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Retail Communication Program

The document discusses planning a retail communication program by establishing objectives, determining the communication budget using various rule of thumb methods like percentage of sales or competitive parity, allocating the promotional budget across elements and objectives based on potential return, and finally implementing and evaluating the program and associated trade promotions.

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198 views

Retail Communication Program

The document discusses planning a retail communication program by establishing objectives, determining the communication budget using various rule of thumb methods like percentage of sales or competitive parity, allocating the promotional budget across elements and objectives based on potential return, and finally implementing and evaluating the program and associated trade promotions.

Uploaded by

rachealll
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Retail Communication Program

Planning the
Retail Communication Program
Establish Objectives
• Communication objectives:
– Specific goals related to the retail communication
mix’s effect on the customer’s decision-making
process
– Long-term: ex. creating or altering a retailer’s
brand image
– Short-term: ex. increasing store traffic
Determine the Communication Budget

• Marginal Analysis Method


– Based on the economic principle that firms should
increase communication expenditures as long as
each additional rupee spent generates more than
a rupee of additional contribution
– Very hard to use because managers don’t know
the relationship between communication
expenses and sales
Objective-and-Task Method
• Determines the budget required to undertake
specific tasks to accomplish communication
objectives
Rule of Thumb Methods
• Affordable Budgeting Method – sets
communication budget by determining what
money is available after operating costs and
profits are budgeted.

• Drawback: The affordable method assumes


that the communication expenses don’t
stimulate sales and profits.
Rule of Thumb Methods
• Percentage of Sales Method – communication
budget is set as a fixed percentage of
forecasted sales.

• Drawback: This method assumes the same


percentage used in the past, or by
competitors, is still appropriate for the retailer.
Rule of Thumb Methods
• Competitive Parity Method – this
communication budget is set so that the
retailer’s share of communication expenses
equals its share of the market.

• Drawback: This method (like the others) does


not allow the retailer to exploit the unique
opportunities or problems they confront in a
market.
Allocate the Promotional Budget
• The retailer decides how much of its budget to
allocate to specific communication elements,
merchandise categories, geographic regions, or
long- and short-term objectives
• Budget allocation decision is more important
budget amount decision

High-assay principle: The retailer allocate the


budget to areas that will yield the greatest return
Implement and evaluate the program
• Many sales promotion opportunities
undertaken by retailers are initiated by vendors
• To evaluate a trade promotion, the retailer
considers:
– Realized margin from the promotion
– Cost of the additional inventory carried
– Potential increase in sales
– Potential loss
– Additional sales

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