UNIT 10 IN-STORE OBJECTIVES,

ADVANTAGES AND LIMITATIONS

10.0 Objectives
10.1 Introduction
10.2 Why in-Store Promotion?
10.3 Promotional Objective Parameters
10.4 Objectives of In-Store Promotion
10.5 Growth of In-Store Promotion
10.6 Opportunities and Limitations of In-store Promotion
10.7 Let Us Sum Up
10.8 Terminal Questions

10.0 OBJECTIVES
, After studying this unit you will be able to:
Explain the role of in-store promotion;
Describe the reasons for in-store promotion to come into existence;
Identify objectives of in-store promotion;
State the overall objectives of in-store environment;
Develop in-store promotion objectives;
= State the opportunities and limitationsof in-store promotion.

i 1 0 . INTRODUCTION
In-store promotion is broadly defined as Sales promotion at a retailer's
location, with bundled offers, expert advice, product demonstrations, product
samples, special discounts, etc. It is also called in-store promqtion.
"The store is more than a distribution point. It is a marketing medium
that allows for various touch points of communication or messaging."
In-store promotion is increasingly finding a place in the marketing mix. It is the
promotional activity located within a sales outlet. In-store promotion is one of
the most important promotional strategies followed by retailers worldwide. It
refers to communication strategies designed to act as a direct inducement, an
added value, or an incentive for the product to customers. In-store marketing
creates a lively atmosphere and enriches the shopping experience.
In-store promotions can be used to inform, persuade, and remind target customers
about the business and its marketing mix. Some common types of in-store
promotion include samples, coupons, sweepstakes, contests, in-store
displays, trade shows, price-off deals, premiums, and rebates.
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 Marketing and
Communication Many everyday purchase decisions are made in supermarkets at the point of
sale. Even when consumers shop intending to purchase a particular brand, they
often change their minds once they are in the supermarket, while POS materials
- display bins, shelf talkers, floor stickers, and price promotions are all known
to have a positive affect on sales at store level.
Critics say the store is really assembling a cacophony of messages that draw
attention from the brands on the shelf.
The value and complexity of sales promotion are clear from this commentary:
Three of every four shoppers are open to new experiences as they browse the
aisles of super- markets and search for bargains at drugstores and mass .
merchandisers. This means an opportunity to make a measurable impact when
they're free of distractions and most receptive to new ideas. Some retailers
must work harder to get shoppers' attention and use more displays and special
signs. While shopping varies by store, there are exceptions based on the product.
For shampoos and pain relievers bought at drugstores and mass merchandisers,
more browsing takes place than at supermarkets. Shampoos and pain relievers
need more intrusive promotion at supermarkets. In drug and discount stores, its
food items that need to use them.

10.2 WHY IN STORE PROMOTIONS?

Following are the reasons why earlier retail outlets didn't have their individual
identity and retail sales were lost:
Poor qualification of the customer
Salespersons not demonstrating the good or service
Failure to gut feeling into the presentation
Poor knowledge of the salespersons about the product gnd its competitors. ,
Arguing with a customer
I
P No suggestive selling in selling related items
Giving up too early
Inflexibility in giving solutions to the customer
Poor follow-up in taking orders from the customer or in maintaining their
data.
a In the present day context there is high level of competition and customers have
several choice of stores to choose. Good in store promotions and deals always
drive customers to splurge and therefore in store promotions have become an
integral part of store survival strategy.

10.3 PROMOTIONAL OBJECTIVE PARAMETERS

i The promotional objectives should have some precise terms in order to c a w
I out the promotion and then monitor the results - so called SMART objectives.
172 SMART objectives will provide Specific, Measurable, Actionable, Realistic
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Ovt?rd &jediv= @f
in+&me e z d r t m a m ~ ~ t In-store Objectives,

a Emterhmnent and inspiration plays an important mie in in-store promotion

thus creating added value in using the store.
The in-store promotion envirawmnt dmuld rnzdce a positive statement about
what products can do to make the shopper a more interesting individual..
Design and environment of the in-store protfiotioat should differentiate the
image and nature of the store.
In-store promotion can also influence impulse and mood related purchasing.
Stop and shop: Customers who are just passing by, with no intention of
purchmirsg, wuruld be m m g e d to enter the store. The promotional activity
m y ta:such thnt it docs not directly hint at a purchase, but just a free trial.
For exampk, fIee hairstyling dune using hair gel sold by the store.
Shop and buy: Once the customers have been persuaded to enter the
store, they have to be convinced to purchase by presenting the merchandise
in such a manner tbat the customer feels a desire to buy. For example .the
s t m could offer a money -off voucher with the hair gel bottle or the
customer would be entitled to get a shampoo if they purchase the hair gel.
a- Buy Bigger: The promotional activity aims to persuade the customers to
buy ia it greater quantity or buy other products in addition thus increasing
the average bill size during promotions. For example, customers who buy
a bigger pack may be entitled to enter into a contest or they can get a free
gift or customers who purchase merchandise more than a specified amount
w d get similar benefits.
Traffic building is achieved by specid event promotions like Diwali, Raksha
bandhan, Valentine's Day promotions.
a Inventory reduction through end of season sale.
Creation and building store image through feature advertising and displays
and joint promotions and price image by highlighting the discounts.
It helps consumer reduce not only financial risk but also psychological and
social risk by making consumer confident of hisher purchase, conformation
to group norms by shopping at famous stores /brands and possibility of
acquiring well known branded apparel during promotions.
a In-store promotions may induce non buyers to walk in to the store and
loyalty programmes may encourage to buy mote, mcwe often or to upgrade
to better quality.
r Exciting in-store promotions also have tendency to generate positive word
of mouth and help consumer feel a smart shopper.
DRIVERS OF PROMOTIONS
Big retail chains across the country such as Shoppers' Stop, Westside,
Pantaloon Retail (India), Lifestyle, Ebony Retail Holdings, Globus, and

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Retail Marketing and
Communication The Home Store leave no stone unturned to woo the consumers during
the festive season. It is normal for retail chains to offer attractive freebies
and discounts during the festive bonanza and its benefit are two-fold. One
is to cash in on increased festive season spending. Second is more bottom-
line driven, with loss making stores looking to wipe out losses by
collaborative efforts with brand participation, thereby brands end up
spending for the promotion.
Shoppers Stop registered in Guinness book of record in 1997 through a
unique in-store promotion to popularize the concept of Tie through its
"TIE FESTIVAL" by putting up 264 feet Tie to promote the store sales.
The 264 ft Tie that went into the
Guinness Book of Records in
October 1997 at Shopper's Stop,
Bangalore. The Tie was made by
Zodiac for Shopper's Stop using
354 Mtr of fabric. The in store
event called the TIE FESTIVAL
had more than 20 National &
International Brands of Ties and
over 20,000 ties were on display .
in a special section exclusively
to promote the event.
The event was organized to
encourage IT professionals in
Bangalore to patronise Shoppers
Stop as well as catch up to the '
trend of buying tie as a fashion I

10.5 GROWTH OF IN-STORE PROMOTION

In-store promotion has grown substantially in recent years. There are several
reasons for this dramatic growth in-store promotion. First, consumers have
accepted sales promotion as part of their buying decision criteria. It provides
reluctant decision makers with an incentive to make choices by increasing the
value offered by a particular brand. Second, the increasing tendency of businesses
to focus on short-term results has helped spur growth in-store promotion, which
can provide an immediate boost in sales. Product managers also tend to view
sales promotion as a way to differentiate their brand from that of competitors
in the short term. Third, the emergence of computer technology has enabled
manufacturers to get rapid feedback on the results of promotions. Redemption
rates for coupons or figures on sales volume can be obtained within days.
Finally, an increase in the size and power of retailers has also boosted the use
of sales promotion. Historically, the manufacturer held the power in the channel
of distribution. Mass marketers utilized national advertising to get directly to
consumers, creating a demand for the heavily advertised brands that stores

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could not afford to ignore. With-consolidation and the growth of major retail ~ n - s t o r eObjectives,
Advantages and
chains, however, retailers have gained the power to demand incentives from Limitations
manufacturers to carry their products. Many sales promotions are designed to
provide benefits to the retailers.
Some of the most hyped and now controversial in-store promotion is "Valentine's
Day" where several brands try to woe the youngsters, especially imitation and
gold jewellery manufacturers promote with attractive offers. Several large retail
chains run contests and organize even live shows for promoting Valentine's Day.
Some of the other most popular in store promotions include Mother's Day,
Father's Day, Raksha bandhan, Diwali and Christmas.
About Apparel Store's In-store Promotion Activities

in uSing end of season sale twice in a year wherein discount given is upto
50% of the MRP (Maximum retail price)

wide range for men, women and children. Some store also offer home
furnishings, accessories and footwear, thereby providing coilvience for one
stop shopping. Examining the various terms and conditions of loyalty
programmes revealed that some rewards were quite complex and confusing
e.g lifestyle's card - Inner circle. The condition to be fulfilled is not clear
to a card member. For example, if any other promotions are prevalent then
purchase made during those promotions would not entitle for the card
reward points or not was not very clear.
All the stores used in store media to announce promotions .Use of only in-
store media would restrict the announcement to those who walk iKto the
store. Whereas variety of media used would enhance footfalls to the store
and trigger word of mouth.
Joint in-store promotions have advantages in terms of sharing costs of
promotions, cross-selling opportunities to each other's customers, high

In terms of type of consumer in-store promotions, almost everyone uses

discount, coupon programmes and few used lucky draws, contests, gift,
buy one get one free type of promotions. Only Pantaloon had a unique
scheme of an exchange offer which is normally prevalent in durable goods
industry. Retailing it to a cause donating old pairs collected in exchange
scheme to clarity would enhance the brand value among the consumers.
.-

Every retail outlet measures impact of in-store promotion activities by looking

at sales made during the promotional period. Few look at the footfalls,
conversion from footfall to buyers, average bill size during promotions etc.
The problem of isolating effect of different in-store promotions in a situation
of promotion overlap is not addressed. Rich database that a retailer
possesses is yet to be explored for further diagnosis and building future

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Retail Marketing and
Communication WILLS LIFESTYLE STORE EXPERIENCE
I
Wills lifestyle used the mix of publicity by providing opportunity to their
customers to walk down the ramp with leading celebrities at the launch
of their summer collection. Fashion icon Sushma Reddy and Nethra
Raghuraman, a leading dancer, participated in the fashion show. The unique
show, christened 'Fashion Factor', was organized for the patrons (loyal
customers).Every customer who walked into the showroom, irrespective
of age, was invited to the ramp to do his or her fashion statement in her
own style. The event began with the 'strike a fashion pose', where the
customers had to perform a catwalk and pose for the camera, and then
a written round with five questions called the 'fashion quotient' was
conducted to judge the customer's fashion IQ. The selected finalists were
asked to do the 'cool catwalk' in their choicest apparels that they could
pick up from the store followed by an interactive session with the super
models. In the end, the winners walked out smiling with attractive gift

existing customer base and also in attracting new customers through positive
word of ~ilouthof their own patrons and publicity in media.
PROIVIOTION WITH A DIFFERENCE
Globus has phased out the 'Redeemable Points' concept and brought in
the 'Privilege Points' concept and brought in the 'Privilege Club' concept,
where members are entitled to a slew of benefits and offers at various
exclusive outlets like nightclubs and restaurants in cities where Globus is
present. This has not only added newness to their promotional scheme but
also added value to their promotional programmes by extending the usage
of schemes across its set of retail outlets. It has provided them added
advantage to attract customers and retain the existing customer base.

Meet a particular store manager and find out why they undertake In-store
promotions? Explain with specific (product) examples.
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10.6 OPPORTUNITIESAND LIMITATIONS OF IN-
STORE PROMOTION
(i) Opportunities

Increase in sales by providing extra incentive to purchase. May focus

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 Objectives must be consistent with promotional objectives and overall ~ n - s t o r eObjectives,
company objectives.
Balance between short term sales increase and long term need for
desired reputation and brand image.
Customers can have fun, particularly with contests and demonstrations.
Reminder functions-calendars, T Shirts, match books etc.
Impulse purchases increased by displays
Contests generate excitement esp. with high payoffs.
It often has eye-catching appeal.
Themes and tools can be distinctive.
The consumer may receive something of value such as coupons of free
merchandising.

It helps to draw customer traffic and maintain loyalty to the retailer.

PROMOTION LEAD TO FOOTFALLS
Barista experienced 20% increased footfalls in the financial year 2002-
2003. Such impressive growth in footfalls is attributed primarily, to running
lot in-store promotions throughout the year and price cuts on offerings.
The netsales at the end of the year were a whoping Rs.60 crores, a 25%
increase over the last year's sales and average footfalls of 1.2 million a
: month.

(ii) Limitations
Consumers may just wait for the incentives
May diminish image of the firm, represent decline in the product quality.
Reduces profit margins, customers may stock up during the promotion.
Shift focus away from the product itself to secondary factors, therefore
no product differential advantage.
It may be difficult to terminate certain promotions without adverse
customer reactions.
The retailer's image may be hurt if corny promotions are used.
Sometimes frivolous selling points are stressed rather than retailers'
product assortment, prices, customer services, and other factors.
Many in-store promotions have only short-term effects.

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The Mall is the medium ( October '4,2006, ET)
Alongside the multitude flocking to empty their wallets in any shopping
mall, supermarket or hypermarket, there is another queue of people lining
up. Marketers of every hue and colour - banks, credit card companies,
cars, airlines, you name it - are trying to grab the opportunity to interact
closely with their target audience.
Be it co-branding activities with retailers, the selling of wall space within
outlets, signage's, end-of-aisle spaces, carry bags, trolleys or even in-
store TV - modern trade is acting as the medium for brands to connect
directly with consumers.
Retailers aren't complaining - it's a revenue stream that is fast becoming
a steady pipeline. At Shoppers' Stop, there is a separate teain at the
headquarters with one key person at the store handling in-store marketing
initiatives.
"It's an agent, not a driver of business for us. But even as we have grown
300% in the last five years, this business has grown around 600% in the
same time frame," says Govind Shrikhande, CEO, Shoppers' Stop.
Similarlv, at Pantaloon, there is an in-house team of around 18-20 people
headed by Sanjeev Agrawal, head - marketing, Pantaloon, that liaises
with advertisers as well as brands ex~lusivelyto organise the in store
promotions. .
And it's not just the brands which are retailed within Pantaloon formats
that advertise - even airlines, credit cards and banks are undertaking
on-ground activation initiatives. "By 20 10, we estimate revenues from in-
store selling to touch Rs 500 crore," reveals Agrawal.
For retailers, this means the formation of a regular revenue pipeline; for
brands it serves as a conduit to directly interact with the customers.
"There is a growing realisation that brands have to be built in a retail
environment, and therefore brands undertake activation initiatives to engage
customers," says Deepak Jayaram, director, Dmart, a retail specialist unit
of media specialist GroupM which takes care of in-store promotions.
Jayaram believes that retail will eventually become an important medium,
helping expand the advertising pie. "The shift could be from out-of-home
to retailing. Then, slowly, the medium will start influencing local press,
radio and even cable TV within a specific geography," explains Jayaram.
Adds JayaramMWithclose to 2 million people coming to our formats every
week, we can give marketers various avenues to tap the potential," says
Agrawal. He adds the idea is to generate profits by maximising the retail
space as well.
"Within an outlet, there are many opportunities like signage's, end-of-the-
aisle promotions, wall space and even trolley stickers which brands are
looking to take up," he says. "It's about space selling or space value
enhancement," says Shrikhande, adding that in any category, consumers
have no restriction on the choice of brands.

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 In-store Objectives,
"So if at that time a brand can connect with the consumer, it's nlore likely Advantages and
Limitations
to hit bull's-eye. That's what modern trade allows brands to do." Similarly,
Barista Coffee Company understands the potential of its outlets across
the country.
A Space Odyssey "With 1.2 million walk-ins a month and a target audience
largely in the 19-30 years category, there are many brands that are looking
to form long-term and short-term promotion-led associations with us,"
says Partha Duttagupta, CEO, Barista Coffee Company.
Citing the example of Barista's alliance with Hutch, he says that the service
provider has its advertisement on the wall of the odtlets. "For Hutch it is
communication with the right target audience. That's why they have
advertisements along with value-adds like charging outlets and kiosks.
For us, it's about providing value-add to our customers," he says. Again,
the Sound of Barista radio has been rechristened Barista World space -
in alliance with the satellite radio station. "In such alliances, we get a fixed
sum plus the number of outlets in which the brand will undertake
prombtional activities," Duttagupta explains.
Retail spaces are being increasingly utilised to undertake short-term activities
like launches and co-promotions. Arvind Mediretta, head - marketing,
Yum Restaurants, says that in all tie-ups, care is taken to ensure that there
is synergy between the two brands.
"Tie-ups like the KFC deal with Nerolac Paints to promote the latter's
product with Disney characters within KFC outlets have definite synergies.
Similarly, there are television programmes looking to create buzz by
conducting activities within our outlets," he says. Retailers, however, are
clear that any co-promotion activity cannot be at the cost of their customers.
"They should be non-intrusive and should add to the consumer's shopping
experience," Duttagupta insists. While everyone seems to accept that on-
ground activation is here to stay, the jury is divided over the latest innovation
in at-the-mall communication - in-store TV. Retailers like Spencer,
Shoppers' Stop, Barista and Pantaloon are all evaluating in-store TV, and
it's taken even international observers of Indian retail by surprise. "It is
surprising that in-store TV is picking up in India, while it's still a very
recent phenomenon even in a market like the UK," says Tim Sleep, Ernst
& Young head of retailing, UK. Sleep attributes the rise to the low cost
of technology and the mushrooming of multi-brand outlets, where the
potential of in-store TV is bigger than in single brand retail outlets.
Retailers, for their part, believe that in-store TV will compliment on-
ground activities like co-promotions, wall signage, trolley stickers and
carry bag stickers. "Primarily, the medium will be utilised to drive
promotions for brands within the outlets. But even brands which are not
retailed at the store but are targeting a similar audience profile will also
be given airtime to promote their products," explains Shrikhande. While
there's no argument over the potential of on-ground retail initiatives among
marketers, the pros and cons of in-store TV are still being debated. To
start with, content on a dedicated channel has to be customised. Unlike
watching television or movies, which is 'captive', retailers have to contend
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Retail Marketing and
Communication with a target audience that is constantly moving across the store. Therefore,
attention spans will not be greater than 2-3 minutes. Barista's Duttagupta
says that non-advertising content could range from running Charlie Chaplin
movies to coffee education clips. Similarly Shoppers' Stop is looking at
content ranging from home makeover advice, personal care tips and recipe
shows as part of the programming. "It has to be short and sweet," says
Shrikhande. Manish Shukla, founder, Retailscape, a design and consultancy
firm, adds, "Retailers have to keep in mind that their content will be
competing with content available with over 200 television channels.
Customisation is critical."
Jayaram of Dmart says that retailers will have to ensure the right tweaking
of the message. "Programming will have to be divided into the television
equivalent of day parts, where programming is targeted towards specific
segments of the customer base," he says. Another question up in the air
is, what happens when retailers have store brands that compete with
those of marketers. And lastly there is the problem of dividing airtime.
While some retailers believe that the commercial airtime can be divided
into advertising for in-store brands as well as third-party advertising, some
are focusing more on selling airtime to brands which are present on their
retail shelves.
Regardless of whether in-store TV takes off or not, there is consensus
that on-ground activation is here to stay and will, with time, account for
larger and larger slice of the advertising pie.

10.7 LET US SUM UP

available, range of merchandise and choices, the need to differentiate has become
necessary through IN STORE PROMOTIONS and exclusive bundled offer on
brands. For example on purchase of 36 inch Sony Bravia series LCD TV's you
get a home theatre system free. While it's true that the company would have
included indirectly the cost of the freebies; the customer gets an opportunity to .
enjoy viewing the TV with a near theatre effect at home. Companies come up
with various such promotions including discount coupons, Sweepstakes, price-
off deals that tempt customers to avail the opportunity. While the objectives of
the sales promotion is met through higher sales, these promotions also enhance
foot falls in the store, thereby giving opportunity for the store to make additional
sales through impulsegurchase customers make during such events. Mega sale
events like the DIWALI SALE, CHRISTMAS SALE, And NEW YEAR SALE
are few major foot fall events for stores and they make most of it during the
period. The plastic money (Credit cards) are liberally used by customers taking
advantage of 0% interest schemes retailers offer through tie up -with major
credit caid issuing companies. These festivals are major events for tourism sale
since many travel agencies offer "FLY NOW PAY LATER" scheme inducing
customers to fly to popular tourist destinations. While the advantages of IN
STORE promotions are large there are very few limitations in customer spending

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