CHAPTER 16

AGULTO, SON ANDREW S.

BSBA 2D

USING COMMUNICATION PROGRAMS TO DEVELOP BRAND IMAGES AND

BUILD CUSTOMER LOYALTY
A brand is a distinguishing name or symbol, such as a logo, that identifies the
products or services offered by a seller and differentiates those products and services from the
offerings of competitors.
Enter

Value of Brand Image

The value that a brand image offers retailers is referred to as brand equity. Strong
brand names can affect the customer's decision-making process, motivate repeat visits and
purchases, and build loyalty. In addition, strong brand name enables retailers to charge higher
prices and lower their marketing costs.

Building Brand Equity

The activities that a retailer needs to undertake to build the brand equity for its firm or
its private-label merchandise are (1) create a high level of brand awareness, 2) develop
favorable associations with the brand name, and (3) consistently reinforce the image of the
brand.

Brand Awareness
brand awareness refers to potential customers ability to recognize or recall that the
brand name is particular type of retailer or product/service.
 Top mind awareness
the highest level of awareness, occurs when consumers mention a specific brand
name first when they are asked about the type of a retailer, a merchandise category, or a
type of service.
Brand associations are anything linked to or connected with the brand name in a consumer's
memory.
some common Associations that retailers develop with their brand name are as follows:
1. Merchandise Category- the most common association is to link the retailer to a
category of merchandise.
2. Price/quality- Some retailers, such as Saks Fifth Avenue, want to be associated with
offering unique high fashion merchandise.
 3. Specific Attribute Merchandise- A retailer can link its stores to attributes, such as 7-
Eleven’s association with providing convenience or Nordstorm’s connection with
offering a high level of customer service.
4. Lifestyle or Activity- Some associate their name with a specific lifestyle or activity.
Brand Image
Consists of a set of associations that are usually organized around some meaningful
themes.
 Consistent Reinforcement The retailer's brand image gets developed and maintained
through the elements of the retailers offering, such as its merchandise assortment,
customer service, and pricing, as well as its communications through its store design,
Web site and advertising.

Extending the Brand Name

Retailers can leverage their brand names to support the growth strategies. For
example, IKEA used its strong brand image to enter the U.S. home furnishing retail market
successfully. Talbots introduced Talbots Mens and Lastly Pottery Barn launched Pottery Barn
Kids catalog to target families with children.

METHODS OF COMMUNICATING WITH CUSTOMERS

Paid Impersonal Communications
Advertising, sales promotions, store atmosphere, and web sites are examples of paid
impersonal communications.

Advertising
Advertising is a form of paid communication to customers using sixteenth largest
advertiser in the United States. Sears impersonal mass media such as newspapers, TV, radio,
direct mail, and the Internet. Following automobile manufacturers, retailers are the second
largest group of national advertisers, spending over $19 billion annually.

IMPERSONAL PERSONAL

ADVERTIS PERSONAL SELLING

WEB SITE
ING
EMAIL
COMMUN
SALES
ITY DIRECT MAIL
PROMOTI
PAID ON BUILDING M COMMERCE
STORE

PUBLICITY WORD OF MOUTH

UNPAID
Sales Promotion
Sales promotions offer extra value and incentives to customers to visit a store or
purchase merchandise during a specific period of time, The most common promotion is a
sale. Other sales promotions involve special events, in-store demonstrations, contests, and
coupons.

Coupons
Coupons offer a discount on the price of specific items at the time of purchase at the
store.

Store Atmosphere
Store Atmosphere The retail store itself provides paid, impersonal communications to
its customers. Store atmosphere reflects the combination of the store's physical
characteristics, such as its architecture, layout, signs and displays colors, lighting,
temperature, sounds, and smells, which together create an image in the customer's mind. The
atmosphere communicates information about the store's service, its pricing, and the
fashionability of its merchandise.

Website
Web Site Retailers are increasing their emphasis on communicating with customers
through their Web sites. Retailers use their Web sites to build their brand usage; inform
customers of store locations, special events, and the availability of merchandise in local
stores; and sell merchandise and services. For example, in addition to selling merchandise,
Office Deports Website has a Business Resource Center that provides advice and product
knowledge, as well as a source of networks

Community Building
Many retailers operate web sites devoted to community building, these sites offer
opportunity for customers with similar interest to learn about products and services that
support their hobbies and share information with others.
Paid Personal Communications
Paid forms of personal communications are growing as new technologies emerge.
This section details personal selling, e-mail, and direct mail, along with a newer form of paid
personal communications, namely, m-commerce. All of these personal communication
vehicles can be tailored to individual customers, whether through a face-to-face interchange,
as is the case with personal selling, or by using the customer relationship management
(CRM) systems described in Chapter 11. In some cases, however, all customers get the same
message.

Personal Selling
Retail salespeople are the primary vehicles for providing paid personal
communications to customers. Personal selling is a communication process in which
salespeople help customers satisfy their needs through face-to-face exchanges of information.

E-mail
E-mail is another paid personal communication vehicle that involves sending
messages over the Internet. E-mail, like other forms of electronic communications (e.g., Web
sites, m-commerce), can be personalized to the specific consumer and thus is similar to
communication delivered by salespeople. How-ever, when the same message is delivered
electronically to all recipients, electronic communications more closely resemble advertising.
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.

Direct Mail
Direct mail refers to any brochure, catalog, advertisement, or other printed marketing
material delivered directly to the consumer through the mail or a private delivery company.

Unpaid Personal Communications

Finally, retailers communicate with their customers through word of mouth (WOM),
or communication between people about a retailer? A relatively new pathway for WOM
communication is through social shopping. Social shopping is a communication channel in
which consumers use the Internet to engage in the shopping process by exchanging
preferences, thoughts, and opinions among friends, family, and others. 3° Customers or users
review, communicate about, and aggregate information about products, prices, and deals.
Strengths and Weaknesses of Communication Method
Control Retailers have more control when using paid versus unpaid methods. When using
advertising, sales promotions, store atmosphere, Web site, direct mail, and m-commerce,
retailers determine the message's content. With advertising, sales promotion, e-mail, direct
mail, and m-commerce, they also control the time of its delivery. Because salespeople have
their own style and might deliver different
Flexibility Personal selling is the most flexible communication method because salespeople
can talk with each customer, discover his or her specific needs and develop unique
presentation.
Credibility Because publicity and word of mouth are typically communicated by
independent sources, their information is usually more credible than the information in paid
communication sources. For example, customers tend to doubt claims made by salespeople
and in ads because they know retailers are trying to promote their merchandise. Recognizing
that younger consumers have greater doubts about the credibility of advertising, retailers
increasingly are using newer electronic methods of communications, such as encouraging
WOM through social shopping and posting reviews.
Cost Publicity and word of mouth are classified as unpaid communication methods, but
retailers do incur costs to stimulate them. For example, the retailer and manufacturer Perry
Ellis International (PEL) has an agreement with the Miami Dolphins and Dolphins Stadium
to promote the company's brands at Dolphins games. Its Cubavera logo appears on one
backlit, permanent sign for all stadium events, including Dolphins games, Florida Marlins
games, the FedEx Orange Bowl, and Monster Truck Jam events, which host a combined 2.5
million attendees each year.
PLANNING THE RETAIL COMMUNICATION PROGRAM
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.
As discussed at the beginning of this chapter, some communication programs can have a
long-term objective, such as creating or altering a retailer's brand image. Other
communication programs focus on improving short-term performance, such as increasing
store traffic on a specific weekend.
Communication Objectives
Although retailers' overall objective is to generate long- and short-term sales and
profits, they often use communication objectives rather than sales objectives to plan and
evaluate their communication programs. Communication objectives are specific goals related
to the retail communication mix's effect on the customer's decision-making process.

Determining Budget
Establish objectives

positioning Marginal Analysis

Objective and Task

Sales goals Allocate budget Implement and Evaluate
Rules of thumb Programs
Communication Objectives
Determine the Communication Budget
The economically correct method for setting the communication budget is marginal
analysis. Even though retailers usually don't have enough information to perform a complete
marginal analysis, the method shows managers how they should approach budget-setting
programs.
Marginal Analysis Method
Marginal Analysis Method Marginal analysis is based on the economic principle that
firms should increase communication expenditures as long as each additional dollar spent
generates more than a dollar of additional contribution. To illustrate marginal analysis,
consider Diane West, the owner and manager of a specialty store selling women's business
clothing.
Objective and Task Method
Determines the budget required to undertake specific task to accomplish
communication objectives.
Rule-of-Thumb Method
The previous two methods set the communication budget by estimating
communication activities' effects on the firm's future sales or communication objectives. The
rule-of-thumb methods discussed in this section use the opposite logic. They use past sales
and communication activities to determine the present communication budget.
Allocate the Promotional Budget
In this step, the retailer decides how much of its budget to allocate to specific
communication elements, merchandise categories, geographic regions, or long-term and
short-term objectives.
Plan, Implement, and Evaluate Communication Programs
The final stage in developing a retail communication program is its implementation
and evaluation (see Exhibit 16-3). This chapter's appendix discusses some specific issues in
implementing advertising programs, including developing the message, selecting the media
used for delivering the message, and determining the timing and frequency for presenting the
message.
Advertising Campaign
Hypothetically, imagine South Gate West is one of several specialty import home
furnishing stores competing for upscale shoppers in Charleston, South Carolina. The store has
the appearance of both a fine antique store and a traditional home furnishing shop, but most
of its merchandise is new Asian Imports.
Sales Promotion
Opportunity Many sales promotion opportunities undertaken by retailers are initiated
by vendors.

CHOOSING THE MOST EFFECTIVE ADVERTISING MEDIA

 Newspapers
 Magazines
 Television
 Radio
 Internet
 Outdoor billboard
 Shopping Guides
 Yellow Pages

Considerations in Selecting Media

 Coverage
 Reach
 Cost

DETERMINING ADVERTISING FREQUENCY AND TIMING

Frequency
Frequency is how many times the potential customer is exposed to an ad. Frequency
for Internet advertising, is typically assessed by measuring the number of times a Web page
with the ad is downloaded during a visit to the site.
The appropriate frequency depends on the ad's objective. Typically, several exposures
to an ad are required to influence a customer's buying behavior. Thus, campaigns directed
toward changing purchase behavior rather than creating awareness emphasize frequency over
reach. Ads announcing a sale are often seen and remembered after one exposure. Thus, sale
ad campaigns emphasize reach over frequency.

Timing
Typically, an ad should appear on, or slightly precede, the days consumers are most
likely to purchase merchandise. For example, if most consumers buy groceries Thursday
through Sunday, then supermarkets should advertise on Thursday and Friday. Similarly,
consumers often go shopping after they receive their paychecks at the middle and the end of
the month. Thus, advertising should be concentrated at these times.