CHAPTER 11 COMMUNICATING THE PRODUCT OFFER

LEARNING OBJECTIVES An appreciation of the challenge associated with communicating a retail product offer Understand the role product-related communications play in achieving both short term and strategic objectives Explore the relationship between types of communication channel and promotional objectives Understand the need for stock management support when implementing promotions Introduce the concept of integrated retail communications Understand that retailer and supplier promotional objectives often conflict, but benefits can be gained through collaboration

RETAILER TO CUSTOMER COMMUNICATIONS The retail environment (see chapters 9 and 10) is an effective communication tool, but relies on customers being near or in outlet Communications need to be sent further afield in order to achieve objectives  long term, strategic, with more general aims  short term, tactical, with specific aims Communications need to support product management process and play an important role in reinforcing retailer’s market position

RETAIL COMMUNICATION CHANNELS: ADVERTISING Advantages:  Effective way to communicate product offers due to large ‘reach’  High impact  Targeted media vehicles can be chosen in line with retailer’s target customer Disadvantages:  retailer may not have national coverage (store and product)  difficult to portray extensive product range  high cost

AMBIENT ADVERTISING The placement of advertising in unexpected locations e.g. petrol pump, on floor in store Use of in-store digital communications and plasma screens has enabled and fostered interest in this channel  Advantages flexible high quality imaging message relayed close to purchase point

PRODUCT SPECIFIC PROMOTIONAL COMMUNICATIONS The product range itself is an effective arena for product specific messages concerning objectives such as  increasing sales of specific brand  encouraging customer to try or trade up  encouraging multiple purchases  counteract promotions of competitor  capitalise on seasonal sales Sales promotion is a term that covers this type of activity and is normally supported by point of sale/purchase materials

FIGURE 11.1 SALES PROMOTION ACTIVITY AND P.O.P. SUPPORT

PROMOTIONAL PRODUCT PLANNING Promotional activity to increase sales may be  offensive, planned into forecast and buying budget (see chapter 6): special offers  defensive, to bring sales back in line with forecast: reduced prices Promotional planning can involve:  co-ordination with media advertisements  additional space allocation  setting up POS materials and special displays

PROMOTIONAL PRODUCT PLANNING (2) A promotion that aims to increase sales needs to be supported with extra stock (unless clearing stock) or investment into promotional activity is wasted Efficient promotions (see ECR, chapter 3) are those that improve overall category performance, rather than transferring sales between brands Well supported promotions with clear consumer benefits will strengthen retail image Too many minor promotions that are not well supported may cause customer dissatisfaction and store ‘clutter’. Collaborative planning (see CPFR, chapter 7) enables retailers and supplier to run promotions for mutual gain

STRATEGIC PRODUCT COMMUNICATIONS Product ranges can be a vehicle for retailer- to-customer communications that achieve aims other than direct sales increase, such as  improving retail brand image  maintaining customer loyalty  improving public relations  providing interest and inspiration to customers  providing opportunity for good publicity Examples: cultural events, film releases, ‘ethical products’

PUBLICITY Publicity, like other strategic communications can be managed but it cannot be controlled as it is not directly paid for  can be positive or negative  is highly credible A pro-active public relations / media centre can help to  maximise positive publicity  minimise / counteract negative publicity  generate publicity for promotional events

PERSONAL COMMUNICATIONS Outlet space and sales personnel provide opportunities for direct personal communications Personal communications are important when retailer sells complex products Focused on personal selling, but in era of cross- format shopping, closing sale may be an inappropriate objective. Arming sales personnel with high level of product knowledge and training in sales technique will help them to match product features and benefits to customer needs and wants

COMMUNICATION THROUGH PACKAGING Packaging plays an important communications role in three ways  how the product is packed up when sold  how the product is presented to customer (especially food products)  provides vehicle for product information Packaging can communicate tangible and intangible product benefits

INTEGRATING PRODUCT- RELATED COMMUNICATIONS Communications work best if all channels are relaying consistent messages and the delivery of the messages is co-ordinated Examples of integrated retail communication activity  loyalty schemes  using paid for media to advertise sales promotion activity Corporate identity should be integrated with promotional communications

INTERNAL COMMUNICATIONS Retail product managers need to communicate product plans effectively to ensure proper implementation  product information, especially new / improved  product display  planned promotional activity Formalised and open product range feedback system is also part of internal communications

RETAILER-SUPPLIER ISSUES Supporting a supplier’s promotional activity can pose difficulty for retailer -  Different objectives: supplier wishes to improve their brand performance retailer wishes to improve category performance  Attitude to POS materials and space allocation: supplier will want in-store support and extra space retailer may not be willing to give more space and may consider POS to be clutter  Conflicting images  Non-compliance with agreed promotions

CO-OPERATIVE PROMOTIONAL CAMPAIGNS Benefits  pooling of resources should result in better campaigns  can give small retailer access to professional promotional material and an opportunity to create interest  good image associations  better co-ordination of timing of promotions  cost of promotional activity included in product cost prices

EVALUATION OF PRODUCT RELATED COMMUNICATIONS Specific promotional activity:  sales of specific product  endurance of sales uplift  sales of other products  overall profits (e.g. category) Strategic promotional activity:  overall sales  increased transaction levels  customer loyalty  improved retail brand image