19 Chapter 19 Promotional Strategy

Administrative Items  CNTAE  Moodle Correction Chapter 19 today Chapter 18 p for Wednesday  Grades Retail Institutions Assignments available for pick-up tomorrow beginning at noon Moodle assignment submission – Wednesday optional Participation grades will be posted by Thursday, Nov. 28 Newswatch Assignment Grades available Mon. Dec 2

Planning a Retail Promotional Strategy

Promotion and the Hierarchy of Effects

Procedures for Setting a Promotional Budget  Affordability method  Incremental method  Percentage-of-sales method  Competitive parity method  Objective-and-task method Which is best? Why?

Advertising  Advertising is paid, nonpersonal communication transmitted through out-of-store mass media by an identified sponsor.  Retailers can use advertising to accomplish a number of objectives including: Providing information about goods and services and/or company attributes Reinforcing their image Lifting short term sales Easing the job of sales personnel  Of all advertising media, papers (weeklies, dailies, and shoppers) are the most preferred by retailers*

Advertising Advantages  Attracts a large audience  Low cost per contact  Control over message content; message can be standardized  Many media alternatives available  Gains pass along readership (for print) Advantages  Attracts a large audience  Low cost per contact  Control over message content; message can be standardized  Many media alternatives available  Gains pass along readership (for print) Disadvantages  Standardized messages lack flexibility  Geographic flexibility limited  Some media require large investments  Some media require long lead time  Some media have high throwaway rate  Some media limit the ability to provide detailed information Disadvantages  Standardized messages lack flexibility  Geographic flexibility limited  Some media require large investments  Some media require long lead time  Some media have high throwaway rate  Some media limit the ability to provide detailed information See also Table 19.2 Advertising Media Comparison Chart See also Table 19.2 Advertising Media Comparison Chart

Types of Advertising HarveysJoe Fresh Familiprix 1Familiprix 1 Reno-Depot 1IKEAReno-Depot 1IKEA Familiprix Reno-Depot 2 Sears Canada Holiday 2013 Sears 2013 Familiprix Reel

Retail circular support increases in US CPG

Canadian Tire Advertising  Canadian Tire is one of Canada's largest advertisers. Catalogue – used to communicate product information and drive traffic Flyers (circulars) – 90 % readership; distributed to 11 million households weekly to support catalogue objectives Television Television spring 2013 Television spring 2013

Canadian Tire TV Advertising  Canadian Tire used TV spokespeople in demo- mercials until Why did Canadian Tire drop the spokespeople?Why  Canadian Tire guy ranked the #1 most annoying person on TV in a poll conducted among readers of Globe and Mail TV column  "demo-mercials" were effective, but advertising wear-out "It was time for something new, something fresh, something different, and maybe something a little more light hearted," Canadian Tire's Lisa Gibson told CTV News.  The replacement: a series of no name couples using a more humourous, less in your face, sales approach. Source: CTV News, “Canadian Tire dumps know-it-all neighbour ads”, March 10, 2006www.ctv.ca  Although Canadian Tire guy ads were competitive in nature, there is a risk of negatively impacting the retailer’s image if they are not well perceived  This example illustrates the importance of market research and the truly integrated nature of retail strategy execution

Canadian Tire Institutional Advertising

Sales Promotion Sales promotion is used to generate immediate action and encompasses the paid communication activities other than advertising, public relations, and personal selling that stimulate consumer purchases and dealer effectiveness  Sales promotion includes point-of-purchase displays, coupons, contests, demonstrations and special events  Sales promotion is also said to include loyalty programs  As with all the other promotional tools, there are trade-offs with using sales promotion that must be balanced  Sales promotion is effective when used to generate consumer interest or excitement and is viewed as a complement to other tools Sales promotion is used to generate immediate action and encompasses the paid communication activities other than advertising, public relations, and personal selling that stimulate consumer purchases and dealer effectiveness  Sales promotion includes point-of-purchase displays, coupons, contests, demonstrations and special events  Sales promotion is also said to include loyalty programs  As with all the other promotional tools, there are trade-offs with using sales promotion that must be balanced  Sales promotion is effective when used to generate consumer interest or excitement and is viewed as a complement to other tools

Canadian Tire Sales Promotion  Coupons  Sweepstakes  Canadian Tire Money Debuted in 1958 Canada’s most popular loyalty rewards program with 90% redemption Has evolved to include Canadian Tire 'Money' On the Card™ New electronic loyalty program… Do you think loyalty programs are really sales promotions?

The Future of Retail Promotion  Greater Use of Social Media Greater Use of Social Media How?  Consumer Generated Media (CGM)  Smartphones and Location Based Promotion Smartphones Best Buy  Increased Engagement and Interactivity Zellers Festive finale