CHAPTER 14
RETAIL COMMUNICATION MIX
ANNOTATED OUTLINE
INSTRUCTOR NOTES
I. Introduction
• The communication program informs customers about the
retailer, describes the merchandise and services offered,
and plays a critical role in developing repeat visits and
customer loyalty.
• For any communications campaign to succeed, the retailer
must deliver the right message to the right audience
through the right media at the right time, with the ultimate
goal of profiting from long-term customer relationships, as
well as short-term sales.
• These media elements vary on five dimensions:
Ask students how new forms of
social media elements (YouTube,
blogs, Twitter, Facebook) have
impacted retailers today in terms
of personalization, interactivity,
personalization, interactivity, message control, extent of
information provided, and the cost per exposure.
II. New Media Elements
• Over the past decade or so, the use of newer forms of
media, such as online (e.g., websites, e-mail, and mobile),
and social media (e.g., YouTube, Facebook, blogs, and
Twitter) has exploded.
LO 14-1 Identify the new media
elements.
A. Online Media
1. Websites
• Retailers use their websites to build their brand image;
inform customers of store locations, special events, and
the availability of merchandise in local stores; and sell
merchandise and services.
2. E-mail
• E-mail involves sending messages over the Internet to
specific individuals. Retailers use e-mail to inform
customers of new merchandise and special promotions,
confirm the receipt of an order, and indicate when an
order has been shipped.
See PPT 14–14
Compare e-mail communication
with direct mail.
3. Mobile Marketing
• Mobile marketing, also called mobile commerce, M-
commerce, or mobile retailing, is marketing through
experience with their mobile interface.
B. Social Media
• Social media include various forms of electronic
communication, which users can employ to create online
communities in which they share ideas, information, their
interpersonal messages, and other content (e.g., videos).
• The cost per exposure for social media is relatively low
compared to traditional media.
1. YouTube
• On this video-sharing social media platform, users upload,
share, view, and comment on videos. This medium gives
retailers a chance to express themselves in a different way
than they have before.
Ask students if they have ever
looked up “how to do” something
on YouTube. Discuss how retailers
could benefit by demonstrating
product uses or giving tips on DIY
projects.
2. Facebook
• This social media platform with more than 1.5 billion active
users gives companies a forum to interact with fans.
3. Blogs
• On a blog (weblog), an individual blogger or a group of
users regularly post their opinions and various topical
information on a web page.
Ask students to share some of
their favorite blogs and the
characteristics of the blog that
make them loyal readers.
• A well-received blog can communicate trends, announce
special events, and create word of mouth, which is
communication among people about an entity such as a
retailer or a product or service.
4. Twitter
• Twitter is a microblog—a short version of a blog—in which
users are limited to 140-character messages.
III. Traditional Media Elements
• Retailers use various traditional media elements: mass
media advertising, promotions, in-store marketing,
personal selling, and public relations.
LO 14-2 Identify the traditional
media elements.
See PPT 14–5
Ask students why retailers want to
communicate with their
customers. What do they want to
tell them?
A. Mass Media Advertising
1. Advertising
• This form of mass media entails the placement of
announcements and persuasive messages purchased by
retailers and other organizations that seek to inform
and/or persuade members of a particular target market or
audience about their products, services, organizations, or
ideas.
See PPT 14–6 and 14-7
Discuss with students the benefits
and drawbacks of different types
of advertising. For example, why
might a retailer choose to run a
newspaper advertisement versus
a television advertisement?
Chapter 14 – Retail Communication Mix
information transmitted can be limited.
• Traditionally, mass advertising has been limited to
newspapers, magazines, direct mail, TV, radio, and
billboards.
2. Newspapers
• Retailing and newspaper advertising grew up together over
the past century. But the growth in newspaper advertising
by retailers has slowed recently as retailers have begun
using other media.
• Newspapers are mostly effective for targeting specific
retail markets.
3. Magazines
• Advertising in national magazines is mostly done by
national retailers such as Target and Sephora.
• Retailers tend to use it for image advertising because the
reproduction quality is high.
4. Direct Mail
• Direct mail refers to any brochure, catalog, advertisement,
or other printed material delivered directly to the
consumer.
customer groups on the basis of data collected through
CRM systems.
5. Television
• Television commercials can be placed on a national
network or local station. Retailers typically use TV for
image advertising, to take advantage of the high
production quality and the opportunity to communicate
through both visual images and sound.
6. Radio
• Many retailers use radio advertising because messages can
be easily targeted to a specific segment of the market.
• The cost of developing and broadcasting radio commercials
is relatively low.
7. Billboards
• Billboards are outdoor advertisements that are generally
large and appear adjacent to and above roads or highways.
B. Sales Promotions
• Sales promotions are special incentives or excitement-
building programs that encourage consumers to purchase
a particular product or service.
See PPT 14–8 and 14-9
Ask students how they respond to
sales promotions. Do sales
promotions generate excitement?
Do they expect certain retailers to
engage in more sales promotion
activities than other?
1. Coupons
• Coupons offer a discount on the price of specific items
when they’re purchased at a store.
• Some retailers have linked coupons directly to their loyalty
programs.
2. Rebates
price returned to the buyer in the form of cash.
3. Premiums
• A premium offers an item for free or at a bargain price to
reward some type of behavior, such as buying, sampling, or
testing.
C. In-Store Marketing/Design Elements
1. Point-of-Purchase Displays
• Cost per exposure is low. Interactivity is low.
2. Samples
• Samples offer potential customers the opportunity to try a
product or service before they make a buying decision.
3. Special Events
• A special event is a sales promotion program comprising a
number of sales promotion techniques built around a
seasonal, cultural, sporting, musical, or some other type of
activity.
E. Personal Selling
• Personal selling is a communication process in which sales
associates help customers satisfy their needs through face-
to-face exchanges of information.
Communicating through
salespeople is much more
expensive than communicating
through advertising. Ask students
why department stores place
more emphasis on paid personal
versus impersonal
communications. Why do
supermarkets do just the
opposite?
F. Public Relations
maintaining positive relationships with the media.
Why don’t retailers rely on public
relations rather than advertising?
1. Neiman Marcus and Its Christmas Catalog
• The Neiman Marcus Christmas book is perhaps the nation’s
best-known retail catalog. Its reputation is largely due to its
annual tradition of ultra-extravagant his-and-hers gifts.
2. Macy’s and Cause-Related Marketing
• Macy’s has partnered with many charities in a successful
3. Retailers and Product Placement
• When retailers and vendors use product placement, they
pay to have their product included in nontraditional
situations, such as in a scene in a movie or television
program.
IV. Planning the Retail Communication Program
LO 14-3 List the steps involved
A. Establish Objectives
• Retailers establish objectives for their communication
programs to provide (1) direction for people implementing
the program and (2) a basis for evaluating its effectiveness.
See PPT 14–22
Discuss the goals for a
communications program.
shopped during a sale? If
making process.
• To effectively implement and evaluate a communication
program, objectives must be clearly stated in quantitative
terms.
customers found the location very
inconvenient?
Illustrate which methods are more
effective at different stages of the
B. Determine the Communication Budget
• The second step in developing a retail promotion program
is to determine a budget.
See PPT 14–23
Review the methods for setting a
budget and illustrate the
difference in the logic between
1. Marginal Analysis Method
• Marginal analysis is based on the economic principle that
firms should increase promotion expenditures so long as
each additional dollar spent generates more than a dollar
of additional contribution.
See PPT 14–24
Ask students where the estimates
come from. Indicate they are
judgments that the manager has
2. Objective-and-Task Method
• The objective-and-task method determines the budget
required to undertake specific tasks for accomplishing
communication objectives.
See PPT 14–25
As in the marginal analysis, the
relationship between the
expenditures and the objective
3. Rule-of-thumb Methods
• In the previous two methods the communication budget is
set by estimating communication activities’ effects on the
firm’s future sales or communication objectives.
• The rule-of-thumb methods use the opposite logic by
using past sales and communication activity to determine
the present communication budget.
See PPT 14–27
Ask students why the marginal
analysis and objective-and-task
methods are more appropriate
than the rules of thumb for setting
advertising budgets? If the rules of
thumb are not good methods, why
do retailers use them so
frequently?
a. Affordable Budgeting Method
b. Percentage-of-Sales Method
• The percentage-of-sales method sets the
communication budget as a fixed percentage of
The typical advertising
expenditures for food stores are
1.4% of sales. Ask students
whether they would expect the
c. Competitive Parity Method