48 terms

retailing chapter 11

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Terms in this set (...)

promotion
is a means that retailers use to bring traffic into their stores
5 basic types of promotion
1. advertising
2. sales promotion
3. social media
4. publicity
5. personal selling
advertising
is paid, non-personal communication through various media by business firms, nonprofit organizations, and individuals who are in some way identified in the advertising message and who hope to inform or persuade members of a particular audience; includes communication of products, services, institutions, and ideas
sales promotion
involves the use of media and non-media marketing pressure applied for a predetermined, limited period of time time to stimulate trial, increase consumer demand, or improve product availability
social media
term given to a host of electronic information technologies that enable and stimulate social interaction between humans
publicity
is non-paid-for communications of information about the company or product, generally in some media form
personal selling
involves face-to-face interaction with the consumer with the goal of selling the consumer merchandise or services
promotion decisions
relate to and must be integrated with other management decisions such as location, merchandise, credit, cash flow, building and fixtures, price, and customer service
primary trading area
is the geographic area where the retailer can serve customers in terms of convenience and accessibility better than the competition
secondary trading area
is the geographic area where the retailer can still be competitive despite a competitor having some locational advantage
promotional objectives
should ultimately seek to improve the retailer's financial performance
2 long term objectives
1. creating a positive store image
2. Public-service promotion
institutional advertising
is a type of advertising in which the retailer attempts to gain long-term benefits by promoting and selling the store itself rather than the merchandise in the store
2 short-term objectives
1. increasing patronage from existing customers
2. attracting new customers
promotional advertising
is a type of advertising in which the retailer attempts to increase short-term performance by using product availability or price as a selling point
interdependence
promotional objectives often established to improve either long or short-term financial performance, each is likely to also benefit the other
7 steps in a retailer's advertising campaign
1. selecting advertising objectives
2. budgeting for the campaign
3. allocating budgeted dollars
4. designing the message
5. selecting the media to use
6. scheduling of advertisements
7. evaluating the results
affordable method
is a technique for budgeting advertising in which all the money a retailer can afford to spend on advertising in a given time period becomes the advertising budget
percentage-of-sales method
is a technique for budgeting in which the retailer targets a specific percentage of forecasted sales as the advertising budget
task-and-objective method
is a technique for budgeting in which the retailer establishes its advertising objectives and then determines the advertising tasks that need to be performed to achieve those objectives
vertical cooperative advertising
occurs when the retailer and other channel members (usually manufacturers) share the advertising budget. Usually the manufacturer subsidizes some of the retailer's advertising that features the manufacturer's brands
horizontal cooperative advertising
occurs when two or more retailers band together to share the cost of advertising usually in the form of a joint promotion of an event event or sale that would benefit both parties
allocating budget dollars with a gross margin percentage of 20%
1. Dollar sales needed to support $1 in advertising= (1/.2)=$5.00
2. advertising elasticity= 2.0
3. Dollar sales generated from $1 in advertising= $2.00
allocating budget dollars with a gross margin percentage of 40%
1. Dollar sales needed to support $1 in advertising= (1/.4)=$2.50
2. advertising elasticity= 4.0
3. Dollar sales generated from $1 in advertising= $4.00
allocating budget dollars with a gross margin percentage of 50%
1. Dollar sales needed to support $1 in advertising= (1/.5)=$2.00
2. advertising elasticity= 6.0
3. Dollar sales generated from $1 in advertising= $6.00
allocating budget dollars with a gross margin percentage of 75%
1. Dollar sales needed to support $1 in advertising= (1/.75)
2. advertising elasticity= 8.0
3. Dollar sales generated from $1 in advertising= $8.00
sales displacement
occurs when consumers purchase and stockpile advertised brands during a promotional period and any gains in sales are later offset by sales reductions from average during subsequent non-promotional periods
substitution effect
happens when advertising of a particular branded product during a promotional period reduces the current and future demand for competitive brands
retail advertisements must accomplish three goals
1. attract and retain attention; that is, they must be able to break through the competitive clutter
2. achieve the objective of the advertising strategy
3. avoid errors, especially legal ones
coverage
is the theoretical maximum number of consumers in the retailer's target market that can be reached by a medium and not the number actually reached
reach
is the actual total number of target customers who come into contact with an advertising message
cumulative reach
is the reach that is achieved over a period of time
frequency
is the average number of times each person who is reached is exposed to an advertisement during a given time period
cost-per-thousand (CPM)
is a technique used to evaluate advertisements in different media based on cost. The cost per thousand is the cost of the advertisement dived by the number of people viewing it which is then multiplied by a thousand
impact
refers to how strong an impression an advertisement makes and how well it ultimately leads to a purchase
advertising effectiveness
is the extent to which the advertising has produced the result desired
advertising efficiency
is concerned with whether the advertising result was achieved with the minimum financial expenditure
2 types of sales promotion
1. Sole-sponsored sales promotions
2. Jointly sponsored sales promotions
3 types of Sole-sponsored sales promotions
1. Premiums
2. contests and sweepstakes
3. loyalty programs
Premiums
are extra items offered to the customer when purchasing promoted products
contests and sweepstakes
are sales promotion techniques in which customers have a chance of winning a special prize based on entering a contest in which the entrant competes with others, or a sweepstakes in which all entrants have an equal chance of winning a prize
loyalty programs
are a form of sales promotion programs in which buyers are rewarded with special rewards, which other shoppers are not offered, for purchasing often from the retailer
3 types of Jointly sponsored sales promotions
1. coupons
2. in-store displays
3. demonstrations and sampling
coupons
are a sales promotion tool in which the shopper is offered a price discount on a specific item if the retailer is presented with the appropriate coupon at time of purchase
in-store displays
are promotional fixtures of displays that seek to generate traffic, highlight individual items, and encourage impulse buying
endcaps
the display of products placed at the end of an aisle in a store
register racks
the racks placed near the checkout to encourage impulse buying
demonstrations and sampling
are in-store presentations with the intent of reducing the consumer's perceived risk of purchasing a product