Communication is an integral part of the retailer’s marketing strategy. Primarily, communication is used to inform the customers about the retailer, the merchandise and the services. It also serves as a tool for building the store image. Retail communication has moved on from the time when the retailer alone communicated with the consumers. Today, consumers can communicate or reach the organizations. Examples of this include toll free numbers, which retailers provide for customer complaints and queries. Another example is the section called Contact Us on the websites of many companies.
It is believed that every brand contact delivers an impression that can strengthen or weaken the customer view of the company. The retailer can use various platforms / channels for communication. The most common tools are:
2) Sales Promotion
3) Public Relations
4) Personal Selling
5) Direct Marketing
The tools are illustrated in Figure below
Retail Communication Mix >>
Sales promotion>> Advertising >> Direct marketing>> Personal Selling >> Public Relations
Let us now examine each of these tools in detail:
Advertising can be defined as any paid form of non-personal presentation and communication through mass media. It is popularly believed that one of the main aims of advertising is to sell to a wide mix of consumers and also to induce repeat purchases. However, a retailer may use advertising to achieve any of the following objectives:
1) Creating awareness about a product or store
2) Communicate information in order to create a specific image in the customer’s mind in terms of the store merchandise price quality benefits etc.
3) Create a desire to want a product.
4) To communicate the store’s policy on various issues.
5) Help to identify the store with nationally advertised brands.
6) Help in repositioning the store in the mind of the consumer.
7) To increase sales of specific categories or to generate short term cash flow – by way of a sale, bargain days, midnight madness etc.
8) Help reinforce the retailer’s corporate identity.
The retailers for advertising may use any one or a combination oft the following mediums:
1) Press advertisements
2) Posters and leaflets, brochures booklets
3) Point of purchase displays
4) Advertising can also be done through mediums like radio, television, outdoor hoardings and the internet.
Determining the Advertising / Promotional budget
While there is no definite formula for determining the advertising or the overall promotion budget the following are the main methods that may be employed to determine the advertising budget. ‘
The percentage of Sales method:
This is perhaps the most commonly used method for determining the budget. Here, the budget is a fixed percentage of sales. The biggest advantage of this method is that it is simple to apply and it allows he retailer to set an affordable limit on promotional activity. This method however, takes little consideration of the market conditions of any special advertising needs.
The Competitive Parity Method
Here the budget is based on the estimated amount spent by the competition. There is risk that it could be based on wrong information and again there is little consideration for market conditions or growth opportunities.
The research approach or the Task and objective Method
The budget is determines on the basis of a study of the best forms of advertising media and the costs of each. The retailer formulates advertising goals and then defines the tasks necessary to accomplish these goals. Next, the management determines the cost for each task and adds up the total to arrive at the required budget. Here, he advertising expenses are linked to the retailer’s objectives and the effectiveness of some forms of advertising can be measured and compared to costs.
The incremental Method
The budget is simply based on the previous expenditure.
What can be afforded?
The budget allocated for advertising or for promotion is based on the basis of the money that can be allocated by the retailer for this purpose.
While determining which method s to be adopted, a retailer needs to take into consideration the market that the firm is operating in , its current market position and how important advertising is in that market.