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Published by Priyanka Potdukhe

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Published by: Priyanka Potdukhe on Oct 15, 2011
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* Professor of Marketing, College of Business Administration, University of the Philippines, Diliman,Quezon City. (E-mail: bpbg@up.edu.ph).
This paper investigates the effectiveness of an in-store radio in urban Philippines. Measures of international in-store media effectiveness studies are first reviewed. Then,this study replicates the Arbitron Retail Audio study using a sample of 600 Filipinoshoppers who were interviewed to obtain shopper perceptions, attitudes toward in-store radio and the corresponding effect on purchase behavior. Implications about making in-store media more effective are described at the end of the paper.
Keywords: marketing communication, in-store media effectiveness, shoppermarketing, in-store radio
Retail merchandising
or “in-storemedia” is a science that encompasses a hugenumber of marketing practices andtechniques such as deploying point-of-purchase (POP) displays, optimizing in-storeproduct presentation, creating cross-salespromotions and product adjacencies, andmay also include product packaging and ownstore’s internal and external branding (Gerba,2006). Neff (2007) also referred to retailmerchandising as shopper marketing.
Fromsimple signage of retailers hoping to promotespecials, in-store media has evolved intovarious incarnations including ads onshopping carts, cart straps, aisles and talkingshelves, end-aisle displays, floor signage,kiosks, interactive flat panels, in-store audioand video transmissions (Kotler & Keller,2009).Lempert (2005) asserted that in-storemedia can be easily tailored to currentmerchandising and promotional executions,which can be targeted to specific consumergroups through use of technologies, whichidentify them once in the store. RonaldFernandez, the shopper insight manager of Unilever Philippines, claimed that point-of-sale (POS) materials help customersaccomplish five functions: “navigation(helping them find what they need),facilitation (helping them decide whatproduct to buy), education (teaching themhow to use the product), inspiration (makingthe shopping experience exciting andinteractive) and repetition (remindingshoppers on what items they forgot)”
 (Arceo-Dumlao, 2008).Walmart has had in-store televisionnetwork since 1990s while Subway tested in-store video system in 2006 (Manners, 2006).United Kingdom’s Tesco rolled out itsnarrowcasting program in 2004 followed byKroger (Breen, 2004). Tesco TV’s trial run inthree stores was done with an average of 50plasma screens throughout the supermarketin 2003 (Grande, 2003). Advertisements onWalmart TV run on 125,000 TV screens in3,100 stores and appear three times an hour
Philippine Management Review
2008, Vol. 15, pp. 65-82.
with a potential audience of 127 millionshoppers per week. The Walmart airtimecosts between $50,000 and $300,000 for afour-week flight of ads, depending onfrequency (Petreca, 2007). Furthermore,Moorhouse (2008) described a “Scent-emitting LCD Display” system of NTTCommunications in Japan that is capable of emitting a variety of scents which couldmake possible unmanned demos, reducedproduct breakage/spillage, and moreexperiential marketing.Several factors have contributed to thegrowing popularity of in-store media. Firstly,consumers are busier than ever and encountermany distracting alternatives in in-home andout-of-home media (Breen, 2004).Traditional mass marketing media audiencesare declining as TV loses long-term shareand newspaper readership decreases (Grande,2003). It is becoming more difficult to get theattention of a shopper in a fast-pacedenvironment when time is short, soadvertising should occur close to the productlocation to ensure relevance and to avoidconfusing the consumer (Morrison, 2008b).Secondly, consumers have developed waysof screening out distractions in the traditionalmedia options (Breen, 2004). Morrison(2008b) is a proponent of the view that thebeauty of in-store media is its ability to reachshoppers at the point in which they aremaking a choice. Thirdly, one U.S.demographic segment, the 18-to-34 year oldmales have shunned traditional media, andeven the television network NBC agrees thatBest Buy, the electronics gadget retailer, isthe logical place to find them (Breen, 2004).Nelson and Ellison (2005) cited thatProcter and Gamble (P&G) believes that thethree to seven seconds when a consumernotices an item on a store shelf is one of itsmost important marketing opportunities. Tocapture what it calls the "first moment of truth," P&G created the position of Directorof First Moment of Truth (FMOT), toproduce in-store displays that can commanda shopper's attention. P&G’s FMOT strategyis anchored on the premise that most branddecisions are made at point of purchase, 74percent according to one study (POPAI a)and Peter Hoyt, executive director andfounder of the In-Store Marketing Institutebased in Skokie, Illinois (Schenker, 2008).Once inside the store people are in apurchasing mode versus the entertainmentmode in most traditional media available athome. Thus, the best place to impact theconsumer is when the consumer is in theaisle, reaching for the product. Inside thestore is the most effective way to reinforce orchange consumer behavior (Harris, 2006).A recent global study, “ShopperDecisions Made In-Store,” by the OgilvyGroup was based on more than 14,000shopper interviews conducted in 700 retailoutlets across 24 markets worldwidespanning five retail channels across sixproduct categories. The study found thatnearly three of ten shoppers around the worldwait until they are inside the store to decidewhich brand they will buy (Cooke, 2008).According to Point of PurchaseAdvertising International, total U.S. spendingon digital signs, in-store media and otherpoint-of-purchase advertising was $17B in2004, $18.1B in 2005 and $19.3B in 2006(Manners, 2006). Clean-Store policies haverestricted number and types of in-storeadvertisements or mechandising displays.The total number of retail displays declinedby 4.4 percent in 2006 and by 9.1 percent in2005-2006 (Neff, 2007). The need to reducedisplay clutter has opened possibilities toother in-store media options such as audioand video transmissions.Neff (2007) noted that shopper marketingis the fastest growing medium, evenoutpacing the Internet, citing results of aUnited States Deloitte Study for the GroceryManufacturer’s Association released inSeptember 2007. It grew from three percentof overall marketing budget of 19 package-goods manufacturers in 2004 to six percent in2007. This growth is expected to reach eightpercent in 2010. The compound annual
growth rate (CAGR) of shopper marketing is21 percent versus 15 percent for Internetadvertising and two percent for traditionalmedia in TV, print, and radio (Neff, 2007).Over the past 11 years, Neff (2007) estimatedthe P&G spent at least $500 million of its $8billion of its global advertising spending onshopper marketing.Results of a Reveries.com Survey of 192senior-level marketers in the United States(Harris, 2006) show that 70 percent arefrustrated with traditional media and 90percent are actively seeking alternatives.Table 1 details alternative media explored bythe managers. While 72 percent haveexplored in-store media as an option, 48percent rated their ability to measure theeffectiveness of retail and other mediaalternatives as only “fair” or “poor”.
Table 1Alternative Media Explored Versus Traditional MediaAlternative Medium To Reach Customers Percent
Online (e.g., blogs, email, search engine, video games,micro sites)81.5In-Store Retail (e.g., in-store TV, radio, point-of-sale,kiosk)72.0In-Market (e.g., events, branded entertainment,placement, satellite radio)65.23rd Screen/Mobile (e.g., cellphone, podcasting) 35.4Others 10.8
Source: U.S. Reveries.com Survey of Marketing Managers (Harris, 2006).
The apprehension about in-store media inthe Philippines was also highlighted byRoberto and Roberto (2008), when bothresponded in their weekly Philippine DailyInquirer Marketing Rx column to a bottledcosmetics manager’s concern on the highcost of in-store media and promotionmaterials and the local practice of practicallychanging these materials every month. Thismanager had talked to supermarket anddrugstore operators, including in-store mediaagencies and promo material designers whocould not furnish reliable evidence of thesales effectiveness of in-store mediamaterials.Two major issues hold back marketingmanagers from spending more on in-storemedia. First, 46 percent of shoppers ignorein-store media (Harris, 2006). Secondly, lack of audience-reach measurements comparableto traditional media make it harder to makespending decisions (Harris, 2006; Neff,2007).It is in this light that the present studyaddresses the research question of measuringeffectiveness of in-store media. Marketingmanagers could then compare theperformance of in-store media versustraditional media based on their experience of effectiveness of traditional media for theirown brands. Related managerial questionsmay include how in-store media is perceivedby retailers and customers and the issue of how in-store media is managed in theorganization.The study is significant because beingaware of the effectiveness of in-store mediacould lead to more acceptance andapplications in the Philippines. Moreover,being aware of in-store media limitations

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