1. Sales Promotion - Week #4 Retail Sales Promotion Review: To Whom am I Selling? Retail Sales Promotion Quiz on Chapter 3 Present Target Profiles and Features & Benefits to Class Meet one-on-one, continue working on projects

2. Understanding Consumers: Demographics “Hard” data such as: –Age –Gender –Race –Level of Education –Income –Marital status

3. Understanding Consumers: Psychographics Emotional, stylistic, opinions –Activities (hobbies, sports, etc.) –Price consciousness –Lifestyles –Patterns of usage (how much/how often do you buy?)

4. Consumer Groups “Catch-all” groups that represent average sets of demographics and psychographics Example: Young Contemporary –Fashion emulation, not leadership –Clothes as self-expression –Quality not important –Shop ‘til they drop Demographics and psychographics of the Young Contemporary group?

5. Target Profiles – Positioning Statement+ Detailed profiles of your typical consumers. (Sample) Natural Products Consumer: –Age: 35 –Sex: Female –Household Income: $80K –Married: Yes –Typical stores: Whole Foods, Trader Joe’s –Status: Rising –Price conscious: Somewhat –Magazines: Martha Stewart –Consumer Group: Classic

6. Retail Sales Promotion Why Promote? –Awareness –Interest –Desire –Action External Factors –Seasons –Holidays –Events –Sales Cycle –Competition Other Factors –Historical Factors –Sales Goals –Flavor of the Week

7. Benefits of Promotion Control and anticipate –Sales –Expenses Control inventory Project image

8. Considerations: Desired Image Name Logo Style Features and Benefits –Product –Store Price Points

9. Considerations: Reach and Cost Reach –Who will see it Cost –What it will cost –CPM: Cost per thousand Examples –Superbowl: $2.4-2.5 Million for 2006 30-sec.

10. Other considerations Coordination –The story of this course –All elements must support each other! Creativity –Deliver the message in an engaging way –Must stand out We see thousands of messages every day

11. Budgeting Sales Promotion Appropriation –The amount of money spent on sales promotion –Typically 1.5% - 6% of net sales Top-to-Bottom Method –Overall budget is created and allocated to various divisions Bottom-to-Top Method –Promotional funding is determined by each division All-you-can-afford –Based on other limitations/needs Today’s Reality: A combination

12. Other Promotional Costs Payroll Supplies Postage & Printing Travel Miscellaneous

13. Planning the Calendar Promotion Schedule

14. Planning the Calendar: Needs A list of national holidays & local events Last year’s calendar Historical sales and promotion expenses

15. Planning the Calendar: Create the Budget Monthly sales goals –Use last year’s sales as guide Needed promotion –As percentage of Sales Goals –Other factors Reserve budget –10-20% Allocation –Divided among various activities –Don’t forget other expenses

16. Planning the Calendar: The Calendar! Use the allocation to determine: –Media buys –Displays –Events –Etc. Create daily plan

17. Case Study: Country Junction Furniture Gifts Home Decor Building Materials Lawn & Garden Seasonal Hardware & Tools Pets & Pet Supplies Flooring Rental Equipment Kitchen & Bath Paint Center

18. Country Junction 2002 Calendar of Events January 5-20: Storewide Sidewalk Sale March 23&24 Pictures with the Easter Bunny March 23: Free Easter Egg Hunt March 29 & 30: Free Easter Egg Hunts, Pictures with the Easter Bunny May 4: Flea Market –Open Sat & Sun through Sept. 14 May 22: Lobster Feast (private party by invitation only for top 500 customers) May 27: Happy Memorial Day! OPEN 9- 5 July 4: Happy Independence Day! OPEN 9-5 September 2: Happy Labor Day! OPEN 9-5 September 15: Annual Yard sale September 22: Car Show Sept 28-Oct 31: The Great Pocono Pumpkin Festival September 28: Fright Night October 4&5: Fright Night October 11&12: Fright Night October 18&19: Fright Night October 25&26: Fright Night November 9: Annual Public Auction November 23: Santa Claus Arrives! Pictures with Santa 11-4 Nov. 23&24: Pictures with Santa 11-4 Nov 29&30: Pictures with Santa 11-4 Dec 1,7,8,15,16 Pictures with Santa 11-4 Dec 22 & 23 Pictures with Santa 11-4 December 24: Christmas Eve Close at 3pm

19. Drawbacks of Promotion Variability is painful! –Inconsistent ordering/production –Train customers to wait for sales –Extra expenses (e.g. overtime) can be high –Customers may go to competition Retail Promotion is a Slippery Slope!

20. Solution: EDLP Every Day Low Price –Walmart –Trader Joe’s –Warehouse Clubs Reduce Variability Train customers –Shop anytime –Build trust

21. Price Protection Same item advertised at lower price –Within 30 days –Bring in ad –Receive difference Often with a 10% bonus Retailers can “cheat”! –Similar models with different numbers

22. Automatic Price Protection They look for other ads Automatically send you a check!

23. APP Followup Tweeter was committed to APP In 2002, reconsidered –They had reimbursed $780,000 –5% of consumers used regular PP (RPP) –Under RPP, would have reimbursed $48,000! –Plus, many people didn’t understand APP Or care?! Ended APP program Used same money for other promotion

24. Break

25. Video: Buy-ology

26. Product Presentations Product Name/Description Market Positioning Target Profiles Features vs. Benefits

27. HOMEWORK: Read Chapter 4 (Advertising Department) Refine: –Product concept/description. –Product Name –Positioning statement –3-5 Target Profiles –Features vs. Benefits –Logo References –Finish Logo

28. Preview of Next Week Project Review –Show me what you’ve done –Must be up to date See previous slide Packaging