Chapter 17

1. Chapter 17 Retail and Business-to-Business Advertising

2. Chapter Learning Objectives • Discuss retail advertising fundamentals. • Summarize the media options for retailers. • Explain business-to-business advertising objectives. • Identify the various media used in business advertising.

3. Retail Advertising • Retail Advertising • Used by merchants to sell products and service directly to consumers. • Accounts for nearly half of all the money spent on advertising. • Retailers sell through a physical facility.

4. Sell a Variety of Products Encourage Store Traffic Deliver Sales Messages Retail Advertising Should Perform Several Functions: Store Image Establish a Brand Local Retail Advertising Retail Advertising is Often Called Local Advertising Because the Target Market Often is Local.

5. Retail Advertising is Usually Targeted at People Living In the Store’s Local Community. Consumer Brand Advertising Supports Only the Sponsor’s Brands; Retail Advertising May Support Several Brands. Differences Between Local Retailing & National Brand Advertising Retail Advertising Directed at the Local Community Has An Inherent Urgency. Local Retail Advertising is Customized to Reflect the Local Store.

6. Create Consumer Understanding Differences Between Local Retailing & National Brand Advertising Build Store Awareness To Build and Maintain Store Traffic, a Retailer Must Meet Four Objectives: Convince Consumers That the Store’s Items Satisfy Needs Create Consumer Desire to Shop At This Store

7. Station Break • Go to the Benetton Web site at www.benetton.com. • Examine how the company deals with controversial and culturally sensitive issues. • How does this help them sell clothing? • If you were a local distributor (retail store) that carried Benetton products, how would the Benetton ads or policies affect your sales? • Use this company as an illustration of how truly different national product advertisers can be from their local counterparts. Discuss.

8. Cooperative Advertising Structure of Co-op Funds Suppliers of Co-op Can Fund Activity in Two Ways Manufacturer Reimburses Retailer for Ad Expenses Varies From Month to Month Accrual Fund Based on a % of Sales To Retailer Sometimes Called Ad Allowances Cooperative Advertising

9. Nonstore Retailing Nonstore Retailing Occurs When the ExchangeBetween the Manufacturer or Retailer and the Consumer Takes Place Outside the Traditional Retail Store. Reasons For Growth: Consumers Are No Longer Inclined to Spend Hours Shopping Improvements in Quality and Selection Improvements in Warranties Improvements in Mailing Lists That Target Consumers

10. Online Retailing and E-Commerce E-Commerce is the Selling of Goods and Services (Commerce) Through the Internet. Attractive to Those Who Value Convenience and Don’t Have Much Time. Rapidly Growing Industry • Purchase: • Computer Products, • Travel, • Entertainment, • Apparel, Gifts, etc. May Use Other Media to Advertise Their Products or Services.

11. Institutional Retail Sells the retail store as an enjoyable place to shop. Helps a store to establish its image. Loyalty programs fall under this category. Product Retail Presents specific merchandise for sale and urges customers to come to the store immediately to buy. Creates a store’s reputation through its merchandise. Institutional and Product Retail Advertising

12. Station Break • Go to the following Web sites: www.foleys.com, www.may.com, www.macys.com, www.dillards.com, and www.gap.com. • Which site seems to offer the most in the way of information and incentives to purchase? • Are sales advertised? If so, on which sites? • Which sites seem to match the image of the retail themselves? Discuss how your judgments were made. • What improvements could be made to these sites to make them more competitive and attractive?

13. Consolidation Increased Use of Free-Standing Inserts Demographic Time Stress, Aging Population, Geomarketing, Market Fragmentation Heightened Competition Markets Will Continue to Decrease in Size as Competitors Segment Them. Trends Affecting Retail Advertising

14. Creating the Retail Ad Who Works on The Creative? In-house Staff Media Ad Agencies Freelancers Executing Retail Ads Main Objective is To Attract Customers. Mention Store Location & Phone. May Save Money By Using Stock Artwork. Image or Price Price is a Factor In Image. Some Products Are Difficult to Differentiate (gas). Price Can Help Consumers to Comparison Shop.

15. Buying and Selling Local Media • Most rapidly changing area in retail advertising is the buying and selling of local media time and space. • Media competition has increased significantly. • Budgets are tighter. • All large markets have at least one local magazine that offers high-quality, four-color ads. • New selling tactics are called for. • Local Retail Media Strategy • Local retailers generally prefer reach over frequency. • Successful retailers use media that minimize waste, such as direct mail.

16. Media Alternatives Specialty Newspapers Online Media Local Retailers Are Interested Only in Local Media and Usually Select One of the Following: Shoppers & Preprints Magazines Direct Response Broadcast Media Directories

17. Buying Motives? Who Buys? Organizations Buy Products or Services in Business Markets. Organizations Buy Goods or Services to Support (1) Production Requirements, (2) Business Needs. Business-to-Business Advertising & Marketing Advertising Directed at People in Business Who Buy or Specify Products for Business Use.

18. Types of Business Markets and Products Purchased (Fig. 17.1)

19. Business Versus Consumer Marketing Business-to-Business Advertising Differs From the Creation of Consumer Advertising Market Concentration Decision Makers Strategic Orientation

20. Purchasing Objectives

21. Also Helps to: Business-to-Business Advertising Objectives Supporting Distributors and Resellers Creating Company Awareness Increasing Overall Selling Efficiency Helps to Answer Common Questions Helps to Contact Those That Can’t Be Reached by Salespeople

22. Select the Strongest Benefit Dramatize the Most Important Benefit Visual Should be Relevant Creating Business-to-Business Ads Layout Should Have a Sense of Balance and Flow Offer Should be Clear

23. Business-to-Business Advertising Media Business & Trade Publications Directory Advertising Media Choices Available for Business-to-Business Advertisers Direct Marketing Competitive Advantage Consumer Media The Web

24. Does Business Advertising Sell? • Many question the effectiveness of business-to-business advertising. Studies show that: • This form of advertising does create sales. • Increased advertising results in increased sales. • Paid to advertise to both dealers and end users when the product was sold through dealers. • Increased frequency leads to higher sales and profits. • It takes 4-6 months to see gains. • Use of color made a dramatic difference. • Ad campaign is often effective long after it ends. • Awareness and attitudes are affected favorably.

25. Trends in Business-to-Business Advertising Becoming More People Oriented More Accountability Is Required Ad Programs and Staff Are Being Pared Down Advertising Must Support Customer Sales And Choices