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Chapter 11
Advertising and Promotion
Retailing, 6th Edition. Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved.
Learning Objectives
1. Name the four basic components of the retailer’s
promotion mix and discuss their relationship with
other decisions.
2. Describe the differences between a retailer’s longterm and short-term promotional objectives.
3. List the six steps involved in developing a retailer’s
advertising campaign.
4. Explain how retailers manage their sales promotion
and publicity.
LO 1
The Retail Promotion Mix
 Types of Promotion
 Promotion in the Supply Chain
LO 1
The Retail Promotion Mix
 Promotion:
Is a means that retailers use to bring traffic into
their stores, and it includes advertising, sales
promotion, publicity, and personal selling.
LO 1
The Retail Promotion Mix
 Advertising:
Is paid, nonpersonal communication through
various media by business firms, nonprofit
organizations, and individuals who are in some
way identified in the advertising message and
who hope to inform or persuade members of a
particular audience; includes communication
of products, services, institutions, and ideas.
LO 1
The Retail Promotion Mix
 Sales promotion:
Involves the use of media and nonmedia
marketing pressure applied for a
predetermined, limited period of time at the
level of consumer, retailer, or wholesaler in
order to stimulate trial, increase consumer
demand, or improve product availability.
LO 1
The Retail Promotion Mix
 Publicity:
Is non-paid-for communications of information
about the company or product, generally in
some media form.
LO 1
The Retail Promotion Mix
 Personal selling:
Involves a face-to-face interaction with the
consumer with the goal of selling consumer
merchandise or services.
LO 1
The Retail Promotion Mix
 Primary trading area:
Is the geographic area where the retailer can
serve customers, in terms of convenience and
accessibility, better than the competition.
LO 1
The Retail Promotion Mix
 Secondary trading area:
Is the geographic area where the retailer can
still be competitive despite a competitor having
some locational advantage.
LO 1
Promotional Objectives
 Long-Term Objectives
 Short-Term Objectives
 Interdependence
LO 2
Promotional Objectives
 Institutional advertising:
Is a type of advertising in which the retailer
attempts to gain long-term benefits by
promoting and selling the store itself rather
than the merchandise in the store.
LO 2
Possible Promotion Objectives in Retailing
Exhibit 11.1
LO 2
Promotional Objectives
 Promotional advertising:
Is a type of advertising in which the retailer
attempts to increase short-term performance
by using product availability or price as a
selling point.
LO 2
Steps in Planning a Retail Advertising Campaign
 Selecting Advertising Objectives
 Budgeting for the Campaign
 Designing the Message
 Media Alternatives
 Media Selection
 Scheduling of Advertising
 Evaluating the Results
LO 3
Steps in Planning a Retail Advertising Campaign
 Affordable Method
Is a technique for budgeting advertising in
which all the money a retailer can afford to
spend on advertising in a given time period
becomes the advertising budget.
LO 3
Steps in Planning a Retail Advertising Campaign
 Percentage-of-sales method:
Is a technique for budgeting in which the
retailer targets a specific percentage of
forecasted sales as the advertising budget.
LO 3
Advertising as Percentage of Sales by Line of Trade
Exhibit 11.2
LO 3
Steps in Planning a Retail Advertising Campaign
 Task and objective method:
Is a technique for budgeting in which the
retailer establishes its advertising objectives
and then determines the advertising tasks that
need to be performed to achieve those
objectives.
LO 3
Task and Objective Method:
Advertising Budget Development
Exhibit 11.3
LO 3
Advertising Expenditures as Percentage of Sales:
Some Leading Retailers
Exhibit 11.4 – 1st 3 Categories
LO 3
Advertising Expenditures as Percentage of Sales:
Some Leading Retailers
Exhibit 11.4 – 2nd 3 Categories
LO 3
Steps in Planning a Retail Advertising Campaign
 Vertical cooperative advertising:
Occurs when the retailer and other channel
members (usually manufacturers) share the
advertising budget. Usually the manufacturer
subsidizes some of the retailer’s advertising
that features the manufacturer’s brands.
LO 3
Steps in Planning a Retail Advertising Campaign
 Horizontal cooperative advertising:
Occurs when two or more retailers band
together to share the cost of advertising
usually in the form of a joint promotion of an
event or sale that would benefit both parties.
LO 3
Media Alternatives
 Newspaper Advertising
 Television Advertising
 Radio Advertising
 Magazine Advertising
 Direct Mail
 Internet
 Miscellaneous Media
LO 3
Steps in Planning a Retail Advertising Campaign
 Coverage:
Is the theoretical maximum number of
consumers in the retailer’s target market that
can be reached by a medium and not the
number actually reached.
LO 3
Steps in Planning a Retail Advertising Campaign
 Reach:
Is the actual total number of target customers
who come into contact with an advertising
message.
LO 3
Steps in Planning a Retail Advertising Campaign
 Cumulative reach:
Is the reach that is achieved over a period of
time.
LO 3
Steps in Planning a Retail Advertising Campaign
 Frequency:
Is the average number of times each person
who is reached is exposed to an
advertisement during a given time period.
LO 3
Steps in Planning a Retail Advertising Campaign
 Cost per thousand method (CPM)
Is a technique used to evaluate
advertisements in different media based on
cost. The cost per thousand is the cost of the
advertisement divided by the number of
people viewing it, which is then multiplied by
1,000.
LO 3
Steps in Planning a Retail Advertising Campaign
 Cost per thousand – target market (CPM-TM)
Is a technique used to evaluate
advertisements in different media based on
cost. The cost per thousand per target market
is the cost of the advertisement divided by the
number of people in the target market viewing
it, which is then multiplied by 1,000.
LO 3
Steps in Planning a Retail Advertising Campaign
 Impact:
Refers to how strong an impression an
advertisement makes and how well it
ultimately leads to a purchase.
LO 3
Steps in Planning a Retail Advertising Campaign
 Advertising effectiveness:
Is the extent to which the advertising has
produced the result desired.
LO 3
Steps in Planning a Retail Advertising Campaign
 Advertising efficiency:
Is concerned with whether the advertising
result was achieved with the minimum
financial expenditure.
LO 3
Management of Sales Promotions and Publicity
 Role of Sales Promotion
 Type of Sales Promotion
 Evaluating Sales Promotions
 Publicity Management
LO 4
Types of Sales Promotion
Exhibit 11.5
LO 4
Management of Sales Promotions and Publicity
 Premiums:
Are extra items offered to the customer when
purchasing promoted products.
LO 4
Management of Sales Promotions and Publicity
 Contests and sweepstakes:
Are sales promotion techniques in which
customers have a chance of winning a special
prize based on entering a contest in which the
entrant competes with others, or a
sweepstakes in which all entrants have an
equal chance of winning a prize.
LO 4
Management of Sales Promotions and Publicity
 Loyalty programs:
Are a form of sales promotion program in
which buyers are rewarded with special
rewards, which other shoppers are not offered
for purchasing often from the retailer.
LO 4
Management of Sales Promotions and Publicity
 Coupons:
Are a sales promotion tool in which the
shopper is offered a price discount on a
specific item if the retailer is presented with the
appropriate coupon at time of purchase.
LO 4
Management of Sales Promotions and Publicity
 In-store displays:
Are promotional fixtures of displays that seek
to generate traffic, highlight individual items,
and encourage impulse buying.
LO 4
Management of Sales Promotions and Publicity
 Demonstrations and sampling:
Are in-store presentations with the intent of
reducing the consumer’s perceived risk of
purchasing a product.
LO 4
What Sales Promotion Can and Cannot Achieve
Exhibit 11.6
LO 4
Positive Store Image
 Dee Lincoln, cofounder
of Del Frisco’s Double
Eagle Steakhouse, paid
a record $80,000 for a
1,309-pound Main-Anjou
Cross-breed at Denver’s
National Western Stock
Show to introduce her
new store and to
generate a positive store
image.
LO 2
Corporate Citizenship
 Wal-Mart sponsors a
variety of community
and public service
programs, which help to
promote its role as a
good corporate citizen.
LO 2
Does this Ad Discriminate?
Consider the following ad that may be very similar to one in your
local paper this morning.
For Sale
A Spacious, Lovely House With a View. It has a
beautiful view overlooking Buffalo Lake, spacious
master bedroom, walk-in closets, and children’s
rooms at the opposite end, complete with
maid’s/nanny’s quarters. There’s even a family
room/den downstairs. It’s perfect for newlyweds or
for young couples, since it’s located in a peaceful
residential community, within walking distance to
private schools and the beach.
LO 3
Lawyer’s Declaration of Independence
A LAWYER’S REWRITE OF …
A DECLARATION OF INDEPENDENCE
By the Representatives of the United
States of America
In General Congress Assembled
Are you sure that everyone
was there that day?
LO 3
Lawyer’s Declaration of Independence
When in the Course of human of Events, it
becomes necessary for one People to dissolve the
Political Bands which have connected them with
another, and to assume among the Powers of the
Earth, the separate and equal Station to which the
Laws of Nature and of Nature's God entitle them,
a decent Respect to the Opinions of Mankind
requires that they should declare the causes
Where are these laws published?
which impel them to the Separation.
No copies are on file with the FTC
LO 3
Lawyer’s Declaration of Independence
We hold these truths to be self-evident,
and that all Men are created equal that
they are endowed by their Creator with
certain unalienable Rights, that among
these are Life, Liberty and the Pursuit of
Happiness
-This
is an expressed
warrant.
Change copy to state it is not guaranteed.
LO 3
Lawyer’s Declaration of Independence
We hold these truths to be self-evident, and that
all Men are created equal that they are endowed
by their Creator with certain unalienable Rights,
that among these are Life, Liberty and the
Pursuit of Happiness -- That to secure these
Rights, Governments are instituted among Men,
deriving their just Powers from the Consent of
the
Governed,
that are
whenever
any form of
What
other rights
we ready
Government
becomes destructive of these
to disclose later?
LO 3
Lawyer’s Declaration of Independence
All is too general a term.
Qualify
Prudence, indeed, will dictate that Governments
long established should not be changed for light
and transient Causes; and accordingly all
Experience hath shown, that Mankind are more
disposed to suffer, which Evils are sufferable, than
to right themselves by abolishing the Forms to
which they are accustomed.
LO 3
Lawyer’s Declaration of Independence
Jefferson, aren’t you getting a
little carried away?
But when a Long Train of Abuses and
Usurpations pursuing invariably the same Object,
evinces a Design to reduce them under absolute
Despotism, it is their Right, it is their Duty, to
throw off such Government, and to provide new
Guards for their future Security.
LO 3
Lawyer’s Declaration of Independence
Will he sign a release?
The History of the present King of Great Britain is a
History of repeated injuries and Usurpations, all
having in direct Object the Establishment of an
absolute Tyranny over these States.
LO 3
Lawyer’s Declaration of Independence
Aren’t you confusing “your opinions”
with ‘facts?”
To prove this, let Facts be submitted to a candid
World
LO 3
Additional Slides
Retail Promotion Mix
Sales
Advertising Promotion
Publicity
Personal
Selling
LO 1
Promotional Objectives
Interdependence
Short-term
Objectives
Long-term
Objectives
LO 2
Budgeting for the Campaign:
Retailer-Only Campaigns
Affordable
method
Percentageof-sales
method
Task-andobjective
method
LO 3
Designing Creative Ads
Attract attention
And retain attention
Achieve the objective of
the advertising strategy
Avoid having any errors,
Especially legal ones
LO 3