Popular terms and concepts in Retailing & Retail Marketing

1.      Slotting fee: A slotting fee, slotting allowance, pay-to-stay, or fixed trade spending is a fee charged to producer companies or manufacturers by supermarket retailers in order to have their product placed on their shelves. The fee varies depending on the product, the manufacturer, and market conditions.

In addition to slotting fees, retailers may also charge promotional, advertising and stocking fees. Many retailers earn more profit from agreeing to carry a manufacturer's product than they do from actually selling the product to retail consumers.

Many argue saying that slotting fees are unethical as they create a barrier to entry for smaller businesses that do not have the cash flow to compete with large companies.

2.      Push money: Push money is a special incentive that is offered to a retailer in exchange for focusing sales efforts on a particular product or brand of products. This incentive may take the form of a special commission for all generated sales related to the specified product or brand, or come in the form of some other type of compensation, such as a paid vacation or holiday.

3.      Point-of-purchase displays, or POP displays: are marketing materials or advertisements placed next to the merchandise it is promoting. These items are generally located at the checkout area or other location where the purchase decision is made. For example, the checkout counters of retail stores are cluttered with cigarette and Chocolates and many other impulse purchase category items.

4.     Point of Sale (POS):  refers to the area of a store where customers can pay for their purchases. The term is normally used to describe systems that record financial transactions. This could be an electric cash register or an integrated computer system which records the data that comprises a business transaction for the sale of goods or services

5.     Mom and Pop stores/Kirana shops: A small, independent, usually family-owned, controlled, and operated business that has a minimum amount of employees has only a small amount of business volume and is typically not franchised, therefore open for business only in a single location. Typically running on a very tight budget and wafer thin margins they are profitable only because the entire family pitches in and run it as a business.

6.      Brick and mortar store:  refers to retail shops that are located in a building as opposed to an online shopping destination, door-to-door sales, kiosk or other similar site not housed within a structure. Brick and mortar are the traditional touch, feel and tryout type of supermarkets. They are real and not virtual.

7.      Planograph: Visual description, diagram or drawing of a store's layout to include placement of particular products and product categories.

8.     Comp sales: Comparable-store sales is a measurement of productivity in revenue used to compare sales of retail stores that have been open for a year or more. Historical sales data allows retailers to compare this year's sales in their store to the same period last year.

9.   Cyber Monday: Cyber Monday is one of the busiest shopping days of the year for online retailers. This comes after the Thanksgiving weekend. Retailers notice a spike in sales on this day as many consumers who were too busy to shop over the Thanksgiving weekend or did not find what they were looking for, headed to the web on Monday from work or home to find bargains.

People Greeters at Walmart - A Dead concept

Sam Walton first saw a greeter at a small Wal-Mart in Louisiana in 1980. The greeter, explained to Walton that he had a "dual purpose” - to make people feel good about coming in, and to make sure people weren't walking back out the entrance with merchandising items  they hadn't paid for." The manager of that Louisiana Wal-Mart store was trying to reduce shrinkage at the store -- shop-lifting.

Walton was very fascinated with the double-agent role of the greeter: the 'hello' coming in, the 'cop' going out.

Sam Walton himself did not talk much publicly about the cop side of the greeters. Wal-Mart later used the concept of greeters to give employment to sections of people who can’t find employment easily. Many retirees and ex-servicemen found jobs as “people greeters”. This later was extended to under privileged and disadvantaged groups including the senior citizens.

But now the fun apparently is over. Sam Walton's "greatest idea" is dead -- apparently a victim of the recession -- several thousand greeters are coming in from the cold outside, to circulate around inside the store, helping customers find the products of their choice, and other useful functions.

Thus ends the 32 year run of the Greeter. Most shoppers at Wal-Mart understood that the smiley folks in the vest with "How May I Help You?" on the back were just disguised members of the loss prevention team at Wal-Mart -- a reminder that cheap goods not only attract shoppers, they attract criminals as well.

Best advertisements - SBI debit card and Reliance Mobile advertisements

SBI (State Bank of India) Debit card: An advertisement that stands out. It is a simple, no frills advertisement. A man walks out of an ATM and the Debit card (animated) says “why is that you use me only for drawing cash. Why don’t you use me for making purchases, online payment and for shopping?” I would say a brilliant advertisement. Many of us are still very scared of the Debit/Credit cards and use them very sparingly. We use it only to draw cash. In other words instead of drawing money from a bank’s teller we draw money from the ATM.

Research has shown that people spend less money if they have to count out cash and pay. And having cash also inhibits impulse purchases. As the bank that has the maximum number of credit/debit cards it makes sense for SBI to go in for such a campaign. Using the credit/debit card increase the spending. SBI makes money. It can collect money from the vendors where the cards where used. SBI makes money. It is easier to pay by card and if one pays by card again SBI gains. SBI is the biggest bank in India and that means more money in circulation. SBI would literally laugh it way to the bank – its own bank!

watch the advertisement at http://www.youtube.com/watch?v=SHy3U-vSY1k

Reliance mobile: India is one country where pre-paid connections in mobiles outstrip the post-paid connections by a huge margin. Prepaid is almost 4 times the size of post-paid. Pre-paid has many advantages. The customers can use it as much as they want and then they can control the usage. For example a customer can say ‘Rs 300/- is my monthly target’ and  take a pre-paid service, Once the Rs 300/- is exhausted he becomes cautious and uses the mobile only as a incoming call answering service.

Most companies make money on customers who use the service more frequently and pay more. Now a days lots of service are being used MMS, SMS, Internet, Incoming, outgoing, roaming etc. Reliance has come out with an interesting package. It is the Prepaid of the post paid  called unlimited post paid plan- That is unlimited usage and of any service for only Rs 1299/- per month.

The advertisement too is brilliant. It talks of a boyfriend/husband who tries in vain to increase the post-paid mobile bill of his wife/girlfriend. He uses all the services and that to very liberally. To his surprise and to the delight of his wife/girlfriend the bill is only Rs1300/-. ‘No it is Rs1299/’- says the smiling lady ramming in the psychological aspect of a sub 1300 rupees bull.

watch the advertisement at http://www.youtube.com/watch?v=DtSHw2fwcmM

Similarly Reliance has come out with a concept of a one family plan called all share plan. One family plan is a plan where the entire family can take a plan and share the expenses. An interesting concept I would say. This is rammed in by the advertisement where the daughter explains to her brother that he is not part of the plan as he is not their parents’ real son.

She goes on to explain that he was found on the steps of a temple. The crestfallen boy tries to slink away to his room. His sister then explains to him that the entire thing was a joke and that that he too is part of the family and he would be part of the family pack service from Reliance mobile. 

http://www.youtube.com/watch?v=xbWUUD9jRoM

Advertisements that could have been better - Limca, Spirite, Olyx, Fast Track Bags and Havells Geyser

Five not so good advertisements that have been aired recently

Limca: Marketing pundits have told us that instant gratification is the best thing. That is consume the product the minute the urge hits you. Instant need/want and instant gratification is the buzz word. Thus it is surprisingly to hear a husky Kareena Kapoor say “Tum na Thodi Pyaas Badhoo – You there – why don’t you increase your thirst”and she takes the Limca bottle away from the cricket player in the latest Limca advertisement. So is Limca only for the very thirsty people?

But isn’t Limca missing a trick. I would rather have a product that I would consume many times a day rather than have a product that is only consumed when the urge becomes desperate. The point here is about the postponement of the gratification.

Watch the Limca advertisement at http://www.youtube.com/watch?v=RbjFqxso2pg

Olyx on line web site:The site is about online buying and selling of products. The advertisement opens with two teenagers talking about the old things that they have become obsolete, which they want to dispose of. They talk about the old PC at their home.They remark ‘it has become old’. The father who overhears the conversation pipes in “when I become old tomorrow will you dispose me off too?” One of his sons shrugs his shoulder and says “Okay but the offer is Rs 6,500/-”   The father says “Sell it” Of course we all know that they are talking about the computer.  But I have a sneaky feeling that it looks very much like as if they want to dispose off their father! Not very clever I would say!

Watch the Olyx advertisement at http://www.youtube.com/watch?v=5F-bfavddq8&feature=relmfu

Fast track bags:an advertisements that is so bad that it becomes very good. It gets talked about. May be it was a deliberate attempt to shock people to talk about the product. If it was a deliberate attempt it surely succeeded. It was yanked off the air! The advertisement is about a girl who had made it out with her boyfriend in the night in the boys’ hostel. The next day morning she wakes up. She is shocked. She is naked. She struggles to get into her clothes. She is shown wearing her clothes one by one. The last piece of assessory as she escapes is her bag and presto is a Fast track bag.

This advertisement left me confused. Does Fastness mean boldness nee brazenness? Does fastness means throwing morals to the wind? All in all an advertisement that leaves a bad taste in the mouth and is definitely not for family viewing.

Watch the Fast Track bags advertisement at http://www.youtube.com/watch?v=dQcofWKpEEA

Spirite: Spirite prides itself as a no nonsense brand. Sprite advertisements are laced with the right amount of cynicism and smart alerkiness that the present youth simply love. The advertisement in contention is the one about the pretty girl and a lift being offered to her. A smart man (obviously) a Spirite drinker offers her a lift. Before she can accept his offer a swanky car stops by and a voice hails “Hey baby want a lift?” The Sprite drinker does a quick retake and offers a lift to an old lady at the bus stand. The pretty lass says to the old lady “You go in the car; I will go with in the motorcycle”. 

The advertisement ends with the pretty girl on the motor bike and the old lady in the car. My contention is the car would have accommodated both the old lady and the pretty girl. The Old lady could have got into the back of the car and the pretty girl could have sat in the front. That way the car owner could have the cake and eat it too!

Watch the Spirite advertisement at http://www.youtube.com/watch?v=gCmdR-C2ewI

HAVELLS GEYCER: The latest advertisement of HAVELLS geyser too is a harbinger. It shows a man who is brushing his teeth in the bathroom. He looks at the geyser and gets annoyed. He chases his son who just came out of the bathroom. The boy runs towards his mother. The annoyed man pulls both his wife and his son to the bathroom. He points out to the geyser. His wife shrugs her shoulder and says “well it is off” Her husband says “that is the point - why is it not on”. The voice over booms “HAVELLS geyser - When it consumes only half a unit of electricity per day – why should it be off”

This is the catch. We shout from the rooftops to save energy and here is an advertisement that is telling us to keep the geyser on for 24 hours. I don’t know what our electricity conservation societies and action groups have to say about this type of promotion. It makes the point but ½ a unit of electricity is still 15 units of power per month only for water heating. Real food for thought.

Watch the HAVELLS Geyser advertisement at http://www.youtube.com/watch?v=t0d_yKqY75Y

A Rose is a Rose is a Rose - Company Names!

I am reading a Classic book the 22 immutable laws of branding by Al Ries and Laura Ries, when I was stuck by a thought. ‘A rose is a rose is a rose’ said by Gertrude Stein as part of the 1913 poem Sacred Emily,. In marketing a name is everything. It is the soul and the identity of the company. Just consider.

Kodak the company that owned the space of Instant photography in the minds of the customer has fallen in bad ways. The naming of Kodak was very interesting. It is said that George Eastman researched the world to find a word that means nothing. Yes you have read it right. Kodak does not mean anything in any language. It is a totally neutral word with no negative connotations in any language.

One of the most intelligent and loyal breeds of dogs is the GSD - German Shepard Dog. So why is it called GSD? We have to go back to the Second World War II for the answer. After the second world everything German was hated. A breed named German shepherd dog was doomed. The German shepherd dog breeders did two things. They started calling the dog the Alsatian, and started putting the word GSD next to it. Thus the breed was being referred as Alsatian (GSD).  In India even today the short haired version of the German shepherd dog is called an Alsatian and the fully hairy version is the GSD or the German shepherd dog. Luckily the other top German dog breed has no such issues. Any guess about the breed – infallible and indomitable – Doberman Pincher.

Similarly Kentucky Fried Chicken shortened it name to KFC. Not only does it sound stylish but it also hides the dreaded five letter word that the Americans dislike FRIED. The Americans fed on the images of lean, trim and lean bodies knows that fried food is not good for health. But that is what made KFC famous in the first place. It was the juicy fried chicken. In the recent years KFC has realized its mistake. It is wooing the customer unabashedly flexing its USP its Fried chicken. There is even talk that the company is bringing back the name Kentucky Fried Chicken.

One company which was forced to shorten its name and got it right was 3M. Originally named Minnesota Mining and Manufacturing Company the name made no sense in the changed times. The company was in many businesses not connected to either Mining nor manufacturing. That is how Minnesota Mining and Manufacturing Company became 3M. 3M is known as innovation factory and is credited with winners like Post It stickers.

Heineken the world famous beer is from Netherlands. It is often mistaken as to being from Germany the country famous for beer. Heineken was lucky that the largest selling beer in Germany is Warsteiner. A German beer with the name War in its name is not going to be a big success in world market. Austria has an amino acid based, caffeine injected, carbonated drink called “Roter Stier”. A very difficult name for the customers to remember. The rechristened name was a marketing coup of sought – Red Bull. Red Bull has become a market leader in the energy drinks market.