-to-face
presentation of goods and
services to the prospective
buyers.
The
salesman
approaches,
convinces
and
overcomes the objections and
then sells the product.

Sales Promotion
A direct inducement that offers extra
value or incentive for the products,
sales force, ultimate customers or
the distributors with the primary
objective of creating an immediate
sale.
It is a short term incentive to
encourage purchase or sale of a
product or service.

Sales promotion

Sales promotion activities are

those that are undertaken by
the seller other than advertising
and personal selling. Some
examples
are:
Product
demonstrations, window display
of goods, participation in fairs,
exhibitions, exchange offers etc.

Sales promotion is defined

as those selling activities
that
supplement
both
personal
selling
and
advertising and coordinate
and help them to make
effective sales efforts, such
as
displays,
shows,
expositions demonstrations
and
other
non-recurrent

Merits of promotion
1.Helps to create awareness among the
potential customers of the stores and
serves as a reminder media for the
existing customers.
2.Serves as a medium to reach the market.
3.Helps in building a good image for the
stores.
4.Continuous
promotion
builds
brand
loyalty.
5.Able to demonstrate the superiority of
one store over the other

Criticism against the promotion

1. It makes people to buy

things that they do not really
need.
2. It makes them buy things
that they can not really
afford to pay. Because of
catchy promotional efforts,
they tempt people to buy
goods
with
financial

4.
All promotions cost money and
ultimately it is the customer who has
to pay for all this.
5.
Some companies have started to
feel that even if their product quality
is not good, they will be able to
market the same effectively by
extensive promotional efforts. As a
result of such thinking, customers
may receive goods of sub-standard
quality.

Free samples

Free samples are given to the

customers so that they would
definitely use the product and If
satisfied, would become a
regular
customer
for
the
product. These samples are
distributed by the dealers or by
the manufacturers.

Some samples are distributed

by sticking them to the
newspapers
or
magazines.
Detergent powders, shampoo,
etc are items normally given
like this.

Offering
samples
is
quite
expensive. Not only the cost of
the product is involved but also
the cost of distribution. Also if
the final product is not of the
same quality as the free
sample, it may create customer
resentment.

Price cut by the manufactures

A price cut in the printed price

list is announced for a small
period of time in order to boost
the sales .

Many experts feel that this is

not very desirable as this may
affect the dealer morale as they
will get reduced commission.
Also the brand value may be
affected. The customers also
may start feeling that the
company was making undue
profits earlier.

Money refund offer

The retail chain Pizza corner

supplies the pizza free if the
delivery is not made within 40
minutes.

Gifts to customers

Gifts are directly offered to the

customers with the purchase of an
item.
Examples are:
Buyers of Kellogg corn flakes get a
bowl as the gift. Buyers of Cinthol
soap may get some small biscuit
packets. These things attract the
customers even though the value of
the gift item is small.

Off-season discounts

Manufacturers
of
air
conditioners offer their products
with good discounts during the
winter months. This is because
the natural demand during the
period is low and they are
creating demands.

All the textile companies offer

discounts after all the festival
seasons are over. The months of
October, November and January are
festival months with festivals like
Pooja, Deepavali, Christmas, new
year and Pongal. The stores find that
the demand drops after this season
and in order to keep their stores
selling, they have to resort to these.

Festival discounts

During festival season also, the

stores offer attractive schemes
in
order
to
counter
the
competition.

Coupons

The coupon are given to the

customers against purchases and
can be used for subsequent
purchases. The consumers will
receive a certain price reduction
as stated in the coupon.
Some Pizza companies distribute
leaflets and they contain discount
coupons which can be used later.

It is not easy to calculate the

effectiveness of the scheme as we
do not know how many would have
bought the product without the
benefit.
However the sales with the
previous
month
without
the
scheme can be compared. Also
coupons do not spoil the normal
prices for the product.

Exchange offer

The customers can return their

old used item and a certain
price will be fixed for the old
item and the same will be
deducted from the price of the
new item.

Dealers of TV manufacturers like

Sony, Samsung, Onida, LG etc are
resorting to this regularly. All car
dealers of leading companies like,
Maruti, Ford, OM, Tatas advertise
that the customers can trade-in
their old cars for the newer ones.
Many other customer durables
dealers ( Fridge, air conditioners,
music systems) resort to this.

Free delivery and installation

Some dealers do not charge

fortransporting the goods to the
households if they are within
certain distance. They also do
not charge for installation.
Computer dealers, TV dealers
etc do this.

Lucky draw

The buyers are given a coupon

which they should fill and drop
in a box in the dealers place. At
a pre-determined time and
place, a lucky draw will be
conducted and the winner will
get attractive prizes.

In some cases like industrial

exhibitions, the visitors are
asked to drop their visiting
cards and a lucky draw is
conducted. This also helps the
sellers to get database.

Slogan contest

Customers are given a coupon

where they should also write a
slogan for the product or the
company. Best slogans are
selected and rewarded.

Retail advertising

Advertisement does not only

provide the information about
the product and services and
availability at various retail
locations but also provides an
important link in the retail
segment between the retailer
and the customer.

Benefits of retail advertising

It helps in creating awareness

about its existence, price,
different retail locations etc.
It educates the customer about
the new products and services
and their diverse use.

It conveys details of sales

promotion currently available at
retail stores.
It also highlights the superiority
of the products / retail stores

Types of Advertisements for Customers

Consumer-oriented or Persuasive
Advertising
It surrounds our daily lives and
provides
stimulus
to
purchase
various products or services. It helps
in maintaining a regular demand and
attracts a lot of attention and
preference of the customers. The
major objectives consumer-oriented
advertising are as follows:-

 Information to customers
about new products.
Holding consumer patronage
against intensified campaign
by rivals .
Teaching customers about the
usage of the product.
Promoting a contest or a
premium offer.
Establishing a new trade

Informative advertisements
Purchases of durable products
are generally erratic and often
too expensive to buy, so the
buyer
requires
elaborate
information
about
them.
Hence, the retailer and the
manufacturer spend a huge
amount
on
informative
advertising.

Institutional or Corporate
Advertising
Its main motive is to build a
corporate image. In corporate
advertising an attempt is made
to highlight the achievements
and objectives of the retail
organization. The institutional
advertising campaigns have
the following objectives:

 Creating the corporate image.

Building up retailer prestige.
Emphasizing the services and
facilities provided by the outlet.
Increasing consumer
friendliness and goodwill
towards the retail organization.

Financial Advertising
It refers to advertisements by
various financial institutions
like Standard Chartered Bank,
ICICI,
etc.
They
provide
information
about
the
investment opportunities and
the
risks
and
benefits
associated with them.

Advertising Budget

A
well-designed
retail
advertising campaign requires
proper budgetary allocation for
advertising. The appropriation
of advertising budget must be
determined
with
direct
reference
to
advertising
objectives.

Four widely used methods for

determining the expenditure on a
retail campaign are: Affordable method.
Percentage-of-sales Method.
Objective and Task Method.
Competitive-parity Method.

Affordable Method

Many small retailers use this

method in which they set the
budget at a reasonable levelthat which they can afford.

Percentage-of-sales Method

In this method the retailer

budgets
the
advertising
expenditure in terms of a
specific
percentage
of
forecasted sales.

Objectives and Task Method

In this method a retailer

establishes
the
advertising
objectives and then defines the
tasks required to achieve them
after estimating the cost of
performing those tasks.

When all the costs are totaled

the retailer has his advertising
budget ready. In short, this
method
begins
with
the
retailers
advertising
objectives
and
then
it
determines the cost to achieve
these objectives.

Competitive-parity Method

In this method the retailer

allocates
the
advertising
budget at a level at which the
competitors spend for the
same kind of time periods and
campaigns.

The
two
major
types
of
advertising campaigns relevant
to the retail sector are:
1)
Vertical
Co-operative
advertising.
2)
Horizontal
co-operative
advertising.

Vertical Co-operative advertising

This type is planned when the

retailers and other channel
members
(usually
manufacturers)
share
the
advertising budget in a predetermined
way.
In
many
instances the cost is shared
equally.

 If Lanson Toyota advertises about

the Toyota cars and its showrooms in
Chennai, the cost is shared as 50%
each between the dealer (Lanson
Toyota)
and
the
manufacturer
(Toyota Kirloskar Motors). Here we
can
understand
that
the
manufacturer subsidizes some of the
retailers advertising budget if it
features the manufacturers brand.

 Samsung may have a special

sales promotion for their LCD
TV and the retailer Vivek may
advertise under the co-op
budget and half the cost of the
ad will be borne by the
manufacturer i.e Samsung.

 In the case of FMCG products

that are sold by several outlets,
large and small, manufacturer
extensively support the momand-pop
stores
and
the
independent retailer since they
lack the financial resources and
also the professional expertise.

 In addition to lowering the

costs, co-op advertising enables
the small retailer to associate
his name with the well-known
national
brands
and
use
attractive ad copy developed by
the national brand


Co-op
advertising
has
drawbacks also. Suppliers want
prominence to be given to their
products in the ad whereas the
retailers want prominence for
their retail stores in the ad. This
creates a clash of interest.


Ads
developed
by
the
suppliers or manufacturers will
have the names of all the
retailers and so the retailer will
feel that there is no focus on his
store.

Horizontal co-operative advertising

This type is launched when two or

more retailers come together and
advertise together thereby sharing
the cost of advertising of a
particular product.
There are about four retail dealers
for Hyundai cars in Banglore.
Sometimes all of them advertise
together
about
certain
sales
promotion undertaken.

Various media available for retail advertising

In the past, retailers used

newspaper
advertisements
extensively. Newspapers also
distribute free-standing leaflets
which are inserted into the
newspapers.

Newspapers offer opportunities

to small retailers by developing
different editions for different
localities.
The
Hindu,on
Sundays,
has
different
supplements to different parts
of the Banglore city even
though the main newspaper is
common for all.

The
cost
of
developing
newspaper ads are lower as
compared to for other media as
it can be developed by less
experienced persons.

 Retail ads in magazines

which are weekly or fortnightly
is done by major retailers like
Big Bazaar, Croma, Reliance
Fresh etc

 Direct Mail is also used by

retailers. RMKV, a leading
textile
retailer
sends
communication to their clients
through mail. The addresses are
collected by them at the time of
the customers visit to their
showroom
or
through
the
contests conducted by them

 Television commercials can

be used by the retailers.
Retailers use TV for building
image
for
their
stores.
Television
ads
can
also
demonstrate the product usage.
In
addition
to
the
high
production
costs,
broadcast
time is also very expensive.

 FM Radio is a major medium

today. With increasing popularity,
it is very suitable for retailers
because of its relatively low cost,
low cost of production etc.
Internet and outdoor bill boards
are also used to promote retail
stores and their merchandise.