NNFA Northwest Region

ADVERTISING

Advertising is a tool that enables retailers to inform potential customers about their stores, the products they sell and the benefits derived by using them. There are two broad categories of advertising; image advertising and product advertising. Image ads are broad in scope and inform the public about general aspects of the business such as location, hours and broad product categories. Product advertising informs the public about specific products and may include a call to action, such as an invitation to buy products on sale.

Retailers often use a variety of advertising tools and their choices depend on the size and number of stores and the market they are trying to reach. Following are some examples from retailers within the Northwest region.

Vikki Solberg, co-owner of the Natural Pantry in Anchorage Alaska, has tried a number of strategies. The two she seems most enthusiastic about are radio and in-house advertising.

Radio advertising, through a show sponsored by Enzymatic Therapy, has been very successful. According to Solberg, it has been so successful that one time when Natural Pantry’s ad went on the radio their business doubled.

Their success with the daily newspaper, on the other hand, has been limited. Solberg thinks it’s because they are competing with the big grocery ads.

Television advertising was tried by the Solbergs, but turned out to be too expensive for the small return.

The other advertising that works for the Natural Pantry is in-house advertising. The staff hands out fliers and sample-sized products to customers. This, combined with the seminars and food demos, keeps customers trying new things.

Like many retailers, the Solbergs use a ready-made newsletter and add their name and address to the front page. They mail the newsletter to a computer-generated list of names compiled from business cards that customers put in a fish bowl in their restaurant and from cards customers fill out when making a purchase.

Added to the advertising tools used by the Solbergs is a solid public relations effort. They reach out to the community with creative seasonal attractions such as Thanksgiving food tastings, bread baking contests and school demonstrations.

When Carol Simontacchi was the owner of seven Health Haus stores, she used a strategic advertising approach to position Health Haus stores in her market and to increase new customer traffic in the stores.

In 1996, she developed the Partnership Marketing Plan, a 52-week program developed to provide partnering vendors a venue for consumer product education plus a supporting radio and print advertising drive to increase product sales during promotional periods. Health Haus designed a variety of packages for vendor buy-in to the Partnership Plan so that the smaller-volume partner had the same options for store-level support as the larger players. In the first year, about a dozen vendor partners participated in the plan at various levels.

One of the key instruments used to measure the success of the program, aside from sales increases, was to track specific product turns and customer transactions in the stores. In reviewing the results, the number of average monthly transactions increased in the stores by nearly 30%. The average monthly purchase with vendor partners increased by an impressive 58%. This success is attributed, in part, to significant vendor training for all staff and managers along with promotional execution at the store level.

Dick Patricelli, co-owner of the three Nature’s Pantry stores, says their marketing philosophy is simple. Since all their stores are in the same geographic area, it doesn’t make much sense to use media that goes to areas where they don’t have a store. It’s not cost effective. This eliminates radio, TV and larger circulation newspapers, as well as minimizing yellow pages. It narrows their concentration into local newspapers and direct mail newsletters.

A newsletter can either blanket a specific market area or it can be used to go direct to recorded customers of their store. Dick says they have used both approaches and the direct approach is the best.

Regular use of newspapers has been okay, Dick says, but not as good as a direct mail piece to their customer mailing list.

Dick says he found out how important their newsletter mailings were a year ago when they pulled back from their regular quarterly mailings, skipping two quarters in order to save money. They had opened a new store in the same market area and thought that customers switching stores to shop closer to their homes was the reason for the drop in sales in their original store. Sales became very flat.

In the meantime, Nature’s Pantry spent $13,000 on a direct mailer to new households in the area of their new store. The mailer drew zero response. It was, according to Dick, the best mailer they had ever done, but it didn’t matter. It was the wrong market to get results. It was a great disappointment to them, as well as a financial disaster

In October of 1996, they went back to what had worked for so many years. They put together an 8-page newsletter with their discount coupons, many free seminars, and their regular informative articles. Their customers came back strong and have not stopped yet. Business has been up from 15 to 25% in each store since then. Needless to say, they are not interested in interrupting their newsletter mailing again.

The Nature’s Pantry newsletter is very personal and they often write about their staff and local happenings to keep it that way. The discount coupons are a great motivator for customers to come into the store and Dick says they get static from the customers if the coupons don’t arrive when they expect them.

Nature’s Pantry still does some newspaper advertising, but their total advertising budget has not succeeded the 2% of sales industry average.

For most retailers, newspaper advertising, yellow pages and direct mail, mostly in the form of newsletters, are the media of choice. Larger operations are more likely to use radio and television. Following is a discussion of some of the advantages and disadvantages for each of these mediums.

Direct mail is a targeting medium. It is any type of communication that is mailed directly to households. The mailing can be to a targeted list of individuals or to unidentified residents in a particular area.

• Research has shown that carefully targeted direct mail advertising is the most cost-effective way of advertising. The cost "per impression" maybe high, but the message is more likely to reach the intended audience and there is less waste.

• The message can be targeted demographically, geographically, or to lists developed by the retailer.

• When you target direct mail to your own customers, direct mail reinforces loyalty and allows for more in-depth communication.

• Direct mail can increase buying when used to remind customers of seasonal needs and sales.

• When targeted to non-customers, direct mail can be effective for informing customers of your location, hours and product selection.

• The cost per impression is high.

• Direct mail must be carefully written and executed to avoid being lost in the "junk mail."

Print advertising consists of newspaper and magazines advertising. For most health food retailers, newspapers would be the preferred choice over magazines. Newspaper is a reach medium.

• One ad can reach a very large circulation.

• The impact of a well-designed ad can he dramatic. Newspaper ads are more likely to have impact in smaller communities.

• Newspapers are timely. They provide a call to action on the part of the consumer.

• The cost per ad in large circulation newspapers is high. To be effective, the ad should run several times.

• Small space ads generally get lost in the advertising "clutter."

• The life span of a daily newspaper is usually under an hour.

• So many ads appear in a single issue of a newspaper (63% of the average daily paper) that the potential for any one ad to capture reader attention is minimized.

• The advertiser has little control over the position of the ad. Placement can determine how many readers will see the ad.

Television is a reach medium.

• Television is a high impact medium. The majority of the people in the U.S. watch at least some television each day.

• Television allows for targeting of broadly defined groups such as women between the ages of 25 and 45. Ratings for particular networks and individual shows make this targeting possible.

• Television advertising lends credibility to a business because it makes the business appear to be successful.

• The cost of producing a quality television spot and purchasing airtime is relatively high.

The costs may be prohibitive for a single small store. It will be more feasible for a large store or a company with multiple stores. Local cable stations are more affordable.

Radio is a frequency medium.

• Radio is good for generating recognition for a name or brand. It is best used for a situation that involves immediate response to an offer, such as a sale.

• Radio allows for repetition of your message and for broad targeting to demographic segments who listen to particular programs or stations.

• Topical radio shows allow retailers the opportunity to educate and inform consumers.

• Free public service announcements offering health information may be a more realistic goal for small retailers.

• Like television, radio is often cost prohibitive for a small store. There is also a waste factor with radio because it reaches beyond the area where the store is located.

• Paid radio advertising spots must be short and don’t allow for elaboration on a message.

Yellow pages are a locator medium.

• Research has shown that yellow pages are one of the most cost-effective forms of advertising for a small business.

• Yellow pages advertising can be placed selectively in the directories that serve the store’s target area.

• Creative costs are minimal, even for display ads.

• The advertising is purchased for a full year and is retained by most households.

• Yellow pages are effective for informing the customer about location, hours and product selection.

• Yellow page advertising is becoming more aggressive. In order to obtain a favorable position and to have a high visibility ad, a more expensive large-size display ad may he required.

• Enlist the help of an experienced professional when developing your ad campaign. To save dollars on future print ads, hire a professional to design a great looking logo and "shell" ad. This can be used repeatedly and you can enlist the help of your newspaper’s advertising professionals to fill in your ad copy.

• Invest enough in your advertising to allow your ads to run long enough in the same medium. Advertising experts say that it takes a minimum of seven impressions before a consumer gets the message. This applies to each of the advertising mediums.

• Keep a consistent look to your advertising. When using any particular medium, you want all the ads to look related, like they belong to a family. The effect of the advertising is cumulative and you can build brand recognition by developing your own distinctive look for your advertising. Even when using a variety of media, you want the consumer to identify that it is your store advertising, even before they read the copy.

• Don’t gear your advertising only to those who know you (your customers). You want to use your advertising to convert those who do not normally shop in health food stores to new customers.

• Tell the customer what they will get if they come to your store, such as the largest selection of herbs in town, or a full beauty care section with an esthetician available to help with product selection.

• Target your advertising to the shoppers whom you want to attract. Don’t make your advertising focus to sell products or to emphasize price alone; sell benefits and solutions. You will bring in new customers by helping them to prevent or to solve health problems.

• Some non-price advertising options are: seasonal solutions such as allergy, holiday blues, summer diets; events such as product demos, cooking classes, speakers, etc.; positions on relevant issues such as pesticides in food, hormones in meat, food irradiation; educational ads, comparing the health virtues of various products; and special store features and services such as a consulting naturopath, or spa services.

• Make your advertising statements memorable.

• All advertising statements should be true and not misleading.

V Have you kept your message to 30 or 60 seconds?

V Does the opening catch the listener’s attention right away?

V Is your message concise and snappy?

V Is your message memorable? Have you focused on benefits and solutions?

V Will you use a professional announcer to ensure professional quality?

V If you use background music, is it appropriate for your target audience? Have you bought enough spots to make the campaign effective?

V Are you using a station or program that includes your target audience as listeners?

V Have you focused on benefits and solutions to the consumer?

V Have you given the reader a reason to visit your store? Have you kept the layout simple? If you used a photo, is the quality good and is the photo large enough?

V Is your headline positive?

V Will you run your ad series at least eight times?

V Have you included your store hours, phone number and location?

V Are your store name and phone number the most prominent elements in your ad?

V Did your ad include directions or a map indicating the location of the store?

V Did you include your store hours?