Managing Promotions

UNIT 6 MANAGING PROMOTIONS IN in Retail

RETAIL
Structure
6.0 Objectives
6.1 Introduction
6.2 Elements of the Retail Promotional Mix
6.2.1 Advertising
6.2.2 Public Relations
6.2.3 Personal Selling
6.2.4 Sales Promotion
6.3 Planning A Retail Promotional Strategy
6.3.1 Determining Promotional Objectives
6.3.2 Preparation of Overall Promotional Budget
6.3.3 Selecting the Promotional Mix
6.3.4 Implementation of Promotional Mix
6.3.5 Review and Revision of Promotional Schemes
6.4 Let Us Sum Up
6.5 Keywords
6.6 Answers to Check Your Progress
6.7 Terminal Questions
6.8 Further Readings

6.0 OBJECTIVES
After going through this uniyou will be able to:
● analyze the target audience;
● apply advertising and promotion objectives to meet organizational goals;
● demonstrate the creative process in developing an advertisement;
● describe the advantage and disadvantages of various media;
● discuss promotional objectives;
● develop an integrated marketing communications plan;
● describe elements of the retail promotional mix;
● prepare an overall promotional budget; and
● identify and analyze the ethical, legal and social issues involved in advertising and
promotion.

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Retail Operations and
Store Management-II 6.1 INTRODUCTION
Retail promotions have become a necessary part of the retail marketing process. It is a
process of communicating with customer with a specific purpose of informing, persuading,
and reminding the target customer on various aspects of the retail objectives. In the first
part of this unit, the elements of retail promotional mix are discussed; and in the second
part of this unit various aspects of retail promotional strategy is discussed. Retail promotion
entails that the retailer must make detailed study of its target customer group’s buying
behaviours from all angles so as to define and execute its promotional tools that will help
the retailer to get the customers into the store; and then make its purchases of the
merchandise available in the store. The strategies designed to get the customers inside
the store and then buy merchandise on offer, needs to be tailored to match with customers’
desires - psychological, emotional, and physical. This is necessary to ensure that the
marketing expenses must be done to make optimum use of the available spend.

6.2 ELEMENTS OF THE RETAIL PROMOTIONAL MIX

The important elements of promotional mix are: advertising, personal selling, public
relations, and sales promotion. Let us learn these elements in terms of their goals,
advantages and disadvantages, and their basic forms. The overall strategy needs to
integrate all these elements into a well thought out plan, so as to achieve the retail
objectives.

6.2.1 Advertising
It is comprised of following elements: a) it is a paid activity – as the retailer has to make
payment to the advertising agency for the services or the media whose time or space
used by it; b) it is a non-personal presentation – as a standard message is presented to
the total audience of the concerned medium, and not adapted to each individual
requirement; c) it is an out-of-store mass media – which include newspapers, radio, TV,
Web, and other mass channels – each having its own audience – which becomes available
to the advertiser on payment of the given space or time. It is not personal; d) The
sponsor of the advertisement is identified – that is the agency or company sponsoring
the advertisement is known as well as about whom and whose interest is taken care of
is known to the audience of the concerned medium. Retail Management, Berman Barry
and Evans R Joel, ch. 19, pp 568 to 584, Pearson Education inc., New Delhi, 2008.
As per the study done by Schonfeld & Associates in US of the retail ad spend by
different types of retailers in 2004, the ad spend of Apparel and Accessories stores is
about 3.7 per cent of the total sales, while that by a Furniture stores is about 5.9 per
cent; the lowest spend is by Drug and proprietary stores, which is about 0.7 per cent.
Wal-Mart spends just 0.4 per cent of sales on ads; it mainly relies on word of mouth
publicity, in-store events, and its well-known policy of everyday low prices which provides
the recognition to Wal-Mart as a destination store.
Comparison of retailer and manufacturer’s advertising strategies: Table 6.1 gives
a comparative view on retailer’s and manufacturer’s advertising strategy.

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 Table 6.1: Comparison of Retailer’s and Manufacturer’s Advertising Strategies Managing Promotions
in Retail
Retailer’s advertising strategy Manufacturer’s advertising strategy
It has the geographically more concentrated The market is widely dispersed.
target markets.
Retailer can adapt better to local needs, habits, It has to take into account the preferences of
and preferences. its target customers rather than the local
needs.
Only the largest retailers and chains can All branded products use a suitable media as
advertise on national TV programs per their financial abilities, with certain
frequencies.
Retail ads stress – individual items are Manufacturers are more often concerned with
placed for sale and advertised over short developing favourable attitudes.
periods.
Retailers usually stress prices of products in Manufacturers usually stress on key product
ads. attributes.
Often several products are shown in the ad Manufacturers normally talk of few products
in a single ad.
Media rates tend to be lower for retailers. Manufacturers have to pay normal rates.
Due to lower ad rates for retailers many Manufacturers can rarely get into co-operative
manufacturers or distributors join hand with advertising, because of competitive nature of
retailers for advertising their brands. products or diverse interests of
Sometimes even more than one retailer may manufacturers; unless there is a some kind of
join hands for advertising about their complementary nature of products of two
products. These are called co-operative manufacturers along with good business
advertising. understanding.

1. Retailer’s Advertising Objectives: For a retailer, there are many objectives to be

achieved, and some of the major ones are as follows:
● Lifting sales during lean times;
● Improving customer traffic in the store;
● For developing and /or reinforcing store’s image;
● Developing demand for its private labels.

2. Advantages of Advertising
● There is a large audience normally for print media, which is known from its circulation
figures. The circulation is also supplemented by the passing of a copy from one
reader to another.
● The cost per reader or viewer or listener works out to be lower than that for a
personal or direct marketing.
● Due to availability of alternative media the retailer can choose among the media
that suits its budget and target market.
● The advertiser has complete control over the content of the message, the graphics
in the message, timing of the message, and size 9or length) of the advertisement.
The message is thus standardised for delivering to the entire audience, in a chosen
format.
● The print media offers the greatest advantage of reading the same at the reader’s
or target audience’s convenience and at a required frequency.

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Retail Operations and ● The advertiser can influence the editorial content or a special feature (by a print
Store Management-II
medium or TV show, news story, etc.). Such content helps in building product’s or
retailer’s credibility.
● Due to advertising, self-service or reduced service operation is possible, as the
customers become aware about retailer as well as retailer’s offerings, thus reducing
shoppers’ dependence on sales representatives.
3. Disadvantages of Advertising
● A standardised message either on TV or radio or print medium lack flexibility as it
cannot be changed as per the need of individual customers among the target audience
of the concerned medium.
● The media advertising is normally very costly and hence, not affordable for small
stores.
● Media normally reach to large audience spread over wide geographical areas,
which may be wasteful for a retailer focusing on certain trading area or
neighborhoods.
● For popular media the placement of advertisement needs certain advance booking
period, this reduces the retailer’s flexibility to cash on the fad items or current
trends or events.
● Pamphlets or inserts placed in newspapers have a high throwaway rate, thus, the
percentage utility of such medium is reduced considerably;
● A small newspaper ads or a 30 seconds ad on TV or radio cannot include certain
details thus, reducing their usability.
In the above section we have covered the advantages and disadvantages in general, the
more specific merits and de-merits are given in the next section.
4. Specific Media – merits and demerits: In Table 6.2 we provide an overview on
different mediums in use to-day for retail advertising.
Table 6.2: Overview of different mediums available to retailers

Medium Important merits De-merits Market Particular

Coverage Suitability
Newspapers Most preferred Possible waste, Particular target Large retailers
(daily and medium by Competition audience or and retailers
weekly) retailers, among retailers, entire metro with local reach
Market Black and white area. – particularly
coverage format, Local editions – hyper stores
Short lead time, Appeal to fewer like western and super
Reasonable senses than that suburbs etc. market stores.
costs, of TV. could be
Flexibility, available.
Graphics,
Editorial
association.
Telephone In normal The listing is Geographic area All types of
directories directory retailer alphabetical and of the telephone goods and
gets free not type-of- directory. service oriented
alphabetical business and retailers.
listing, hence, chance
People are not of missing it by
exposed to interested
other competing population.
142 retailers.
 Managing Promotions
Yellow Pages Listing is based Reader is Specific product All types of in Retail
on type-of- exposed to or industry or goods and
business, other occupation service oriented
A customer competitors, coverage – retailers
looking for Retailer pay for exposure to
certain products listing widespread
or service may interested
refer it, population
Widespread
usage,
Long shelf life
Direct mail Reaches to High Controlled by New and
target audience. throwaway rate, the retailer expanding
Tailored format, Poor image to retailers,
Controlled some people, Retailers using
costs, Low response, coupons or
Quick feedback, Out-dated special offers or
Tie-ins with mailing list new product
billing firms launch
Radio Relatively low No visual Definable market Retailers
cost, impact, area surrounding focusing on
Good medium Need for the station identifiable
for car drivers repetition, segments
and small town Need for
population, brevity,
Ability to Wastage
segment
population as
per programmes,
Short lead time,
Wide reach
TV The dramatic High minimum Definable market Retailers of
effect of costs, area surrounding goods and
messages, Audience stations for services with
Large market waste, cable operators wide appeal and
coverage, Need for brevity – but in satellite reach.
Creativity, and repetition, channels or DTH It suits retailers
Program Limited channels the having tie-up
affiliation availability of reach is over the with brands
popular times whole national with mass
for non- audience appeal
sponsors
World Wide Provide Competitors Global All types of
Web information access to goods and
about range competitive service oriented
availability and information on retailers
store locations, products,
People can prices and store
order directly on locations,
company’s site, Offers
Advertising on customers easy
search engines, comparability
Other firm’s on product
websites, range, prices,
Provide and other
customer services
service and without the
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Retail Operations and
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communication opportunity to
facility serve customers
on other
features of a
brick & mortar
store
Transit Captive The ad clutter, Urban or metro Retailers near
audience Distracted community transit routes
travelling on audience, served by transit and stations
buses, trams, Lack of system and those
trains and taxis, availability in appealing to
Mass market, small areas , commuters
High level of Restricted
repetitiveness, routes,
Geographically Graffiti
defined markets
Outdoor (bill Large size of the Clutter of ads, Entire metro area Amusement and
boards) ads that can Distracted or a tourist oriented
attract attention audience, neighbourhood, retailers,
of the passing Limited or specific town Well-known
public, information, area firms
Frequency of Legislations
exposure, banning
Relatively low outdoor ads
cost,
Assistance in
directing new
customers
Magazines Tailoring to Long lead time Entire metro area Restaurants,
specific markets, required, or region, Entertainment
Creative Less sense of Local editions oriented firms,
options, consumer could be Specialty shops,
Editorial urgency, available Mail order firms
associations, Waste
Longevity of
messages,
Colour ads
Single page Targeted High Single Restaurants,
flyers or audience, throwaway, neighbourhood kirana stores,
multi-page Low costs, Poor image to supermarkets,
ads Flexibility, some, neighbourhood
Speed Clutter stores

Source: Adapted from ‘Retail Management’ by Berman Barry and Evans R Joel, pp 572 to 573, Pearson
Education inc., New Delhi, 2008.

5. Different Types of Advertisements

The advertisement can be classified in terms of its emphasis and content as explained in
the Table 6.3 below.

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 Table 6.3: Types of Advertisements Managing Promotions
in Retail
Types Emphasis
Pioneer ads The major emphasis is on building awareness of the store, its offerings,
and its location.
Competitive ads Here the emphasis is on explaining and convincing the customers
about the store’s strengths vis-à-vis the competition.
Reminder ads These ads are planned for emphasising the attributes that have made
the store successful; and are targeted at the loyal customers.
Institutional ads The emphasis is on building the corporate image of the company
behind the retail stores; and revolves around the long-term vision or
policy of the company
Thanks giving ads The emphasis is on thanking customers after a particular season or
promotional scheme for making it successful, thereby attracting
attention of customers of other competing brands.

Retailers may either pay for their ads directly or get into co-operative or sharing
arrangement with other parties having a common goal. In a sharing arrangement there
could be a vertical co-operative advertisement, whereby the retailer joins hands with the
distributor of a product or manufacturer for releasing ads and sharing of ad cost. There
could be also horizontal co-operative ads, whereby the retailers in a shopping centre or
on a high street or with a common promotional goal may join hands in sharing the ad
cost.

6.2.2 Public Relations

The aim of public relation is to promote a positive and favourable image of the retailer
among the general public. The idea is to influence all the stakeholders’ at large viz.
customers, investors, government, channel members, employees and the general public
about the store’s image. The public relation effort can be paid or non-paid, or sponsor
controlled or non-controlled.

Source: http://www.indianewscalling.com/tip.php?tipid=20774
Figure 6.1: Publicity Made by Big Bazaar
Publicity which is part of public relation effort is a non-paid activity, as no direct payments
are made for the space or time (though there could be some indirect passing of benefit
during the press meet organized by the sponsor); and non-personal. There is no specific
commercial sponsor of the publicity campaign.
For shoppers publicity in mass media is very effective as it is given more credence than
the ads in newspapers or radio or TV. Hence, many retailers try to generate favourable 145
Retail Operations and publicity through its public relation effort for new launch of stores or promotions or
Store Management-II
private labels, before the release of ad campaigns. Advertising and public relation effort
should complement each other, and should help in generating easy recognition and recall
of the store name.
Public relation efforts could be seen in the form of organization or sponsorship of marathon
race, cycling event, fashion show, school functions, and donation of funds to a social
organization and so on.

1. Major Objectives of a Public Relation

The major objectives of a public relation exercise are to:
● Create better awareness about the retailer and its long term goals;
● To enhance corporate image of the company behind the retail stores;
● To promote retailer as a company or institution with social responsibility;
● To develop credibility in the minds of public at large, about retailer’s image and
goals.

2. Advantages of Public Relation

The major advantages of a public relation effort are as follows:
● Enhancement of retailer’s image.
● A news item appearing in a well-known news channel or news paper carries high
credibility as well as publicity value due to its large coverage.
● There is no direct cost for the space or time provided for the said message.
● News items have better memorability as compared to paid ads.
● Customers create a favourable positioning of the store in their mind to suit their
perception about its offerings.

3. Disadvantages of Public Relation

There could be disadvantages too, which can be listed as follows;
● The effort required in organizing an event or sponsoring a worthwhile public event
is beyond the reach of many small to medium sized retailers, and they may find a
paid ad as a better alternative.
● The timing or placement of the message or its content is beyond the control of the
retailer.
● The fund requirement and planning for the public relation effort may not be suitable
for gaining quick and short term publicity, particularly for small to medium sized
retailers who are mainly concerned with short term goals.

4. Types of Public Relations (PR)

There are basically two types of PR that may occur – the planned PR and an unexpected
PR. While the planned PR is normally an enhancer of image, the unexpected PR could
be a damaging or distracting one depending on the type of coverage the event may
generate.
Planned PR is done with lot of planning and organizing activity, and strives to have wide
media coverage for the said event. For example coverage of social service event, donation
for a social cause, opening of a new store, launch of a new product, joint ventures etc.
are planned in a well-orchestrated manner.
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As the name suggest unexpected publicity occurs, without company’s knowledge or Managing Promotions
in Retail
wishes. For example an employee filing a case against company’s policies or mis-happen
like fire or accident in the store or its premises are covered by the media as per their
own coverage and wishes. The media may sometime have special coverage of an event
in a manner to create bad publicity for the retailer. The retailer may be rapped for its
environmental record or its unfair practices or an investigative report may reveal some
hidden secrets etc. Thus, many large format stores have a separate department to
constantly monitor its PR activities that can facilitate positive image for the retail chain.

6.2.3 Personal Selling

Personal selling is a one to one selling, or even one or more than one person selling to
one or more than one person. It involves oral communication and may make use of
audio-video facilities for improving presentation to customers. The level and type of
personal selling indulged by a retailer will depend upon the following factors:
● The image intended to be conveyed;
● The level of service inputs to be used in selling;
● The type of products sold;
● Interest in building long term relationship with customers.
For doing personal selling the sales person may either decide to do so in the store by
personally attending to customers visiting the store, or may visit the probable customer’s
home or their places of work, or do telemarketing.
1. Major Objectives of Personal Selling
The major objectives of personal selling are as follows:
● To gain customers confidence, and thereby be in a better position to persuade
customers in buying the merchandise in the store.
● To be available for sorting or answering any queries related to the merchandise on
sale.
● To do cross selling of items which are related to the basic purchases of merchandise.
● Ensure that the purchase transaction is completed in the smoothest manner, so as
to enhance customers’ satisfaction level.
● To make sure every aspect of customer service is well taken care of – right from
greeting the customer to ensuring the customer gets the merchandise well packed
before the customer leaves the billing counter after making the payment.
● Guide customer about loyalty program, if any.
● Create awareness about the services offered on Web, Mails, and Telemarketing; if
any.
2. Advantages of Personal Selling
The advantages of personal selling are as follow:
● A good sales person first understands customer’s needs and then suitably adapt
his/her message.
● The customer will be keen to spend time in the store if he is properly guided on the
merchandise offerings.
● A sales person can make changes in merchandise offerings based on the customer’s
requirement and concerns.
● There is an immediate feedback possibility, which helps in improvements on
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merchandise offerings or personal selling inputs.
Retail Operations and 3. Disadvantages of Personal Selling
Store Management-II
The disadvantages of personal selling are as follow:
● The cost of personal selling could be high – as every customer needs to be handled
by a well trained sales person for making best of the customers interest.
● Only limited number of customers can be attended to at a given point of time.
● Customers may tend to take affront to an aggressive sales person with too many
questions and interruptions.
● The negatives of a sales person’s behaviour may get rubbed on the retailer’s image.

4. Different Types of Personal Selling

There are mainly two types of personal selling efforts viz. a) Order taking, and b) Order
getting. We will discuss this in more detail.
i) Order taking: It involves routine clerical and sales activities. The sales person is
there because the retailer wants someone to take care of routine activities. It is
more common in self-service type of retail outlets. The sales person is involved in
setting up displays, ensuring stocks are replenished on shelves, answering routine
questions, maintaining house-keeping in the store, etc.
ii) Order getting: Ihis is the more challenging type of selling as the sales person is
involved in all major activities like informing and persuading the customer, and in
closing sales. Normally, order getting sales persons are better educated, better
skilled, well groomed, and better paid than the order taking sales person. These
kinds of sales persons are mainly required for selling premium merchandise, designer
fashion wears, electronic items, durables, furniture, real estates, autos, etc.
5. Functions Performed by a Sales Person: It would be helpful for students to
understand the various elements of activities performed by a sales person after the
customer is inside the store or when customer is contacted at home. Let us understand
these elements through the diagram given in Figure 6.2.

Figure 6.2: Personal selling activities

The sales person involved in personal selling must be necessarily enthusiastic,
knowledgeable, interested in customers, and a good communicator. Following are some
of the key reasons for losing retail sales and how one can avoid them as stated by
148 Berman B and Evans R J (10th Edn., 2008).
6. Selected reasons Why Retail Sales are Lost – and How to Avoid Them: Managing Promotions
in Retail
● Poor understanding of the customer – obtain information from the customer so the
sales presentation is properly tailored.
● Sales person not demonstrating the good or service – show the good or service in
use so that benefits are visualized.
● Failure to put feeling into the presentation – encourage sales people to be sincere
and consumer oriented.
● Poor knowledge – train salesperson to know the major advantages and
disadvantages of the goods or service, as well as competitors’ offerings and be
able to answer questions.
● Arguing with a customer – avoid arguments in handling customer objections, even
if the customer is wrong.
● No suggestion selling – attempt to sell related items (such as service contracts,
product supplies, and installation).
● Giving up too early – try again if an attempt to close a sale is unsuccessful.
● Inflexibility – be creative in offering alternative solutions to a customer’s needs.
● Poor follow-up – be sure that orders are correctly written, that deliveries arrive on
time, and that customers are satisfied.
6.2.4 Sales Promotion
Sales promotion covers all the paid communication activities that help in increasing
consumer purchases and encourage dealers to put in extra efforts in improving sales of
merchandise or service concerned. It includes displays, contests, sweepstakes, coupons,
frequent shopper programs, prizes, samples, demonstrations, referral gifts, and other
limited-time selling efforts other than advertising, public-relations, and personal selling
efforts.
During the 2011 Christmas period, Americans spent $36.4 billion online, according to
MasterCard Spending Pulse. The National Retail Foundation valued online Valentine’s
Day sales at $3 billion dollars in 2011. It is clear that holiday periods cause a spike in
consumer spending. As per the URL http://salesbumpblog.com/2011/07/plan-a-sales-
promotion-strategy-around-key-holiday-periods/ dated 15th Feb 2012, if you plan a sales
promotion strategy around key holidays, you can increase traffic to your website and
improve your online sales.
1. Food Works – Bottomless Pantry Promotion

Source: http://samsales.com.au/uploads/tx_dmfgalleria/foodworks.jpg
Figure 6.3: Sales Promotion example 149
Retail Operations and
Store Management-II
Food Works – Bottomless Pantry promotion

Background...
The FoodWorks retail group comprises of over 710 independent supermarkets. Each year the
group runs a series block - buster sales promotion to enhance their catalogue, regional TV
commercials, radio and print ads and point of purchase advertising.
The brief...
Design a theme for sales promotion with broad consumer appeal. Encourage customers to
make an expenditure of $20 or upwards and make repeat store visits during the promotion.
Execution...
SAM helped FoodWorks to devise manage the ‘Bottomless Pantry promotion’ which has run
several times due to the popularity of the promotion with retailers and customers.
For every $20 spent in a single transaction, FoodWorks customers received an entry form from
check out staff. Customers entered via a dedicated web entry portal, SMS or mail for a chance
to win the major prize of $13,000 in Foodworks vouchers, or secondary prizes that included a
$500 Foodworks and fuel vouchers in each state. The promotion advertised via catalogue,
radio, TV and point of purchase display.
Result...
Each time the FoodWorks ‘Bottomless Pantry promotion’ has run, over 37,000 customers have
entered during the month of the promotion and retailers have reported distinct sales spikes.
Footnote...
In tight economic times where inflation is a burden to the average householder, the allure of
cash, or prizes that are as good as cash, such as shopping vouchers is very strong. For
national promotions that target a broad ranging demographic mix, cash, or an equivalent, has
proven time and time again to be the most desirable prize.
Source: http://www.foodworks.com.au

2. Objectives of Sales Promotion

● Increase sales volume in the short-term.
● Improving and maintaining customer loyalty.
● To support and complement other promotional activities.
● To keep customers interested in making purchases at the store.
● To create focus on certain items, whose sales may be low, for improving its sales
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3. Advantages Managing Promotions
in Retail
● The promotional themes and tools helps create due importance and distinction for
certain merchandise.
● By proper displays and schemes, the retailer is able to create an eye-catching
appeal for the merchandise.
● It helps in improving store traffic and thereby its sales.
● It helps in promoting customer loyalty to the store.
● Promotes impulse purchasing.
● It helps in creating an environment of fun and excitement through contests and
product demonstrations.

4. Disadvantages
● Too much of any promotional feature may have a diminishing effect over a period
of time.
● If a store is on constant promotional gimmicks it position the store as a promotion
based outlet, thereby reducing its selling potential during non-promotional periods.
● Sales promotions may have only short term effect.
● It needs to be used as supplement to other promotional activities.
● The cost of sales promotional activities may bring down the store’s profitability, if
the desired sales results are not achieved.

5. Different types of sales promotions

The following Table 6.3 gives brief description about the major sales promotion types.
Table 6.3: Types of Sales Promotion

Type Description
Point-of-purchase In-store displays like counter display, floor display, window
display allow a retailer to remind customers and stimulate
impulse purchases. Sometimes the displays are provided
by the manufactures.
Contests Customers compete for prizes by participating in a contest,
like essay competition, a slogan, identifying winner of a
cricket match etc.
Sweepstakes This is like a lottery where the winner is selected randomly
among the entries or participants in a contest. Here no skill
is required.
Coupons Retailers give discount to shoppers if they present
coupons, which are provided as part of the advertisement
in newspapers or magazines. Customers are asked to
present the said coupons during their purchases of
merchandise from the store within a specified date.
Frequent shoppers program Customers get bonus points on purchase of every 100
rupees worth of merchandise, which can be redeemed on
accumulation of certain number of bonus points. This
scheme is of particular use for building customer loyalty
to the retail chain or store.
Prizes The customer gets a gift voucher or actual gifts on purchase
of minimum value of merchandise.

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Samples Free samples in case of food products are provided to
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customers or customer are allowed to taste the product or
use perfume sprays for getting a true feel of the product.

Demonstrations Actual demonstration of products like kitchen products,

cleaning liquids, ready to eat foods etc. Even services like
hair-dos, make-ups etc.
Referral gifts Gifts or coupons provided to customers who provide new
customer contacts or bring in new customers. Direct
marketers and service providers use this scheme quite
often.
Telephone diary, pens, These items are given as a means of creating goodwill,
calendars, shopping bags, etc. reminder, and loyalty. The items contain the name of the
retailer or its logo.
Special events It includes fashion shows, celebrity visits to store,
autograph session by a celebrity etc.
Source: Based on ‘Retail Management’, Berman Barry and Evans R Joel,Ch.19 pp 581 to 584,
Pearson Education Inc., New Delhi 2008.

Check Your Progress-A

1. Briefly comment on the following statements.
a) Marketing expenses is done to make optimum use of the available spend.
............................................................................................................
............................................................................................................
............................................................................................................
b) In a sharing arrangement there could be a vertical co-operative advertisement.
............................................................................................................
............................................................................................................
............................................................................................................
c) Manufacturers usually stress on key product attributes.
............................................................................................................
............................................................................................................
d) Advertiser has complete control over the content of the message.
............................................................................................................
............................................................................................................
2. Fill in the blanks with the appropriate word given in the brackets
a) The media advertising is normally very _________. (Cheap / Costly)
b) The aim of public relation is to promote a ___________ and favourable
image. (Positive / Negative)
c) Personal selling is a ____________ selling. (One to one / One to another)
3. State whether the following statements are True or False
a) Retail promotions have become a necessary part of the retail marketing
process.
b) Retailers usually stress on prices of products in advertisements.
c) Due to advertising, self-service operation is impossible.
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 Managing Promotions
6.3 PLANNING A RETAIL PROMOTIONAL STRATEGY in Retail

Promotional strategy is an important part in retailer’s strategic mix, and needs to be

used in a systematic planned manner to optimize on the output received from its
implementation. Any wrong timing or inappropriate use of the promotion type may only
result in net loss for the retailer from the execution of the promotion scheme.

Source: http://www.futureinq.com/blog/wp-content/uploads/2012/02/EOSS.jpg
Figure 6.4: Promotion Scheme
Let us study the process of planning retail promotional strategy in the next few sections.
The figure shown in Figure 6.5 depicts the process flow.

Determining promotional objectives

Establishing an overall promotional budget

Selecting the promotional mix

Implementing the promotional mix

Reviewing and revising the promotional plan

Source: Based on ‘Retail Management’, Berman Barry and Evans R Joel, Ch.19 pp 585 to 591,
Pearson Education Inc., New Delhi 2008.
Figure 6.5: Process of Retail promotional Strategy 153
Retail Operations and 6.3.1 Determining Promotional Objectives
Store Management-II
As per Mr. Chiplunkar R M, ‘Product Category Management’, , Ch 11 pp 233 – 234,
Tata McGraw Hill Education Pvt. Ltd., New Delhi 2010, the most common promotional
objectives are as follows:
● Increase the customer walk-ins or traffic
● Increase sales
● Increase profit
● Clear dead stocks
● Create brand or product awareness
● Induce trial for new products
● Establish awareness of the retail outlet/chain.
● Enhance customer relations
● Positive word of mouth publicity
Let us look at each of these objectives in detail:
i) Increase customer walk-ins or foot falls: Most of the retailers or mall
management feels that it is the walk-ins or foot falls that drive product sales. Thus
many gimmicks are used by retailer just to make the customer walk-in, so that
once the customer is inside the premises the salesman or the product display is
expected to do the trick. For driving customer traffic the retailer will have to create
sufficient excitement about the product on display by talking of some innovative
items, or a new collection, or about an event which may not be directly related to
the product but to some exciting happening like a fashion show or organization of
competition for the targeted audience, or visit of a celebrity and so on.
It needs to be understood that different product categories will react differently to
the events organized for improved walk-ins. For example product categories falling
under the “Impulse Type”, will generally have better sales as compared to the ones
which fall under the “Planned Purchase Type” when there are more walk-ins.
Generally for categories falling under planned purchase type, the higher walk-ins
result into better awareness of the product-range and price availability within the
store and create familiarity about the store for the customer who may come back
to the store when he has decided to make a purchase.
ii) Increase Sales: As we have learned from the above explanation generating walk-
ins itself may lead to more sales. Generally, sales are increased via two major
methods as follows:
● By increasing the number of bill transactions, i.e. more number of customers
buying the product. Or/And
● By increasing the average sales value per bill, or per customer. This is usually
done by increasing the basket size of consumer purchase.
iii) Increase Profit: Many retailers may think that increase in sales would bring in
more profit but that may not be the case. Generally increase in sales is derived by
offering some discounts to the customer or give-away rather throw-away price.,
which means cut in profit margin per unit for the retailer. Thus the retailer will
have to understand that to reach the higher gross profit figure now he will have to
sell much higher quantities as explained here below:

154
 Managing Promotions
Product Selling Cost per Gross Margin No of Gross Percent Percent in Retail
Category Price per Profit per- units Profit increase decrease
XYZ Unit per centage sold in quantity in
Unit over normal profita-
sales bility
Normal 100 50 50 50 50 2500 - -
Sales
Discount 80 50 30 37.5 60 2250 20 10
Sales

From the above analysis it is clear that just achieving increase in quantity is not enough
to meet the profitability target but the quantity increase has to be higher than the
percentage price reduction offered. Hence, in the above working the retailer must be
confident of increasing the quantity sales by at least 34% [ i.e. 2500 ÷ 37.5 = 66.6 ; (67
÷ 50) * 100 = 134% ] during promotion, if the retailer desires to achieve same level of
profitability as the normal sales or more than 34% increase in quantity if he wants to
improve on normal profitability target. Thus understanding of price sensitivity of the
product is very important in such cases.
iv) Clear Dead Stocks: In these cases since the retailer’s objective is to clear old or
non-movable stocks as these items are past the trend or in broken sizes etc. the
objective is only to get rid of them at a cost price or even below the cost price as
they eat into the important retail space or spoil the overall ambience of the store.
Since retailer is not concerned about making profit he may decide to sell such
items at an attractive offers or he may give them as free gifts on purchases of
certain value till the stock of such items last.
v) Create brand or product awareness: Generally when the retailer launches a
new brand or decides to re-launch the product with some new features he would
like to attract the target customers for which he may like to introduce special
introductory offers like price discounts on certain minimum buys or special gifts on
purchases and any other price benefit. Such a tactic helps the retailer to quickly
establish the new brand in the minds of the customers and infuse familiarity about
the same.
vi) Induce trial for new products: This objective can also be combined with the
above except that the intention here is more to generate trial than awareness only.
In order to generate product trial the retailer may try to offer very attractive price
offers or may provide the item along with some accompaniments as free gifts or at
a minimal price, which usually goes with the given product. The retailer may also
organize free demonstration if it’s a new concept along with special price discount
offers.
vii) Establish awareness of the retail outlet/chain: Generally a retailer who has
just begun its operation or who wants to create better awareness about the store
location may like to go in for such a tactic.

155
Retail Operations and
Store Management-II

Source: www.samsung.com
Figure 6.6: Promotional offers: Big Bazaar’s Dhamaka
The best way for creating awareness of a store location and generate more walk-ins is
to declare a BIG “Dhamaka” offer. Such an offer immediately takes the attention of the
target consumers who may be willing to travel extra miles for taking benefit of the said
offer. The Big Bazaar’s Dhamaka offers are quite well-known during the Independence
Day or the republic day which generates great excitement and enthusiasm among the
target public. Also the “Grand Exchange” offers of Big Bazaar are very much well-
known. All such promotional offers fall in this genre.

Source: www.futurebazaar.com
156 Figure 6.7: “Grand Exchange” offers of Big Bazaar
viii) Enhance customer relations: With innovative schemes that provide long term Managing Promotions
in Retail
benefits, retailer is able to create more satisfied customers who will tend to stick
with the retailer throughout their life. It is observed that Shopper’s stop with an
effective implementation of its retail loyalty program by the name of “First Citizen”
is able to garner almost 60 per cent of its overall sales. Thus, proper working out of
the schemes that create real term value for customers, retailer can not only maintain
existing customers happy but would also be able to generate new list of satisfied
customers. Loyalty programs of LFS retail chain is one of the biggest contributor
to this objective.
ix) Word of mouth publicity: For a retailer it is important to gain word of mouth
(WOM) publicity, as it comes free and have much more credibility among friends
and relatives of the customer. Further, such WOM may result into chain effect
thereby giving a very wide publicity to the retailer with a well-planned promotional
mix.

Source: http://blog.magnoninternational.com/online-word-of-mouth-marketing
Figure 6.8: Mouth publicity
Particularly for service retailers WOM carries a long term benefit. It must be understood
as the positive WOM gives a multiplier benefit in terms of addition of new customers
same way a negative WOM may have a crippling effect.

6.3.2 Preparation of Overall Promotional Budget

Retailer may use different methods for establishing overall budget for its promotional
activities. The most common ones are as follows;
i) Affordability: In this method the retailer may randomly decide about the budget
for promotion, which could be a one-time spending activity during a particular
season or festival. The budget decided is based on affordability for the retailer. For
example retailer may think that ‘Back to school’ may give major benefit in terms of
increase in sale of school products and may decide to give free gifts based on
purchase value for which he may make use of all affordable methods.
ii) Incremental method: Under this scheme the retailer may decide that in the
previous year if it had spent sat Rs 1 lac on promotional activities, then this year he
will spent 10 per cent more as compared to previous year. He may decide on 10
per cent because of expected increase in sales or due to increase in inflationary
trend. Again there is no logic or plan in the spending method. It is just a gut feeling
of the retailer.
iii) Parity with competition: In this method retailer may decide to spend on promotion
based on the promotion tactics used by its closest competitors. If the competitor
decides to have promotion during Christmas and New Year then the retailer too
would copy the scheme with some notional changes. Hence, the spending is purely
made from the point of protecting its customer base from shifting to the competition.
The retailer has only one aim, to protect its customer base and it just follow the
leader in its promotional strategy and spending, without any long term plans.
157
Retail Operations and iv) Percentage of sales method: Under this method retailer may decide on spending
Store Management-II
a certain percentage of the expected sales budget on the promotions. The percentage
of spending is based on the trend followed by other competitors or it could be what
is affordable for the retailer based on its net earnings. For many retailers the overall
promotion budgets range from 2 per cent to 10 per cent. It is used by all types of
retailers and is most common. Though it seems to be related with sales budget, it
may fail in targeting at the true objectives the retailer may have in mind from the
long term point of view. For example the retailer may decide on spending based on
its month to month sales, thereby losing on the benefit of leading sales during
weaker months/periods.
v) Objective and task method: This is not a common method, and is used mainly
by a large retail chain with long term vision. Under this method the retailer may
think that it needs to improve on the ‘top of the mind’ recall for the store, and may
target to achieve the same to the extent of 80 per cent of the population in the
trading area surrounding the store location. To achieve the said target the retailer
may decide on sub-objectives and the relevant tasks to achieve them with a time
line. Let us understand this with the help of a following example.
Table 6.4: Objective and Task Method

Sub-objective Task Cost

Build awareness among To release three full page ads in two women’s ` 300000
young women life-style magazines over three months period
Build awareness among Release two advertisements in business weekly
young executives and three ads in financial daily over three weeks’ ` 200000
time – of size 15x2 col cms.
Total ` 500000

The above method has a better focus and strategy, and would tend to give better result
to the retailer. Sometime the expenditure on promotions may not be within the desirable
norms (the deduction of expenses in the same year may result into losses for the retailer),
and the retailer may decide to amortize (spreading of expenses over the years) the
promotional expenses over a five year period, as the expenditure will be beneficial even
in the next few years’ time. This is a best method but needs better planning and in-depth
working on the part of the retailer to prioritize its goals and expenditure budgets for
reaching its desired goals.

6.3.3 Selecting the Promotional Mix

The different proportion of total expenditure to be done on various promotional activities
like advertising, public relations, personal selling, and sales promotion; so as to make up
the total expenditure amount, which is based on the promotional budget, is called the
promotional mix. For example a small retailer with a limited promotional budget of say
Rs 5 lacs may decide to use the 25% of the budget for sales promotion activities like
window and counter/floor displays, another 25% on gift vouchers, and balance 50% on
prizes/gifts. A large format store may use a mix of advertisement, sales promotion and
public relation by spending 50%, 30%, and 20% of the total budgeted amount, respectively.

158
 Managing Promotions
in Retail

Source: http://www.techsip.in/2011/12/14/tradus-in-does-a-ebay-in
Figure 6.9: Promotional Mix through Gift Vouchers
While, selecting promotional mix the retailer must keep in mind the hierarchy of effects
like building awareness, developing knowledge about the store, developing liking for the
store, then developing preference and conviction, thereby leading to purchase from the
store. For each of the effects a different kind of promotional mix may be necessary,
depending on the objective to be achieved.
Generally it is observed that Ads and public relations are useful to develop awareness;
while personal selling and sales promotion are useful in developing liking, preference,
and conviction, by way of changing consumers’ attitudes and stimulating desires to
purchase.
Let us look at some of the stores’ examples for understanding their preferred promotional
mix as given in Table 6.5.
Table 6.5: Preferred Promotional Mix of Different Retailers

Type of Retailer Advertising Public Relation Personal Selling Sales promotion

Small Apparel Hoardings, ads Not much in use Very important Window and
store in supplements, for fashion floor displays.
bus shelters, retailer, and Gift vouchers
local cinemas, there could be on purchases,
direct mail, direct incentives coupons, etc.
pamphlets, etc. to sales persons
on personal
targets.
Retail chain Ads in Very much Important, Window and
stores newspapers, TV, through incentives are floor displays.
Radio; direct organisation of given based on Gift vouchers
mails, special events, sales target for on purchases,
hoardings, schemes, the month or coupons,
magazines announcements week for a fashion shows,
etc. department. special events,
contests,
sweepstakes,
loyalty program,
etc.

159
Retail Operations and
Store Management-II Large Ads in local Important, used Important, Window and
department supplement of during some incentives are floor displays.
store newspapers, special events; based on Gift vouchers
hoardings, but counter/ on purchases,
Direct mail. opportunities department coupons,
are limited. sales targets. special events,
contests, small
gifts, loyalty
program, etc.

The promotion and hierarchy of effects has been very well presented by Barry Berman
and Joel r Evans (10th edn., 2008), through the following diagram 6.3.
Hierarchy of effects Behavioural objective Promotional mix for
each step

Figure 6.10: Promotion and Hierarchy Effects

6.3.4 Implementation of Promotional Mix

For implementing different promotional mix the retailer will need retail team with certain
specific expertise. The team with necessarily very good understanding of marketing
theory and practices, will need to make decision on selection of right promotional mix,
within each of the promotional element to select the appropriate vehicles or tools, message
contents, sales force, and the persons responsible for co-ordination of different promotional
activities, and finally the overall control of the team and its performance. For example,
for selecting the right print media under the advertising the retailer will need to put a
marketing team with good understanding of the different print media, their use in different
situations and purpose, methods of selection, etc.
Let us look at the activities involved for implementation of sales promotion schemes in
retail outlets, which is the most commonly used promotional element widely in use among
all types and formats of retailers in one way or the other.
Following steps will help in ensuring that the purpose of promotion scheme is achieved
as per the plan.
i) Promotional Calendar: First of all a well-planned promotional calendar specifying
month-wise promotion schemes will help us to plan the schemes well in advance
160 and identifying the timing of the schemes will put everyone in the line on alert. It is
 useful to map various schemes and objectives with various sales trends expected Managing Promotions
in Retail
during the year. There will be peak sales seasons and troughs in sales. Thus planning
schemes in a manner which will smooth out such troughs in the trend will help us to
maintain a regular flow of cash and also movement of goods.
ii) Implementation: The effectiveness of promotion schemes depend on how these
are implemented. It can be very well said that success of most of the promotion
schemes are determined by the level of detailing with which these are implemented.
Some of the important aspects of detailing are as follows:
a) Marketing Department: This department is the crucial department as it must do
all the important planning while deciding about the promotions in conjunction with
the category managers till their successful implementation in the desired manner.
Some of the important decisions the department needs to consider are as follows:
● Products to be promoted based on the goals of the management and the
problems that are encountered for a given category against the set targets.
● Vehicles to be used for promotion of the concerned products, i.e. the type of
promotions like whether a discount scheme or special bonus coupons or
product demonstration or free samples and so on.
● The type of advertising to be used for promoting the scheme – whether to
use the print media or outdoor media or indoor advertising and the sub-vehicles
within each of these based on the overall budgets being planned.
● Time of the year when scheduling a concerned promotion scheme would
give the appropriate result without cannibalizing the main selling period’s
profitability.
● The duration for which the concerned promotion scheme to be operated so
that it does not lose its luster and create boredom for the target consumers
thereby creating diminishing returns.
● For a particular category one needs to determine the frequency of promotion
schemes as it should not give the impression of round the year promotion,
particularly for well niche and branded products.
● Tie-ups with other product categories or cross merchandising within the same
category for gaining additional sales and promotional benefits need to be also
considered.
● Deciding on the correct locations for a given promotion scheme is also
important to avoid misfiring of the scheme. For e.g. giving free samples or
product demonstration where the product is well established may prove to be
waste of efforts.
b) Visual merchandising Department: This department needs to ensure that all the
point of sale materials like danglers, posters, pamphlets, and other display materials
are delivered well in time and displayed at strategic locations within the store. Also
to ensure that merchandise are displayed suitably to match with the scheme. For
e.g. if the scheme is for select items only or for certain price-range then such items
needs to be given suitable prominence to attract customers attention as well as
displayed/grouped in a manner that will make selection easier.
c) Store Operation: The store manager should ensure that all staffs are fully aware
about the scheme and the products for which this is applicable with all the nitty-
gritty. The merchandise is well stocked/displayed well in time as per the requirement
of the scheme and visual merchandising. All the visual merchandising material
including the point of sale materials are displayed as per visual merchandising
requirement. 161
Retail Operations and 6.3.5 Review and Revision of Promotional Schemes
Store Management-II
This is an important activity after the end of the concerned promotion scheme or before
planning of promotions in order to understand what worked in favor of the scheme and
what didn’t vis-à-vis the planned targets. It’s important to know the reasons for the
success or failure of the scheme and make suitable change in the scheme structure/
details or the scheme itself so as to match with the expected targets for the proposed
scheme. The targets should be specific in order to determine the success or failure of
the scheme.
Some of the questions need to be posed at the time of review are as follows:
● Did the promotion achieve the desired target in terms of sale or profitability or
traffic?
● Was it appropriate with the overall marketing strategy for the category?
● Did it support the category’s role? Did the target consumers respond as expected?
● Which products or items within the category responded to the concerned scheme
and their impact on the performance of the category or on other categories?
● Did it attract new class or segments of consumers?
● Which type of promotion created unfavorable brand image or eroded store’s
positioning?
● Did the promotion and the concurrent arrangements made favorable impact on the
consumers’ shopping experience?
● Did the scheme get affected due to wrong timing or duration or frequency or the
advertising support?
● What was the effect of the scheme on competition?
All the above questions should help the management to review the scheme in its right
perspective and help the management to make suitable changes to the scheme when it
is implemented next time.
The retailer during the review must be able to make final decision on the necessary
revisions necessary in the schemes and must make appropriate changes to the sales
targets and other objectives to be achieved at the end of the scheme.

6.4 LET US SUM UP

● Retail promotions have become a necessary part of the retail marketing process. It
is a process of communicating with customer with a specific purpose of informing,
persuading, and reminding the target customer on various aspects of the retail
objectives.
● The important elements of promotional mix are: advertising, personal selling, public
relations, and sales promotion.
● Advertising is a non-personal presentation – as a standard message is presented to
the total audience of the concerned medium, and not adapted to each individual
requirement. It is an out-of-store mass media – which include newspapers, radio,
TV, Web, and other mass channels – each having its own audience – which becomes
available to the advertiser on payment of the given space or time. It is not personal.
● The different medium in use as part of advertising are: Newspapers, Telephone
Directories, Yellow pages, Direct Mail, Radio, TV, World Wide Web, Transit, Outdoor,
magazines, Single-page Flyers, etc.
162
● Different types of advertisements in use are: Pioneer, competitive, Reminder, Managing Promotions
in Retail
Institutional, and Thanks –giving ads.
● The aim of public relation is to promote a positive and favourable image of the
retailer among the general public. The idea is to influence all the stakeholders at
large viz. customers, investors, government, channel members, employees and the
general public about the store’s image.
● There are basically two types of PR that may occur – the planned PR and an
unexpected PR. While the planned PR is normally an enhancer of image, the
unexpected PR could be a damaging or distracting one depending on the type of
coverage the event may generate.
● Personal selling is a one to one selling, or even one or more than one person selling
to one or more than one person. it involves oral communication and may make use
of audio-video facilities for improving presentation to customers.
● There are mainly two types of personal selling efforts viz. a) Order taking, and b)
Order getting.
● Sales promotion covers all the paid communication activities that help in increasing
consumer purchases and encourage dealers to put in extra efforts in improving
sales of merchandise or service concerned.
● Sales promotion includes displays, contests, sweepstakes, coupons, frequent shopper
programs, prizes, samples, demonstrations, referral gifts, and other limited-time
selling efforts other than advertising, public-relations, and personal selling efforts.
● Promotional strategy is an important part in retailer’s strategic mix, and needs to
be used in a systematic planned manner to optimize on the output received from its
implementation.
● Any wrong timing or inappropriate use of the promotion type may only result in net
loss for the retailer from the execution of the promotion scheme.
● The most common promotional objectives are as follows:
● Increase the customer walk-ins or traffic, Increase sales , Increase profit, Clear
dead stocks, Create brand or product awareness, Induce trial for new products,
Establish awareness of the retail outlet/chain, Enhance customer relations, and
Positive word of mouth publicity.
● Following steps will help in ensuring that the purpose of promotion scheme is
achieved as per the plan: Promotional Calendar: First of all a well-planned
promotional calendar specifying month-wise promotion schemes will help us to
plan the schemes well in advance and identifying the timing of the schemes will put
everyone in the line on alert. Implementation: The effectiveness of promotion
schemes depend on how these are implemented.

Check Your Progress-B

1. Briefly comment on the following statements.
a) Promotional strategy is an important part in retailer’s strategic mix.
............................................................................................................
............................................................................................................
............................................................................................................
............................................................................................................

163
Retail Operations and
Store Management-II b) Inappropriate use of the promotion type may only result in net loss.
............................................................................................................
............................................................................................................
............................................................................................................
c) Different product categories will react differently to the events.
............................................................................................................
............................................................................................................
............................................................................................................
2. Fill in the blanks with the appropriate word given in the brackets
a) All the ___________ merchandising material including the point of sale
materials. (Visual / Physical)
b) The retailer may decide on spending based on its _______________ sales.
(Month to month / Year to year)
c) _____________ in sales is derived by offering some discounts.
(Increase / Decrease)
3. State whether the following statements are True or False
a) Many retailers may think that increase in sales would bring in more profit.
b) For implementing different promotional mix the retailer will need retail team.
c) Sales promotion covers all the unpaid communications.

6.5 KEYWORDS
Promotion : It is not enough for a business to have good products
sold at attractive prices. To generate sales and profits,
the benefits of products have to be communicated to
customers. In marketing, this is commonly known as
“promotion”.
Advertising : Any paid form of non-personal communication of ideas
or products in the “prime media”: i.e. television,
newspapers, magazines, billboard posters, radio,
cinema etc. Advertising is intended to persuade and to
inform. The two basic aspects of advertising are the
message (what you want your communication to say)
and the medium (how you get your message across)
Telephone directories : In normal directory retailer gets free alphabetical listing,
People are not exposed to other competing retailers.
Yellow Pages : Listing is based on type-of-business, A customer
looking for certain products or service may refer it,
Widespread usage, Long shelf life.
Direct mail : Reaches to target audience. Tailored format,
Controlled costs, Quick feedback, Tie-ins with billing
firms.
164
Radio : Relatively low cost, good medium for car drivers and Managing Promotions
in Retail
small town population, Ability to segment population
as per programmes, Short lead time, Wide reach
TV : The dramatic effect of messages, Large market
coverage, Creativity, Program affiliation.
World Wide Web : Provide information about range availability and store
locations, People can order directly on company’s site,
Advertising on search engines, Other firm’s websites,
Provide customer service and communication facility.
Transit : Captive audience travelling on buses, trams, trains and
taxis, Mass market, High level of repetitiveness,
geographically defined markets.
Outdoor (bill boards) : Large size of the ads that can attract attention of the
passing public, Frequency of exposure, relatively low
cost, Assistance in directing new customers.
Magazines : Tailoring to specific markets, Creative options, Editorial
associations, Longevity of messages, Colour ads.
Public Relations : The aim of public relation is to promote a positive and
favourable image of the retailer among the general
public.
Personal Selling : Personal selling is a one to one selling, or even one or
more than one person selling to one or more than one
person. It involves oral communication and may make
use of audio-video facilities for improving presentation
to customers.
Sales Promotion : Sales promotion covers all the paid communication
activities that help in increasing consumer purchases
and encourage dealers to put in extra efforts in
improving sales of merchandise or service concerned.
Referral gifts : Gifts or coupons provided to customers who provide
new customer contacts or bring in new customers.
Direct marketers and service providers use this scheme
quite often.
Incremental method : Under this scheme the retailer may decide that in the
previous year if it had spent Rs. 1 lac on promotional
activities, then this year he will spent 10 per cent more
as compared to previous year.
Promotional Calendar : First of all a well-planned promotional calendar
specifying month-wise promotion schemes will help
us to plan the schemes well in advance and identifying
the timing of the schemes will put everyone in the line
on alert.
Store Operation : The store manager should ensure that all staffs are
fully aware about the scheme and the products for
which this is applicable with all the nitty-gritty.

165
Retail Operations and
Store Management-II 6.6 ANSWERS TO CHECK YOUR PROGRESS

Check Your Progress A

FIB
a) Cheap b) Positive c) one to one
T&F
a) True b) True c) False

Check Your Progress B

FIB
a) Visual b) Month to Month c) Increase
T&F
a) True b) True c) False

6.7 TERMINAL QUESTIONS

1. Which are the elements of promotional mix? Explain each of these elements briefly.
2. What are the advantages and disadvantages of advertisement?
3. Explain the merits de-merits of different advertising media.
4. Explain different types of advertising purpose and their emphasis.
5. What are the major purposes of public relation exercise? Explain the advantages
and disadvantages of the same.
6. Explain the major objectives od personal selling. What are the advantages and
disadvantages of personal selling?
7. Which are the sales promotion objectives? Explain the advantages and disadvantages
of the same.
8. Explain different types of sales promotion activities.
9. Explain promotional objectives briefly.
10. How does one go about in selection of promotional mix?
11. What steps need to be taken for implementation of promotional schemes?

6.8 FURTHER READINGS

Books
● Michael R. Solomon, Lisa D. Cornell, and Amit Nizan.” Launch! Advertising and
Promotion in Real Time” –– Flat world Knowledge Press.
● Rothenberg, Randall, Where the Suckers Moon: The Life and Death of an
Advertising Campaign, Random House Vintage Books: New York.
● Belch and Belch, “Advertising and Promotion”, 6th edition, 2010

Journals
● Attwood, K., 2007. Ladbrokes places bet on Spain with joint venture. The
Independent. [Published 9 January 2007]. Available from: http://
166 www.factiva.com. [cited 7 September 2007].
● Baig, E., 2007. iPhone’s fab, but Apple could make it even better. USA Today. Managing Promotions
in Retail
[Published 5 July 2007]. Available from: http://www.factiva.com. [cited 7
September 2007].
● Bales, C., Chatterjee, P., Gluck, F., Gogel, D. and Puri, A., 2000. The business
system: a new tool for strategy formulation and cost analysis. The McKinsey
Quarterly. Available from: http://www.mckinseyquarterly.com. [Cited 7
September 2007].
● Bingelli, U. and Pompeo, L., 2002. Hyped hopes for Europe’s low cost airlines. The
McKinsey Quarterly. 2002 (4), pp.87–97.
● Courtney, H., Kirkland, J. and Viguerie, P., 2000. Strategy under uncertainty. The
McKinsey Quarterly. Strategy Anthology, pp.81–90.
● Dahlstrom, P., Deprez, F. and Steil, O., 2004. Meeting the no-frills mobile
challenge. The McKinsey Quarterly. October 2004, pp.9–11.
● Dow Jones International News 2007. Emirates Plans To Double Airbus A380
Order To 110. [Published 8 September 2007]. Available from: http://
www.factiva.com. [cited 8 September 2007].
● Gluck, F., Kaufman, S. and Walleck, S., 2000. The evolution of strategic
management. The McKinsey Quarterly. Available from: http://
www.mckinseyquarterly.com. [cited 7 September 2007] .
● Koller, T., 1994. What is value-based management? The McKinsey Quarterly.
1994 (3), pp.87–101.
● McGonagle J. and Vella, C., 2002. A case for competitive intelligence. Information
Management Journal. [online]. 36 (4). Available from: http://www.factiva.com.
[cited 7 September 2007].
● Netmba.com 2007. Competitor analysis. www.netmba.com [Accessed: 6
September 2007].
● Stanley, B., 2006. China Cosco may offer a harbour if shipping runs into rough
seas. The Wall Street Journal Asia. [Published 11 July 2008]. Available from: http:/
/www.factiva.com. [cited 7 September 2007].

Websites and Online Resources

● Advertising Age www.adage.com
● Adweek www.adweek.com
● American Demographics (www.americandemographics.com
● Businessweek www.businessweek.com
● Mediaweek www.mediaweek.com
● Brandweek www.brandweek.com
● PROMO www.industryclick.com
● Sales and Marketing Management www.salesandmarketing.com
● http://catalog.flatworldknowledge.com/catalog/editions/p2145
● http://www.columbia.edu/~gvj1/adsylf06.pdf
● http://bvu-gdbachelorstudent.blogspot.in/2011/07/mk230-advertising-promotion-
syllabus.html

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Retail Operations and
Store Management-II Activity

Visit a hypermarket and find out how the advertiser influences the editorial content in
building products or retailer creditability.
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Note : These Terminal Questions/Check Your Progress/Activity will help you to

understand the unit better. Try to write answers for them. But do not submit
your answers to the University for Assessment. These are for your practice
only.

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