What do you understand by retail communication mix discuss various methods of it along with suitable examples?

Marketing is a broad business function that includes product research and development, merchandising and distribution processes and pricing, as well as communication or promotion. The communication mix refers to specific methods used to promote the company or its products to targeted customers. Some depictions of the promotional mix include five elements, while others add a sixth – event sponsorship.

The Advertising Element

Advertising is often the most prominent element of the communication mix. In fact, marketing and advertising are often misconstrued as the same thing. Advertising includes all messages a business pays to deliver through a medium to reach a targeted audience. Since it involves the majority of paid messages, companies often allocate significant amounts of the marketing budget to the advertising function. While it can be costly, the advertiser has ultimate control over the message delivered, since it pays the television or radio station, print publication or website for placement.

Personal Selling and Direct Marketing

Personal selling is sometimes integrated with the direct marketing element. However, many companies make such extensive use of a sales force that it is important to consider this component distinctly. Distribution channel suppliers use salespeople to promote products for resale to trade buyers. Retail salespeople promote the value of goods and services to consumers in retail businesses.

Selling is more emphasized by companies that sell higher-end products and services that require more assertive efforts to persuade customers to buy.

Discounts and Promotions

Sales promotions or discounts are similar to advertising in that they are often promoted through paid communication. However, sales promotions actually involve offering a discounted price to a buyer. This may include coupons, percent-off deals and rebates. Along with ads to promote deals and coupon mailers, companies use exterior signs and in-store signage to call customer attention to the discounts.

Goals of this communication tool include increasing revenue and cash flow, attracting new customers and clearing out extra inventory.

Public Relations and Messaging

Public relations is sometimes somewhat similar to advertising in that much of it involves messages communicated through mass media. The major difference is you don't pay for the time or space for the message. A television or newspaper feature story mentioning a business, for instance, isn't paid for and can provide brand exposure.

The downside of PR is that you don't always control the messages. You can try to influence them through press releases and invites for media coverage, but the media could put a negative spin on the story.

Direct Marketing to Targeted Customers

Direct marketing includes some aspects of both sales promotions and personal selling. It is interactive communication with customers where the company's message seeks or implores a response from targeted customers. E-mail and direct mail are common formats. These messages are sent to customers with special offers or calls to action, often promoting limited-time deals or new product launches.

Mail-order clubs, online or print surveys and infomercials are other examples of direct marketing communication.

Event Sponsorship and Having a Presence

Event sponsorship is the element sometimes left out of the five-element communication mix. Many models include it within advertising. Event sponsorship occurs with a company pays to have a presence at a sports, entertainment, nonprofit or community events. The sponsorship may include a mix of benefits including booth representation during the event to hand out samples, gifts and literature, name mention during the event and ad spots connected to the event.

Learning Outcomes

• Explain the retail mix

So how do we take our retail planning strategy and put it into an actionable plan?  Part of the success of any retailer is taking that strategic plan and breaking it apart into actionable and meaningful steps that will lead to success. A well thought out and planned retail mix provides the retailer with a focused position and helps differentiate them from the competition. A retail mix, defined, is the marketing plan put in place to address key factors such as location, price, personnel, services, and goods. The retail mix is also referred to as the “6 Ps.”

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One important thing to keep in mind is that any competitive advantages you have in your strategy should help form your retail mix.  In addition, the retail mix should always have the target market in mind.  The retail mix will differ based on the store and the type of product offered to the customer.

Discussing and evaluating your retail mix in the organization offers a number of benefits.  First, you are addressing the needs of your target market.  In essence it forces the retailer to make the customer top of mind and foremost in all strategy decisions.  It also allows for a business planning strategy within the retailer.  By approaching all six components the retailer is ensuring they are able to meet the needs of the customer using all these components.  Lastly, it allows the retailer to respond to competition.  For example, a key competitor for JCPenney is Kohl’s.  If Kohl’s drops prices a national brand such as Levi’s, JCPenney might follow suit.

Let’s now take a look at the components of the retail mix that are ultimately the pieces of the retailer’s strategy.

1. Price

What is my pricing strategy?  What is my markup strategy and how does that affect my overall retail price?  You must make sure you calculate your retail price based on the markup you receive and not the costs involved.  You also want to think about profitability and relate this back to the goals of your area as well as your organization.

2. Promotion

What promotional tools will you use to influence the consumer’s purchase decision and, overall, their intention to purchase?  This is where you also want to make sure you include a budget that shows where resources are allocated as well as a time table for the promotional activities.  Remember to include specific examples of your proposed promotional activities.  Some examples include online promotions, print advertising, and any television advertising.

3. Place

What are the hours of operation for your store?  How many employees do you need and when do you need them?  This is where you can also include a general description of the responsibilities of each associate along with some type of detailed info on the organization’s structure.  This could also be dependent upon the area in which you are located as well as the needs of the customer.

4. Product

What type of product do you intend to carry?  What is the depth (how much you will carry of an item) as well as the breadth (number of SKUs) you will carry in your assortment?  What is your anticipated turn as well as inventory levels?  Later we will discuss in more detail the importance of inventory turnover and how it contributes to profitability.  This is where you want to make sure you have adequate inventory levels to meet customer demand.  Too much product could lead to excessive markdowns which deteriorates profitability while too little desired merchandise might lead to missed sales opportunities.  Does your product meet your customer’s needs?

5. Presentation

Will you have a free-standing location?  Will you be located in the mall?  How is the location you have chosen a good fit for your target market?  It is during this time you will also want to provide a thorough trade analysis that shows the population in the area and how they are a good fit for your business.

6. Personnel

How are you selling to your customers?  What kind of internal marketing supports your sales team? What are the graphics that set your store apart?  What does the signage look like inside and outside of your store?  These are all key elements you want to consider.

For the final segment of this section let’s take a look at how we the retailer can take the one element of the mix (product) and transform it into a customer experience as well as why this is important.

You can view the transcript for “Curated Retailing: Tailoring the Product Mix to a Customer Experience” (opens in new window).

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