Download 3. Retail Communication Mix

KIJECBM/ OCT- DEC2014/VOL-1/ISS-4/A7
ISSN:2348-4969
KAAV INTERNATIONAL JOURNAL OF ECONOMICS , COMMERCE
& BUSINESS MANAGEMENT
COMMUNICATION IN RETAILING- A STRATEGIC TOOL FOR
EFFICIENCY & EFFECTIVENESS IN RETAIL INDUSTRY
Mr. Kavish Sharma*1
1
Asstt. Professor, Deptt. of Management,
Shree Ganpati Institute of Technology,
(Affiliated to U.P.T.U., Lucknow)
Uttar Pradesh
India
Abstract:
Retail means selling the product or service to the end users or consumers for direct consumption.
General store, super market, specialty store, mall, doctor’s clinic and beauty parlor etc these are
examples of retail .In retail effective communication is required to attract customer and to
increase defined as a transfer of ideas, emotions, and thoughts from one person to another person
to get expected he sale. Communication response. Communication in retail business includes
listening skill, team communication, oral communication, nonverbal communication, handling
difficult customer interactions, feedback skill. Verbal communication means the communication
where the words are used. Nonverbal communication means communication without words but
using nonverbal cues. Retailer’s conscious use of these communication skills can foster positive
relationship between retailer and customer. As retailing is a people oriented business and job of
retailer requires that he has to be in constant contact with customer. Communication skills
important in retail job in all selling and buying are listening, team communication, oral
communication, nonverbal, handling difficult customer interactions and feedback skills. This
paper examines how the communication depicts its role to improve the efficiency &
effectiveness of the retail sector. Further, this portrays the importance & challenges in
communication in retail sector.
Key words: Retail communication, communication mix, communication skills etc.
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Communication in Retailing- A Strategic Tool for Efficiency & Effectiveness
in Retail Industry
1. Introduction
In India the vast middle class and its almost untapped retail industry are the key attractive forces
for global retail giants wanting to enter into newer markets, which in turn will help the India
Retail Industry to grow faster. Indian retail is expected to grow 25 per cent annually. Modern
retail in India could be worth US$ 175-200 billion by 2016. The Food Retail Industry in India
dominates the shopping basket. The Mobile phone Retail Industry in India is already a US$ 16.7
billion business, growing at over 20 per cent per year. The future of the India Retail Industry
looks promising with the growing of the market, with the government policies becoming more
favorable and the emerging technologies facilitating operations. The word retail is derived from
the French word retailer, means to cut off a piece or to break bulk. Therefore, a retailer is a
dealer or trader who sells goods in small quantities. Retailing is the final step in the distribution
of products, for consumption by the end consumers. It consists of all activities involved in the
marketing of goods and services directly to the consumers, for their personal, family or
household use. This excludes direct interface between the manufacturer and institutional buyers
such as government and other bulk customers. Retail is India’s largest industry. The sector has
witnessed an immense growth in the last few years. The key factors responsible for the retail
boom have been the change in consumer profile and demographics, increase in the number of
international brands available in the Indian market, economic implications of the government,
increasing urbanization, credit availability, improvement in the infrastructure, increasing
investments in technology and real estate building a world class shopping environment for the
consumers.The retail marketing concept is the acceptance by the retailer that it is the “customer”
and not “demand” that lie at the core of the retail organization. The retail marketing concept is a
philosophy, not a system of retailing or retail structure. It is founded on the belief that profitable
retailing and satisfactory returns on investment can only be achieved by identifying, anticipating
and satisfying customer needs and desires. It is an attitude of mind that places the customer at the
very centre of retailing activities.
2. Retail Communication
Communication Mix
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Communication Mix is the range of approaches and expressions of a marketing idea developed
with the hope that it be effective in conveying the ideas to the diverse population of people who
receive it. It is designed to achieve a variety of objectives for the retailer, such as building a
brand image of the retailer in the customer's mind, increasing sales and store traffic, providing
information about the retailer's location and offering, and announcing special activities. Retailers
communicate with customers through various means. These elements in the communication mix
must be coordinated so customers have a clear, distinct image of the retailer and not be confused
by conflicting information. Many retailers use rules of thumb to determine the size of the
promotion budget. Marginal analysis, the most appropriate method for determining how much
must be spent to accomplish the retailer's objectives, should be used to determine whether the
level of spending maximizes the profits that could be generated by the communication mix.
3. Retail Communication Mix
A communication program can be designed to achieve a variety of objectives for the retailer,
such as building a brand image of the retailer in the customer's mind, increasing sales and store
traffic, providing information about the retailer's location and offering, and announcing special
activities. Retailers communicate with customers through advertising, sales promotions, store
atmosphere, Web sites, salespeople, e-mail, direct mail, m-commerce, community building,
publicity, and word of mouth. These elements in the communication mix must be coordinated so
customers have a clear, distinct image of the retailer and are not confused by conflicting
information. Many retailers use rules of thumb to determine the size of the promotion budget.
Marginal analysis, the most appropriate method for determining how much must be spent to
accomplish the retailer's objectives, should be used to determine whether the level of spending
maximizes the profits that could be generated by the communication mix.
The largest portion of a retailer's communication budget is typically spent on advertising and
sales promotions. A wide array of media can be used for advertising. Each medium has its pros
and cons. For example, newspaper advertising is effective for announcing sales, whereas TV ads
are useful for developing an image. Sales promotions and m-commerce are typically used to
achieve short-term objectives, such as increasing store traffic over a weekend. Personal selling,
community building, and word of mouth through social shopping activities help achieve more
long-term goals and customer loyalty. Publicity and word of mouth are typically low-cost
communications, but they are very difficult for retailers to control. Communication is an integral
part of the retailer’s marketing strategy. Primarily, communication is used to inform the
customers about the retailer, the merchandise and the services. It also serves as a tool for
building the store image. Retail communication has moved on from the time when the retailer
alone communicated with the consumers. Today, consumers can communicate or reach the
organizations. Examples of this include toll free numbers, which retailers provide for customer
complaints and queries. Another example is the section called Contact Us on the websites of
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many companies it is believed that every brand contact delivers an impression that can
strengthen or weaken the customer view of the company.
The main elements that make up the promotions/communications mix in Retail
Communication are:
 PAID IMPERSONAL COMMUNICATION
(a) Advertising
It is an Effective medium for creating awareness and interest. Low control over response:
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Television
Cinema
Radio
Directories
Packaging
Hoardings/Posters
Magazines
Catalogues
Brochures
Internet
Advertising can be defined as any paid form of non-personal presentation and communication
through mass media. It is popularly believed that one of the main aims of advertising is to sell to
a wide mix of consumers and also to induce repeat purchases.
However, a retailer may use advertising to achieve any of the following
objectives:
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Creating awareness about a product or store
Communicate information in order to create a specific image in the customer’s mind in
terms of the store merchandise price quality benefits etc.
Create a desire to want a product.
To communicate the store’s policy on various issues.
Help to identify the store with nationally advertised brands.
Help in repositioning the store in the mind of the consumer.
To increase sales of specific categories or to generate short term cash flow – by way of a
sale, bargain days, midnight madness etc.
Help reinforce the retailer’s corporate identity.
(b) Determining the Advertising / Promotional budget
While there is no definite formula for determining the advertising or the overall promotion
budget the following are the main methods that may be employed to determine the advertising
budget. ‘
(c) The percentage of Sales method:
This is perhaps the most commonly used method for determining the budget. Here, the budget is
a fixed percentage of sales. The biggest advantage of this method is that it is simple to apply and
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it allows he retailer to set an affordable limit on promotional activity. This method however,
takes little consideration of the market conditions of any special advertising needs.
(d) The Competitive Parity Method
Here the budget is based on the estimated amount spent by the competition. There is risk that it
could be based on wrong information and again there is little consideration for market conditions
or growth opportunities.
(e)The research approach or the Task and objective Method
The budget is determines on the basis of a study of the best forms of advertising media and the
costs of each. The retailer formulates advertising goals and then defines the tasks necessary to
accomplish these goals. Next, the management determines the cost for each task and adds up the
total to arrive at the required budget. Here, he advertising expenses are linked to the retailer’s
objectives and the effectiveness of some forms of advertising can be measured and compared to
costs.
(f)The Incremental Method
The budget is simply based on the previous expenditure. The budget allocated for advertising or
for promotion is based on the basis of the money that can be allocated by the retailer for this
purpose.
While determining which method s to be adopted, a retailer needs to take into consideration the
market that the firm is operating in , its current market position and how important advertising is
in that market.
(g) Sales Promotion
Effective medium for creating awareness, interest and credibility. Money-off coupons
free gift Samples are the examples of sales promotion.
(h) Store Atmosphere
The combination of the store’s physical characteristics (architecture, layout, signs and displays,
colors, lighting, temperature, sounds, smells) together create an image in the customers’ mind
(i)Retailers’ Community Building Websites
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It offer opportunities for customers with similar interests to learn about products and services
that support their hobbies and share information with others
4. PAID PERSONAL COMMUNICATION
(a)Personal selling
In this salespeople satisfy needs through face to face exchange of information. Effective
medium for influencing all stages of the decision making process, especially the decision to buy.
High level of control. Good for small businesses with local markets complex products and
services.
(b) Direct Mail
Mail
E-mail
CD-ROMS
5. UNPAID IMPERSONAL COMMUNICATION
(a) Publicity
It is communication through significant unpaid presentations about the retailer, usually a news
story, in impersonal media. Effective medium for creating awareness, interest and credibility.
Little control. Publicity can be highly credible if it is well thought - out and it is extremely cheap.
A feature in a paper, magazine sometimes seem more credible to readers than ads BUT it is
restricted by editorial decisions by the media source used
6. UNPAID PERSONAL COMMUNICATION
(a) Word of Mouth
Effective medium for creating interest and desire for your product or service and it is extremely
cheap & produce followings results:
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Give excellent service and produce good quality
Pay attention to packaging
Give customers something to pass onto friends such as business cards
Give customers incentive to bring new customers e.g. special discounts
Become part of local community activities
Team up with other local businesses and pass customers between you
7. Steps to develop a Communications Program.
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Identify target audience.
Determine Promotion Objectives.
Set Promotion Budget.
Decide on Suitable Time-Span.
Design the Message.
Decide on Promotion Mix and Allocate Budget.
Carry out Promotion Plan.
Measure and Analyze Results.
8. Identify Target Audience
Market research and market segmentation will help to identify the audience for your product or
service. Information on how large the audience is, where they are located and hopefully some
idea of their needs, attitudes and preferences and the benefits they require from your product or
service.
(a) Determine Promotion Objectives
The objectives of the promotion mix must be:
Realistic, Attainable, Attributable. Measurable:
 Specific goals related to the retail communication mix’s effect on the customer’s decisionmaking process
 Long-term: creating or altering a retailer’s brand image
 Short-term: increasing store traffic
(b) Determine Promotion Budget
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Allocate your budget wisely; money spent on a bad promotion is worse than spending no money
on promotion. You must also be able to justify this cost in your business plan.
(c) Decide on Suitable Time Span
A decision must be reached on the time scale of the Promotion campaign. This will depend on
the objectives of the campaign, the medium used and the allocated budget. The timing of the
campaign is also important e.g. advertising fireworks in January!
(d) Decide on Message
The message and the medium used to convey that message will be affected by the type of
product/service, the cost, legislation, what the competition is doing etc. Most importantly, it will
be affected by the desired response from the consumer and the stage in the buying process that
needs to be influenced.
The “AIDAS” model can illustrate this buying process:
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Attention
Interest
Desire
Action
Satisfaction
Ideally the message should get the attention of the consumer and take them through the stages
until a purchase is made and satisfaction reached. In practice few messages take a consumer
through the whole process, but are pitched at a certain level that meets the promotion objective.
The message content should include a unique selling proposition (USP), i.e. a benefit,
motivation, identification etc. that appeals to the audience. This appeal could be: -
Rational - appeals to audience's self interest. Show that product produces claimed benefits
such as quality, economy, value, e.g. car ads.
Emotional - stir up a positive/negative emotion that will motivate purchase, e.g. Andrex
puppies.
Moral - directed to the audience's sense of what is right, e.g. support for social causes.
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The message format should be strong in order to catch the attention of the audience. The
message format depends on the promotional medium used. For printed ads, careful decision for
headline illustration, color etc. For personal selling, decision as to choice of words, portfolio,
dress, body language.
9. Promotion Mix
Each promotional element has a different communication capacity, is effective at different stages
in the buying process and we have a different level of control over each one. Therefore the
decision for choice of promotion mix will depend upon:
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Target audience
Objectives
Timing
stage of product life cycle
complexity of product
competition
legal restraints
Monetary restraints etc.
(a) Carry out a promotion Plan
A pre planned promotion should be done so that it is able to attract consumers and is successful.
Various methods for promotion can be adopted. Such As- advertising, sales promotion, personal
selling, e-mail, direct mail etc
(b)Measure and Analyze Results
It is important to measure in some way the effectiveness of your promotion campaign.
Measuring and analyzing the outcome of the promotion campaign will help in the development
of future campaigns. It may be that you need to change the medium used or the time - span etc,
of the next promotion campaign.
10. Retail Communication Forms:
Most retail stores have established many forms of Communication to assist customers even prior
to trekking to the store. These systems include a web site, email, fax, online shopping, automated
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attendant, custom call routing (CCR) and enhance the customer experience. After all, the
ultimate goal is too quickly and efficiently services the needs of the customer while maximizing
a return.
11. Challenges in Retail Communication:Due to modernization and globalization Communication in retail is facing following challenges:
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Analyze and priorities product information and relate it to customer.
Knowledge of high-tech communication capabilities.
Ability to understand and appreciate customer sensitiveness.
Skills to analyze and handle difficult sale situation.
Ability to handle difficult customer reaction.
Inter cultural communication competence.
12. Importance of communication for retail professional:In addition to the product knowledge and sales efficiency, effective communication with
customer result in Increased sales.
 Better customer relationship.
 Steadier work flow to improve gain ability.
 To add value in numerous ways.
 Foster work teams.
 Get feedback.
 Positive attitude.
 Motivation. Cooperation in organization.
 Business customer and maintenance of good professional relation.
13. Communication and promotion through the new media:
New/unmeasured media such as the web, email, blog, video, other social media, and mobile
continue grow in usage and popularity, but not much is known about their effectiveness, making
allocation to such media an important but challenging task. The media mix for its major brands
now includes greater allocation to in-store (shopper marketing), the Internet, and other
unmeasured media.
14. Conclusion:
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To conclude, Communication skills in retail should be learnt by the retailer to make it effective
communication so that customer can trust retailer. Communication is two way process.
Communication cycle results maximum buying customers that means maximum profit. In the
age of modernization and globalization retailer needs to be aware of communication skills viz.
listening skill, oral skill, feedback skill, assertiveness skill, nonverbal communication. By
knowing various retail communication forms, importance and challenges in retail
communication, retailer can manage his business easily.
References:
1. Balaraman, B., 2004, Development of Generic Skills, Nagpur, Central Techno Publication.
2. B, John, v.Thill, 1975, Excellence in Business Communication, London, Oxford Publication.
3. Cundiff, M., 1972, Kinesics, New York, Parker Publishing.
4. M. Ashraf Rizvi, 1998, Communication for Retail Professionals, Delhi, Tata McGraw Hill
Publication House.
5. Levy Weitz. “Retailing Management “,Tata Mc Graw Hills Company Ltd New Delhi p.p472502.
6.Swapna Pradhan, “Retailing Management Text& Cases”, Tata Mc Graw Hills Company
p.p127-141,342-350.
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