Professional Documents
Culture Documents
Promotional
Objectives
Long-term Short-term
Communication objectives are specific goals related to the retail communication mixs
effect on the customers decision-making process.
Determining
Promotional
Objectives
Increase sales Get leads for sales Popularize new Maintain customer
personnel stores and Web sites loyalty
Stimulate impulse and Present and reinforce Capitalize on Have consumers pass
reminder buying the retailer image manufacturer support along positive
information to
friends and others
Raise customer traffic Inform customers Enhance customer
about goods and relations
services
Long Term
Objectives
Marginal
Analysis
Affordable
Objective-and- Competitive Percentage-
Task Parity of-sales
Rule-of-thumb Method
Advertising Budget
The means for retailers to determine and control advertising costs and dividing them wisely among
merchandise lines.
Helps establish guidelines on how the retailer should spend it.
Marginal Analysis Method
Based on the economic principle that firms should increase communication expenditures
as long as each additional dollar spent generates more than a dollar of additional
contribution.
Refer to Exhibit 15-5: Marginal Analysis for Setting Diane Wests Communication Budget
(Textbook page 439)
Very hard to use because managers dont know the relationship between communication
expenses and sales.
BASIC Principle of Marginal Analysis
Increase Spending If the increased cost is less than the incremental (marginal)
return
Sets communication budget by determining what money is available after operating costs
and profits are budgeted.
Base their budgets on what they can afford.
Drawback: The affordable method assumes that the communication expenses dont
stimulate sales and profits.
Percentage-of-sales
Method
This communication budget is set so that the retailers share of communication expenses
equals its share of the market.
A retailers budget is raised or lowered based on the actions of competitors.
To compare its advertising spending with that of its competitors.
A business is aware of how much its competitors are spending to inform, persuade, and
remind the consumer of their products and services, then that business can, in order to
remain competitive, either spend more, the same, or less on its own advertising.
Drawback: This method (like the others) does not allow the retailer to exploit the unique
opportunities or problems they confront in a market.
Objective-and-task
Method
Establish Objectives
(create awareness of new product among 20 percent
of target market)
Type of product
Resource availability and the cost of each promotional tool /
available fund
Market size and concentration / products target market type of
consumer, no. of consumer, geographical location.
Customer information needs
Implementing the Promotional Mix
Choosing:
Specific media to use variety of elements, overall costs, efficiency,
lead time, editorial content.
The timing of promotion reach, frequency, massed promotion
effort, distributed promotion effort.
The content of messages written or spoken, personally or
impersonally delivered.
The makeup of the sales force qualification
Specific sales promotion tools
The responsibility for coordination
Reviewing and Revising the Promotional Plan