Retail Marketing & Advertising

In Indian retailing the current marketing challenges are in two major areas: Creating footfalls in the store. Converting browsers into buyers.Creating footfalls in the store starts with building the store brand, positioning the store, profiling target customers and understanding their buying behaviour, defining the retail marketing mix, creating customer relationship and loyalty, and direct marketing, effectively planning and implementing store events and promotions.Micromarketing is a significant marketing strategy as it totally focuses on the target consumer.Building the store Brand: The store brand is built on such parameters as merchandise category, price/quality, specific attributes of benefits, lifestyle/activity, etc. It is essential to select and define the target market to comprehensively define the brand proposition to the consumer.For instance the brand Shoppers Stop signifies a one-stop shot for lifestyle garments and, its Feel the Experience While You Shop theme conveys that it stands for fee access and experiential shopping.

The name Big Bazaar itself tells the consumer what the brand is about: very large, with diverse and genuinely value for money merchandise.STORE POSITIONINGStore positioning is not what you do to the store; its what you do to the mind of the customer! A store can be exciting to its customers with its merchandise, its range of services, service delivery standards, ambience and convenience. An expensive, unfriendly and even repulsive store create a negative positioning that is hard to shake off. Retail stores could position themselves in the minds of their customers on various platforms derived from the retail mix. The most common ones are merchandise and related attributes such as category and range distinction, price, store design and ambience, customer service and related processes. Factors like convenience of location or fashion trends are also used to position a retail store.

Barista is positioned for a new experience in the store environment. It is creating a unique positioning whereby the consumer owns the store.Its slogan: It is not in the coffee business, serving people, but it is in the people business, serving coffee!Planet M is positioned as the music store of the universe. It strongly believes in propagating and selling both popular and niche genres of music an unmatched width of offerings in the right depth.Will Sport, the trendy retail store selling an exciting range of leisure wear, is positioned as the store where the customer would enjoy the change.

Positioning Objectives for Retailing Merchandise category e.g. Arcus interiors & building related, Big Bazaar food.

Price / quality e.g. Walmart low prices Wills lifestyle premium apparel

Specific attribute / benefit e.g.In&Out convenience

Lifestyle e.g. Shahnaz Hussain beauty saloons

RETAIL MARKETING MIXThe retail marketing mix consists of the following elements:(1)Product Offerings: This refers to the product mix that the store retails for customers after a careful study of what their needs and wants are.By matching customer preferences with an assortment of merchandise offered within the stores categories, the retailer gets an ideal basket size per customer. The basket size contains the mix of items a customer buys during a visit.(2)Place: This is the location of the store and its catchment boundaries. The key to optimizing the element of place in the marketing mix is to undertake local marketing efforts besides the national marketing plan.(3)Price: Price is an important element in the marketing mix as customers are very price-sensitive.

Retail Objectives & PricingMarket penetrationMarket skimming To increase customer traffic To clear seasonal merchandise Match competitors price Price leadership status Create entry barriers Encourage repeat buying

Retail Pricing Approaches and other Elements of the Retail Marketing

Retail marketing mix variablePrice below market pricePrice at market pricePrice above market priceLocationNo parking, poor layout, inaccessibleCentral business district, proximity to competitionMonopoly, compatible location to target segmentService AttributesSelf-service, limited offerings, no salesSupport from sales peoplePersonalized attention to customers, home delivery, exchange facility, customized offeringsAssortmentLimited varietyMediumExtensive assortmentStore EnvironmentPoor quality fixtures, limited space to move around, wall shelves, untidyCompatible store environmentInviting, impressive store dcor, visual merchandise attractive

External Influences on Pricing StrategyPricing strategyCustomersCompetitorsSuppliersGovernment

Retail Pricing Elements

Retail objectives-Sales (Rs / $)-Profit (Rs. / $ / %)-ROI

Dependent variables-Target market-Retail image-Retail mix-Pricing policy

Pricing orientation-Demand based-Cost based-Competitive-Integrated

Retail Pricing (contd) Pricing strategies-Customary pricing-Variable pricing-Flexible pricing-One price policy-Price lining-ODD pricing-Multiple unit pricing-Bundling-Leader pricePrice adjustments-Mark UPS-Mark downs

Pricing strategies

Customary pricing retailer sets price & seeks to maintain those prices over an extended period. Prices that customers can take for granted & stable.

Variable pricing when differences in demand & cost necessitate a change, with a view to increase demand, off season discount.

Flexible pricing offering same products & quantities to different customers at different prices.

Price lining retailers establish specified number of price points for each merchandise type & retailers purchase goods to fit the price points makes price comparisons easier can help store to upgrade / down grade customer s preference.

Pricing Strategies (contd)Multiple unit pricingPrice of each unit in a multiple pack is less than the price of each unit if it were sold individually.

Suitable for products with high consumption rates.

Price bundling is the reduced price offered for a bundle or a predefined group of merchandise when bought together by the customer.Maximum retail price (MRP) on items generally means full pricing.Promotional pricing involves a temporary reduction in the price to the customer during a particular season, while closing a particular line, or to clear saleable defectives and shop-soiled merchandise.Odd pricing is the way footwear organizations like Bata price their products in India at levels like Rs. 129.95, 149.95 etc.

Leader pricing

When a high demand item is priced low & is heavily advertised to attract customers into the store.Loss leader pricing Where an item is sold below cost to build traffic & encourage purchase of other items.Everyday low pricing (EDLP), which is not a familiar concept in India, is pricing different kinds of merchandise on a lower scale everyday. If pricing is innovative and exclusive to the identity of the store, offering the right value to the buyer, it will bring in more and more customers and help the retailer to retain them as well. but not the lowest.

Cost oriented pricingMarkup pricing.a retailer sets prices by adding per unit merchandise costs, retail operating expenses & desired profit. The difference between the merchandise cost and selling price is the markup.

Item cost Rs.20 ; it sells for Rs.25Markup is Rs.5 or 25% of the cost or 20% on selling priceMargin is Rs.5 or 20% of the selling price

(4)Promotions and Events: most retail organizations run promotions during festival seasons like Diwali, Christmas, New Year, Velentines Day, Id, and so on.(5)People: There are two kinds of people as far as the retail marketing mix is concerned: People to Serve (customers) and People that Serve (employees).It is customers who determine whether the retail store is selling the right products and services. People that serve the organization are the ambassadors or the face of the retail store.(6)Presentation: Presentation is the way products and services are grouped and presented in a retail store.

Retail Promotion MixMeans by which retailers bring traffic into their stores & it includes advertising, sales promotion, publicity & personal selling.

Retailers use a combination of location, price levels, displays, merchandise assortments, customer service & promotion as a means to generate store traffic sales.

Retail Promotion Mix Broad objective beingBring traffic into the storeMove the traffic to various selling areas of the storeEntice customers into purchasing. ImpersonalPersonalUnpaidPaid

Advertising; sales promotion; store atmosphere; visual merchandisingPersonal sellingPublicityWord of Mouth

CUSTOMER RELATIONSHIP MANAGEMENTCustomer Defined Relationship: Organizations define their relationship with the customer based on the frequency with which he or she uses the organizations services or the quantum of his purchases.It is sometimes defined by awarding colourful cards to the customers Blue, Silver, Gold, Platinum, etc.DIRECT MARKETINGDirect marketing enables retailers to establish personal contact with the customer. The retailers can then have a database of buyers along with their buying occasions and preferences thus ensuring that they can have effective and timely communication directly with consumers.It also provides a key differentiating factor: along with the information direct marketing will ensure efficient communication that will persuade customers to respond instantaneously.

(1)Direct Mail: This generally has two forms. One is well-designed with proper copy and layout while the other is a simple letter to the customer conveying the required information. Mailers are generally attractive and inviting to read, with highlights of offers and promotions.(2)Catalogues and Mail Order: These are not so common in India. We are yet to come across an Indian retailer in a brick-and-mortar format who does direct marketing by way of catalogues and mail order.(3)Telemarketing: A few retailers in India also make telemarketing efforts too along with their brick-and-mortar operations. They use call centres that perhaps handle more queries and responses than proactive marketing.(4)Electronic Retailing: This is yet to take off in a big way. Right now there are a few brick-and-mortar retailers dealing in books and music who sell merchandise through their internet sites as well.

MICROMARKETING IN RETAILINGContemporary marketing in most organized retail establishments in India are generally thematic or tactical. For consumers, the buying process has two stages: choosing a store, followed by a brand. Thematic initiatives communicate what the retail store stands for, trying to put forth the positioning idea/platform on which it is built say, on the platform of sheer experience or on multi-brand convenience in order to entice customers into stepping into the store (to generate the required footfalls). Tactical efforts aim to convert browsers into buyers.Shoppers Stop, for instance, has positioned its store on the experience platform.Subhiksha in the south relies on the less than MRP platform.Pantaloons on family culture and value.While Bata has chosen quality footwear at affordable prices.

Types of Direct MarketingDirect MailCatalogues & Mail OrderTelemarketingElectronic RetailingDifferent Types of Communication in Direct Marketing

What is Micromarketing?Micromarketing hits the bulls eye of the target customer. It has a narrow marketing focus and has two forms.One uses the data captured on the customer to analyse his visit patterns and buying behaviour, to carry a marketing message that is tailored specifically to him.The second aims to tailor the product/services mix more closely aligned to the needs and preferences of customers.ADVERTISING IN RETAILINGAdvertising in retailing, like FMCG sales, involves both above-the-line (media) and below-the-line communication.(a)Point of sale (POS) advertising(b)Sales promotion (explained as part of the marketing mix)(c)Publicity(d)Personal selling

What is Micromarketing?Micromarketing hits the bulls eye of the target customer. It has a narrow marketing focus and has two forms.One uses the data captured on the customer to analyse his visit patterns and buying behaviour, to carry a marketing message that is tailored specifically to him.The second aims to tailor the product/services mix more closely aligned to the needs and preferences of customers.ADVERTISING IN RETAILINGAdvertising in retailing, like FMCG sales, involves both above-the-line (media) and below-the-line communication.(a)Point of sale (POS) advertising(b)Sales promotion (explained as part of the marketing mix)(c)Publicity(d)Personal selling

Factors Influencing Advertising Age of store-New stores or those seeking to be re-build image need advertising.

Store location-Stores that are poorly located need more advertising.

Merchandise-Those selling high-image / fashion goods need advertising than a discount / convenience store

Supplier support-The more support a retailer is able to get from suppliers, the more it can advertise.

POS Advertising: This is more relevant to the retail stores communication strategy than above-the-line media communication. It is an interesting point that the point of sale itself forms a communication medium as advertising can be done with the store.POS advertising is in the form of materials and activities. POS materials include festoons, buntings and posters that can be used within the retail premises. POS activities consist of displays, visual merchandising, display contests, shelf-on-hire (SOH) for brands, etc.POS advertising is very cost-effective and addresses the right target customers as they come into the store itself.There are separate places within the store earmarked for in-store branding and signage effectively used for advertising within the store.Sales Promotion: Sales promotions are done with special communication and displays. It uses copy similar to those used in media advertising and other props and materials so that it immediately attracts the customers attention when he or she enters the store.

Sales promotion need not necessarily involve price-offs every time.The promotion may be for a new product line or a new category that has hit the shop-shelves by way of displays and special product corners.For instance, the bookshop Crossword has a special sales promotion podium for the latest arrivals with sections like bestsellers, recommended reading etc. Sales promotion communication takes place by shelf-talkers thematically designed for the promotion. The theme is extended even to the uniforms that store sales personnel wear.Publicity: Publicity is the non-paid advertising mileage that the retail organization gets through free write-ups in media about the stores latest arrivals, sales promotions or any event that the store or brand has organized to achieve its sales objectives.New store launches get a great deal of publicity by way of television interviews of the CEO, interviews on FM radio channels, and interviews and write-ups in the press.

Most organized retailers employ PR agencies as retainers.Innovation and exclusive programmes are generally accorded the greatest media hype by public relations.Personal Selling: Sales and service personnel in the retail organization are its ambassadors, and communicate the value proposition of the entire store.

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