Retail Marketing &

Advertising

In Indian retailing the current marketing challenges are in two major

areas:

Creating footfalls in the store.

Converting browsers into buyers.

Creating footfalls in the store starts with building the store

brand, positioning the store, profiling target customers and
understanding their buying behaviour, defining the retail
marketing mix, creating customer relationship and loyalty,
and direct marketing, effectively planning and implementing
store events and promotions.
Micromarketing is a significant marketing strategy as it totally focuses
on the target consumer.
Building the store Brand: The store brand is built on such
parameters as merchandise category, price/quality, specific attributes
of benefits, lifestyle/activity, etc. It is essential to select and define
the target market to comprehensively define the brand proposition to
the consumer.
For instance the brand Shoppers Stop signifies a one-stop shot for
lifestyle garments and, its Feel the Experience While You Shop theme
conveys that it stands for fee access and experiential shopping.

The name Big Bazaar itself tells the consumer what the brand
is about: very large, with diverse and genuinely value for
money merchandise.
STORE POSITIONING
Store positioning is not what you do to the store; its
what you do to the mind of the customer!
A store can be exciting to its customers with its
merchandise, its range of services, service delivery standards,
ambience and convenience. An expensive, unfriendly and even
repulsive store create a negative positioning that is hard to
shake off.

Retail stores could position themselves in the minds of their

customers on various platforms derived from the retail mix.
The most common ones are merchandise and related
attributes such as category and range distinction, price, store
design and ambience, customer service and related processes.

Factors like convenience of location or fashion trends are

also used to position a retail store.

Barista is positioned for a new experience in the store

environment. It is creating a unique positioning whereby the
consumer owns the store.
Its slogan: It is not in the coffee business, serving people, but it is
in the people business, serving coffee!
Planet M is positioned as the music store of the universe. It
strongly believes in propagating and selling both popular and
niche genres of music an unmatched width of offerings in the
right depth.
Will Sport, the trendy retail store selling an exciting range of
leisure wear, is positioned as the store where the customer would
enjoy the change.

Positioning Objectives for

Retailing

Merchandise category e.g.

Price / quality e.g.

Walmart low prices

Wills lifestyle premium apparel

Specific attribute / benefit e.g.

Arcus interiors & building related,

Big Bazaar food.

In&Out convenience

Lifestyle e.g.

Shahnaz Hussain beauty saloons

RETAIL MARKETING MIX

The retail marketing mix consists of the following elements:
(1)
Product Offerings: This refers to the product mix that
the store retails for customers after a careful study of what
their needs and wants are.
By matching customer preferences with an assortment of
merchandise offered within the stores categories, the retailer
gets an ideal basket size per customer. The basket size
contains the mix of items a customer buys during a visit.
(2)Place: This is the location of the store and its catchment
boundaries. The key to optimizing the element of place in the
marketing mix is to undertake local marketing efforts besides
the national marketing plan.
(3)
Price: Price is an important element in the marketing
mix as customers are very price-sensitive.

Retail Objectives & Pricing

A.

Market penetration
Market skimming

B.

To increase customer traffic

To clear seasonal merchandise
Match competitors price
Price leadership status
Create entry barriers
Encourage repeat buying

Retail Pricing Approaches and other

Elements of the Retail Marketing
Retail marketing
mix variable

Price below market

price

Price at market
price

Price above market

price

Location

No parking, poor
layout, inaccessible

Central business
district, proximity
to competition

Monopoly,
compatible location
to target segment

Service Attributes

Self-service, limited
offerings, no sales

Support from
sales people

Personalized
attention to
customers, home
delivery, exchange
facility, customized
offerings

Assortment

Limited variety

Medium

Extensive
assortment

Store
Environment

Poor quality fixtures, Compatible store

limited space to
environment
move around, wall
shelves, untidy

Inviting, impressive
store dcor, visual
merchandise
attractive

External Influences on Pricing

Strategy
Competitors

Suppliers

Pricing
strategy

Customers

Government

Retail Pricing Elements

Retail objectives
Sales (Rs / $)
Profit (Rs. / $ / %)
ROI

Dependent variables
Target market
Retail image
Retail mix
Pricing policy

Pricing orientation
Demand based
Cost based
Competitive
Integrated

Retail Pricing

(contd)

Pricing strategies
-

Customary pricing

Variable pricing

Flexible pricing

One price policy

Price lining

ODD pricing

Multiple unit pricing

Bundling

Leader price

Price adjustments
-

Mark UPS

Mark downs

Pricing strategies
Customary pricing retailer sets price & seeks to maintain those
prices over an extended period. Prices that customers can take
for granted & stable.

Variable pricing when differences in demand & cost

necessitate a change, with a view to increase demand, off season
discount.

Flexible pricing offering same products & quantities to different

customers at different prices.

Price lining retailers establish specified number of price points

for each merchandise type & retailers purchase goods to fit the
price points
makes price comparisons easier
can help store to upgrade / down grade customer s preference.

Pricing Strategies

(contd)

Multiple unit pricing

Price of each unit in a multiple pack is less than the price of each
unit if it were sold individually.

Suitable for products with high consumption rates.

Price bundling is the reduced price offered for a bundle or a

predefined group of merchandise when bought together by
the customer.
Maximum retail price (MRP) on items generally means full pricing.
Promotional pricing involves a temporary reduction in the price to
the customer during a particular season, while closing a particular
line, or to clear saleable defectives and shop-soiled merchandise.
Odd pricing is the way footwear organizations like Bata price their
products in India at levels like Rs. 129.95, 149.95 etc.

Leader pricing
When a high demand item is priced low & is
heavily advertised to attract customers into the
store.

Loss leader pricing

Where an item is sold below

cost to build traffic & encourage purchase of other items.
Everyday low pricing (EDLP), which is not a familiar
concept in India, is pricing different kinds of merchandise
on a lower scale everyday. If pricing is innovative and
exclusive to the identity of the store, offering the right
value to the buyer, it will bring in more and more
customers and help the retailer to retain them as well. but
not the lowest.

Cost oriented pricing

Markup

pricing.a retailer sets prices by adding

per unit merchandise costs, retail operating
expenses & desired profit. The difference
between the merchandise cost and selling price
is the markup.

- Item cost Rs.20 ; it sells for Rs.25

- Markup is Rs.5 or 25% of the cost or 20% on selling price
- Margin is Rs.5 or 20% of the selling price

(4)
Promotions and Events: most retail organizations
run promotions during festival seasons like Diwali, Christmas,
New Year, Velentines Day, Id, and so on.
(5)
People: There are two kinds of people as far as the
retail marketing mix is concerned: People to Serve
(customers) and People that Serve (employees).
It is customers who determine whether the retail store is
selling the right products and services. People that serve the
organization are the ambassadors or the face of the retail
store.
(6)
Presentation: Presentation is the way products and
services are grouped and presented in a retail store.

Retail Promotion Mix

Means by which retailers bring traffic into their
stores & it includes advertising, sales promotion,
publicity & personal selling.
Retailers use a combination of location, price
levels, displays, merchandise assortments,
customer service & promotion as a means to
generate store traffic sales.

Retail Promotion Mix

Broad objective being

Bring traffic into the store

Move the traffic to various selling areas of the store
Entice customers into purchasing.

Paid

Unpaid

Advertising; sales
promotion; store
atmosphere; visual
merchandising

Personal selling

Publicity

Word of Mouth

Impersonal

Personal

CUSTOMER RELATIONSHIP MANAGEMENT

Customer Defined Relationship: Organizations define their
relationship with the customer based on the frequency with which
he or she uses the organizations services or the quantum of his
purchases.
It is sometimes defined by awarding colourful cards to the
customers Blue, Silver, Gold, Platinum, etc.
DIRECT MARKETING
Direct marketing enables retailers to establish personal contact
with the customer. The retailers can then have a database of
buyers along with their buying occasions and preferences thus
ensuring that they can have effective and timely communication
directly with consumers.
It also provides a key differentiating factor: along with the
information direct marketing will ensure efficient communication
that will persuade customers to respond instantaneously.

(1)
Direct Mail: This generally has two forms. One is welldesigned with proper copy and layout while the other is a
simple letter to the customer conveying the required
information. Mailers are generally attractive and inviting to
read, with highlights of offers and promotions.
(2)
Catalogues and Mail Order: These are not so
common in India. We are yet to come across an Indian retailer
in a brick-and-mortar format who does direct marketing by
way of catalogues and mail order.
(3)
Telemarketing: A few retailers in India also make
telemarketing efforts too along with their brick-and-mortar
operations. They use call centres that perhaps handle more
queries and responses than proactive marketing.
(4)
Electronic Retailing: This is yet to take off in a big
way. Right now there are a few brick-and-mortar retailers
dealing in books and music who sell merchandise through
their internet sites as well.

MICROMARKETING IN RETAILING
Contemporary
marketing
in
most
organized
retail
establishments in India are generally thematic or tactical. For
consumers, the buying process has two stages: choosing a
store, followed by a brand. Thematic initiatives communicate
what the retail store stands for, trying to put forth the
positioning idea/platform on which it is built say, on the
platform of sheer experience or on multi-brand convenience
in order to entice customers into stepping into the store (to
generate the required footfalls). Tactical efforts aim to convert
browsers into buyers.
Shoppers Stop, for instance, has positioned its store on the
experience platform.
Subhiksha in the south relies on the less than MRP platform.
Pantaloons on family culture and value.
While Bata has chosen quality footwear at affordable prices.

Direct Mail

Types of
Direct
Marketing

Catalogues & Mail Order

Telemarketing
Electronic Retailing

Different Types of Communication in Direct Marketing

What is Micromarketing?
Micromarketing hits the bulls eye of the target customer. It has
a narrow marketing focus and has two forms.
One uses the data captured on the customer to analyse his visit
patterns and buying behaviour, to carry a marketing message
that is tailored specifically to him.
The second aims to tailor the product/services mix more closely
aligned to the needs and preferences of customers.
ADVERTISING IN RETAILING
Advertising in retailing, like FMCG sales, involves both abovethe-line (media) and below-the-line communication.
(a)

Point of sale (POS) advertising

(b)
mix)

Sales promotion (explained as part of the marketing

(c)

Publicity

(d)

Personal selling

What is Micromarketing?
Micromarketing hits the bulls eye of the target customer. It has
a narrow marketing focus and has two forms.
One uses the data captured on the customer to analyse his visit
patterns and buying behaviour, to carry a marketing message
that is tailored specifically to him.
The second aims to tailor the product/services mix more closely
aligned to the needs and preferences of customers.
ADVERTISING IN RETAILING
Advertising in retailing, like FMCG sales, involves both abovethe-line (media) and below-the-line communication.
(a)

Point of sale (POS) advertising

(b)
mix)

Sales promotion (explained as part of the marketing

(c)

Publicity

(d)

Personal selling

Factors Influencing Advertising

Age of store
- New stores or those seeking to be re-build image need
advertising.

Store location
- Stores that are poorly located need more advertising.

Merchandise
- Those selling high-image / fashion goods need
advertising than a discount / convenience store

Supplier support
- The more support a retailer is able to get from suppliers,
the more
it can advertise.

POS Advertising: This is more relevant to the retail stores

communication strategy than above-the-line media communication.
It is an interesting point that the point of sale itself forms a
communication medium as advertising can be done with the store.
POS advertising is in the form of materials and activities. POS
materials include festoons, buntings and posters that can be used
within the retail premises.
POS activities consist of displays, visual merchandising, display
contests, shelf-on-hire (SOH) for brands, etc.
POS advertising is very cost-effective and addresses the right target
customers as they come into the store itself.
There are separate places within the store earmarked for in-store
branding and signage effectively used for advertising within the
store.
Sales Promotion: Sales promotions are done with
communication and displays. It uses copy similar to those
media advertising and other props and materials so
immediately attracts the customers attention when he
enters the store.

special
used in
that it
or she

Sales promotion need not necessarily involve price-offs every time.

The promotion may be for a new product line or a new category
that has hit the shop-shelves by way of displays and special
product corners.
For instance, the bookshop Crossword has a special sales
promotion podium for the latest arrivals with sections like
bestsellers,
recommended reading etc. Sales promotion
communication takes place by shelf-talkers thematically designed
for the promotion.
The theme is extended even to the uniforms that store sales
personnel wear.
Publicity: Publicity is the non-paid advertising mileage that the
retail organization gets through free write-ups in media about the
stores latest arrivals, sales promotions or any event that the store
or brand has organized to achieve its sales objectives.
New store launches get a great deal of publicity by way of
television interviews of the CEO, interviews on FM radio channels,
and interviews and write-ups in the press.

Most organized retailers employ PR agencies as retainers.

Innovation and exclusive programmes are generally accorded
the greatest media hype by public relations.
Personal Selling: Sales and service personnel in the retail
organization are its ambassadors, and communicate the value
proposition of the entire store.