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Analysing Existing Trends of Space Selling

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Published: Wed, 21 Feb 2018

Abstract

If an ad is created and placed in the media, the costs of creation and time or space in the media must be paid for. This is a major area in which advertising departs from public relations. Advertising doesn’t have that problem. If time or space is bought in the media, the ads (as long as they follow the guidelines set down for good taste, legal products and services, etc.) will appear. The drawback is that ads are clearly designed to extol the virtues of products and companies, and any ad is perceived by consumers as at least partly puffery. There are two basic ways to sell anything: personally and non-personally. Personal selling requires the seller and the buyer to get together. There are advantages and disadvantages to this. The first advantage is time: the seller has time to discuss in detail everything about the product. The buyer has time to ask questions, get answers, and examine evidence for or against purchase. A second advantage of personal selling is that the seller can see them. Finally, the seller can easily locate potential buyers. If they enter a store, they probably have an interest in something that store sells. Street vendors and door-to-door sellers can simply shout at possibilities, like the Hyde Park vendors who call out. From there on they fit their message to the individual customer, taking all the time a customer is willing to give them. From the above, it appears that personal selling is much better than advertising, which is non-personal. This is true. Advertising has none of the advantages of personal selling: there is very little time in which to present the sales message, there is no way to know just who the customer is or how she is responding to the message, the message cannot be changed in mid-course to suit the customer’s reactions.

Products, services or ideas are the things that advertisers want consumers to buy (in the case of ideas, “buy” means accept or agree with as well as lay out hard, cold cash). However, there is more involved in products or services than simply items for purchase.

A product is not merely its function. It is actually a bundle of values, what the product means to the consumer. That bundle may contain the product’s function, but also the social, psychological, economic or whatever other values are important to the consumer.

 

Chapter 1: Introduction

In an era when physical tail space is still at a premium, constrained by planning restrictions and rising costs, productive use of space is a key indicator of buying and merchandising success, and high space productivity depends on offering the right range, in a logical layout, with products available and easy for the customer to find. Decisions about how much space to devote to each product line and its location in the store play an important role in the pursuit of merchandising success. The aim of this chapter is to provide an insight into this process.

1.1 Space selling management:

Space selling constraint applies to all retailers, but in non-store retailing the constraints are different. A mail order retailer, for example, has page space and the number of pages in a publication as constraining factors, whilst a TV shopping channel needs to break down the airtime to different products. However, internet retailing offers great opportunities for adding space without much additional resource input. The main constraint on the amount of space used in a virtual outlet is the customer’s attention span. In spite of this additional freedom, the objectives of space allocation are essentially the same no matter which retail format is used.

The management of retail space is concerned with a number of key objectives. The first is to optimize both short-term and long term returns on the investment cost of retail pace. The second is to provide a logical, convenient and inspiring interface between the product range and the customer. This can be particularly important in a large store, where customers can quite easily become overwhelmed and lost. Another objective is to make sure that the right selection of products is available; that products fit into the retail space and that stock-outs are avoided. Choice for the customer is maximized when the best selection for them is put into the available space. Space allocation aim has an important role to play in communicating the retail brand, When ice is managed centrally it helps a chain of retail outlets to achieve visual consistency, so that customers arc reassured by the similarity of the store layout and shelf appearance.

1.2 The Space Management Process:

A retailer goes through a number of stages when allocating space to products. These four stages will they used as a framework for the Inclusion of discussion topics within this chapter.

Measuring Space Selling:

Although space in a store outlet is three dimensional, retail space is often measured in square, rather than cubic units, Square units arc appropriate where, for example in fashion retailing, a variety of single tier fixtures stand on the shop Iloor (see FigureS. I). Many fixtures, however, arc multilevel and so more appropriate ways of measuring space to allocate might be on the basis of linear or cubic footage (see Figures 8.2 and 8.3). Measurements of space that are more specific to individual retailers might be useful, such as the number of pages to be published in a catalogue or the total number of fixtures available in an outlet.

Space Productivity:

The two principal measures of retail success arc sales and profits. Sales volume and profitability can also he measured in relation to the amount of space used to generate those levels of sales and profits. This can then be compared with the level of financial investment in that space. The resulting measures express the productivity of retail space. Sales (or profits) per square meter is a commonly used measure of retail space productivity, which is an important concept in the evaluation of retail product management performance.

Dividing the space into selling areas:

At this stage, space management is concerned with allocating space to different product areas, defined according to individual retail businesses, but usually on the basis of product (department or category. The amount of space will he determined to a greater extent on previous performance indicators, typically sales values. However, sonic products, because of their physical characteristics may need disproportionate amounts of space in relation to sales. In a department store, home furnishings may need a relatively large amount of space to generate a good level of sales because the products are bulky, a large variety of merchandise is needed for customers to choose from and a lot of display space is needed to do the product justice. On the other hand, jewellery is a high value product category that needs relatively small amounts of space for display and selling purposes. The stage a product category is at in its life cycle is likely to influence the space allocation at this level. If a category is growing, then more space should be allocated, whereas a declining category needs to have its space rationalizes.

Measuring selling space using square metres

Using linear measurement for space selling

Using cubic measurement for space selling

Typical €˜hotspots’ In a Space selling

Particularly evident in department stores, where specialist products such as furniture and home entertainment, as well as hairdressing salons and customer service department’s  located on basement or upper floors, Customer flow can also be encouraged by locating high demand items throughout the store layout, with plenty of impulse items located in between. Retailers need to find a balance between maximizing sales of high demand products, generating flow around slower selling products (which may have higher profit margins), and providing logic and convenience in the layout for the customer,

Product adjacencies:

A logical route through the different product categories or departments is part of a customer focused offer, and can encourage linked sales. For example, in a baby equipment retailer like Mother cares it makes sense for merchandise to be grouped into themes for space planning purposes. These product themes are then presented in a logical way to the customer as they move through the store. Products for immediate needs, such as feeding and general baby care come first, followed by bath time and clothes; and then on to the more expensive, one purchases in the travel and nursery departments.

The barbecue season provides a good opportunity for retailers to generate interest and sell distinctive groups of complementary products. Some of these products are strictly seasonal: the barbecues themselves and the briquettes for example. However, other products can be given additional space allocations in the seasonal aisle as part of the €˜barbecue category’. Firelighters, matches, marinades, sauces, disposable tableware and beer are products that are found around the supermarket throughout the year, but are given a boost In the barbecue season by being merchandised as complementary goods.

It is estimated that guests take an average equivalent of eight drinks when they are Invited to a barbecue, and €˜studies (bulk packed small bottles of beer) are particularly popular for barbecues as they are easy to handle, €˜women friendly’, and easily chilled. Whilst the majority of barbecue beer is bulk purchased In advance from supermarkets, and then chilled down at home, convenience store retailers are often used for guests to buy drinks en route, and so providing chilled beer becomes important for this type of retail format.

Allocation space to individual product:

Having made a plan for the layout of departments or categories within the retail outlet, the next stage is to make a decision about exactly how individual product lines should be displayed within the outlet, whether the product is going to sit on a fixture, or be represented by a photograph within a page spread. Various approaches to space allocation are discussed, for example by using sales or profits as a guideline, some practical challenges arc considered, and the relationship between category management and space allocation is explored in this section.

Allocating space on the basis of sale:

The guiding principle here is the more a product sells, the more space it should be given. Retaining a high stock service level will depend on retailers ensuring that they devote enough space to a high demand product, such as milk, to prevent replenishment of that item becoming inefficient and inconvenient to the customer. A fast selling item however may not be one that a retailer makes much profit on (again milk is a good example), and so they may decide to allocate more space to their profitable lines. In taking this approach, however, the retailer is likely to encounter the problem of not devoting enough space to fast moving lines, so a balance has to be achieved. Another decision that has to be made is which €˜sales’ figure should he used for the allocation exercise, Alternatives are historical sales figures (for that outlet); market share figures; or projected sales figures.

Store A is a branch of clothing retailer XYZ in a medium sized town centre. Ten miles away there Is a regional shopping centre where branch B Is located and twelve miles In the opposite direction, branch store C Is located In the heart of a city centre shopping complex. The policy of retailer XYZ is to offer a returns policy In all of its stores for products bought in any outlet nationwide (including those purchased from its web site). Shoppers from the town where store A is located, often take shopping trips to the neighboring centres, where B and C are located, especially if they are wanting to make a major purchase such as a coat or a suit, and require a wide choice of retail stores to select from. Unfortunately for store A, any unwanted products usually end up being returned to the customer’s local store. This has the effect of distorting the sales figures for store A, upon which space allocation decisions are made. Unfortunately, the retailer’s information system does not recognize the difference between a returned garment from the original store and one returned from a different outlet. In order to counteract this problem, which can be quite widespread, a retailer would need to allocate space on the basis of estimated sales rather than historical sales.

Space elasticity:

Allocating space according to a measure of sales assumes that there a relationship between the amount of space and the rate of sales, this relationship is termed the space elasticity of a product and it refers to the extent to which the sales of a product will change in response to a changed. In the amount of space allocated to that product Research suggests that space elasticity not uniform amongst products, or across stores or departmental locations.

Using profit measures as a basis for space allocation ill prevent a business manager from allocating large amounts of best quality retail space to unprofitable products. They could mean, however, that a retailer was allocating unnecessarily large amounts of space to products that would sell as well with a smaller space. Profitable lines may not in fact sell very quickly at all, and allocating extra facings or shelves of the product may have very little impact on the sales of the product. In this case the quality of the space becomes important, so the retailer can locate high profit items in locations around the stare that arc better selling. The relationship between the sales and generated by different products, and suggests how space and ranging decisions should be made accordingly. Allocating space according to sales, and in particular, product profitability, is working with the interests of the retailer, and not the customer in mind and therefore may suggest an illogical and presentation of products. Long term profitability depends on customer loyalty, which is dependent (among many other things) upon being satisfied with the presentation and assortment of products. Fine tuning the allocation of space within a retail outlet therefore requires extensive amounts of high quality data, together with a pragmatic and customer orientated managerial approach at store level.

Productivity and efficiency and towards are visual display improvements. Once an optimum level of efficiency is achieved, space planners can move onto the objective of making their products and fixtures more attractive than their competitors. Some of the latest planning systems are able to simulate the entire store environment, so that the product manager can view an attractive plan in virtual reality and make any adjustments they fed are necessary. Recent space optimization technology applications offer the opportunity to create specific platform.

Space Allocation and Category Management:

Although the performance of individual product lines is Important to retailers in terms of the rate of sales which influences availability and the levels of contribution to turnover and profitability, the focus of performance In many’ retail organizations is at product category, rather than individual SKU level. A retailer is more interested in overall levels of sales and profits generated by their product range, rather than the sales of a single line that might be of interest to its manufacturer. The product category has emerged as a manageable classification for most aspects of product management, and certainly applies in the case of space management. In fact, many would argue that space planning and allocation and the systems that drive the process can only be properly implemented in tandem with a category management approach.

Category management seeks to optimize the depth and variety of a product assortment within a specified amount of retail space and to generate maximum profitability by seeking efficiency in the operations that support the depth and variety. This includes replenishing to guarantee availability’ and adding new products and running promotions to generate customer interest and increase short term sales of particular products, without harming the overall profitability of the category. Space allocation systems allow (Inc tuning of a category assortment, provide the means by which product and category performance can be monitored and analyzed. and by using the programme output the plans can he easily communicated and successfully implemented within the various retail out lets. In some categories key brands are dominant, in which case their presence needs to have immediate impact within the space allocation plan. Other categories are very competitive, in which case low price, budget own brand and promotional products strongly on the promotional. Many businesses use the principle that shoppers will a category from bottom to top, and left to right, and so well-known brands arc placed on middle and lower shelves on the left of the category space in order to provide strong cues to the customer. Premium products meanwhile are placed on high level shelves, selecting their high quality positioning, and the fact that the customer for premium products will seek out the better quality product within the category. In some categories the customer decision-making processes are quite unique and nerd to he fully reflected within space allocation plans. For example, the decision sequence for wine is generally as follows:

Colour —— Country of origin ——– Price Level ——- Brand

Whereas the decision sequence for yoghurt might be:

Natural or flavored ——— type (low fat, standard or luxury) —- Price Level —– Brand Name

These decision processes should determine how products arc displayed within the category space.

In certain modes, if the product is maintained in the offer, long-term customer satisfaction will be retained In spite of the Individual poor product performance. Therefore it is the store’s personality traits that determine the core product ranges, and not the size; the size of the outlet determines the width and depth of the selling type that would appeal to the local customers, Stores are empowered with the merchandise that allows them to drive local market opportunities and local suppliers can also be involved in the process of providing tailored products for individual store needs, As retailers offer more formats from which customers may choose to shop, format preferences and product preferences can be matched, For example, Tesco found that its online shoppers tended to from more affluent backgrounds, and so the on-line product offer is tailored accordingly, with a large range of wines and few value lines,

For many small retailers the cost of a computerized space planning is prohibitive, and so many rely on basic sales and profit margin analysis combined with trial and error in space allocation decision making.

1.3 Summary:

A great deal of space selling is carried out in order to achieve relatively short-term retail objectives, such as maximizing the benefits of a product or departmental promotion, meeting seasonal sales figures, or improving branch profitability. However, the long term strategic objectives of the retailer provide the framework within which these decisions are taken. Space allocations must be in line with the overall positioning strategy of the retailer; the variety and depth of assortment and the stock availability service level should not be compromised by the need for short-term productivity gains. In addition, the arrangement of products around the store needs to be considered in the light of the contribution that product items, brands and categories make to the positioning statement, it may be necessary to over-represent new products or to allocate extra space to growing or seasonal categories in order to reinforce an innovative product positioning strategy. The local customer profile may also lead to exceptional space allocations in an effort to meet individuals’ requirements more closely. However, the retailer’s space is the extent of its empire, and every inch of that space must be used to its maximum effect even if, as we shall see in the next two chapters, some space is designed to he devoid of products. The measurement of that effect, however, must be appropriate in terms of the overall aims for that space.

Chapter 2: Literature Review

Space Selling:

Space selling refers to space available for advertising in different media. The advertising media available are print, electronic & outdoor. The space available and intend for advertising in different media. Decision about how much space to devote to each product line and its location plays an important role in the pursuit of merchandising success. The aim of this thesis is to have an insight into this process. First will have to understand that the services of every publication/channel, costs of space selling. The ads featured in it. And a space seller to sell that advertising space/time to potential advertisers.

2.1 UCPL acquires marketing and space-selling rights for Lemon TV and Jhankar TV:

K Sera Sera’s recently launched free-to-air channels — music channel Lemon TV, and Hindi movie channel Jhankar TV — have appointed Universal Communication Pvt. Ltd (UCPL) for their marketing and space-selling rights. UCPL is a player in the space of airtime selling and marketing of serials, television programmes and feature films for various television networks in India. Jhankar TV will particularly target the Hindi speaking audience. This is a channel that would reach to the audience of cable and satellite in UP, Bihar, MP and Rajasthan. On the other hand, for Lemon TV, they are planning to have different kinds of event and programmes like Lemon party. This will bring in more interactivity too with the relevant TG.’ When asked about the marketing challenges for these new channels, ‘Every new channel in India right now faces the challenges of clutter and telling the advertiser what difference does this channel bring to the table, and what is the value addition. These channels are also in the same situation and we are confident about overcoming these challenges.’ UCPL is associated with media and advertising agencies like Mindshare, Mediaedge:cia, Madison, McCann Erickson, Lintas, etc., and with clients like Hindustan Unilever, Procter & Gamble, and Godrej, among others. As a company, UCPL has now diversified into full-fledged events and brand promotions, striving to create and mange innovative concepts, thus offering their client complete 360-degree solutions.’

2.2 Using the blogging concept to sell wikis:

If a person understands what a blog is, the wiki may be compared and contrasted to a blog. A blog enables a single person to get a message out. A wiki enables a group of persons to assemble a body of knowledge. A wiki can be presented as a blog with one major post (the purpose, topic, idea of the wiki) that others can build knowledge around, without the initiating post getting buried in archives as new posts arrive and are displayed in reverse chronological order.

A wiki may be sold as a horizontal blog platform. Blogs are vertical, recent updates on top, all others shoved down into oblivion, with only tags, categorical sidebar listings, or site search to dredge them up again. But a wiki distributes all the information in a more horizontal, flat, single surface that stretches through pages spread out, not sedimented. The wiki may be sold as a web site set up for idea construction; it is team-architected rather than single-authored. Blogs tend to be univocal and identifiable; one known person expounding a position, with audience members invited to comment on the sermonizing, but not really authorized to begin their own topic threads. Wikis are multimodal and transiently anonymous, many unknown people working together. A wiki, thus is like a super-democratized blog. A blog where the walls between bloggers are audience is dissolved. The audience members become the contributing authors and the originating authors become the audience, and vice versa.

2.3 Modern Trends in Working Styles:

Another interesting way of presenting wikis has to do with the fact that they allow for easy remote working. One of the main advantages a wiki provides is the fact that it is available from any internet-connected web browser, at any time. Information can be worked on efficiently in an asynchronous manner. In this regard, wikis solve tricky coordination problems.

What’s more, a wiki provides a virtual space where all relevant business information can be stored. Hence people working from different places, at different times of the day can still end up with a coherent document. A wiki is more efficient than e-mail for the resulting document can almost be exploited immediately and its last version is “always on top” (which is quite useful when working with more then one person).

2.4 The Advantages of Asynchronous Communication:

Wiki content growth and increasing value in an organization by facilitating asynchronous communication which is often more convenient than other forms of collaboration that require “face time” or “same time”. On the other extreme, making large batches of content (Power Point, White Papers) are inefficient simply because they require the author to provide context and content, some of which may be error laden or out-of-date. Wikis allow smaller batches of contribution to appear at any time, thus relieving two bottlenecks to collaboration. Add to this the fact that they are completely auditable for contribution, and the need for creating “credit” concurrently is removed.

2.5 ROI on social software:

Being able to make a business case will be very important to all convince for every enterprises and after than to make a start on adopting social software. Charlene Li has a contribution about ROI on blogging. But Return on investment has to be calculated for all sorts of social software.

Then again, ROI is becoming increasingly irrelevant when online collaboration tools and social media platforms are available for free, or at extremely low cost. Many companies find they can get along just fine with the free versions of blogs (lBlogger), podcasting (Odeo), video uploading and player embeds (YouTube), and wikis (Socialtext).

ROT (return on time) is the far more challenging aspect of social software. It takes a significant investment in time to become known in the blogosphere, for example. Bloggers must spend large amounts of time in researching topics, writing posts, linking to other Blogs, interacting with comment posters, reading other Blogs, posting comments at other Blogs, producing multimedia content, emailing other bloggers, and adding features and functionalities to a blog. All this in addition to remaining informed about ones industry or field of study.

Warning top management about falling behind in competitive technology should be sufficient to begin a case for online collaboration tools. Explaining that the trends are massively aligned, user-generated content, customer co-creation of product, corporate contributions to innovation, and universal content utopia, advocates of social software and user media can point to great examples of Peer Pioneers companies leading the way: P&G, IBM/Linux, Second Life, Digg, Jigsaw, YouTube, and InnoCentive.

2.6 Successful Strategies for Selling Ad Space on Low-Traffic Websites:

Upon first thinking about it, the idea of selling advertising on a website or blog with limited traffic seems a bit daft. After all, aren’t most advertisers interested in putting their product in front of the highest number of eyeballs possible? Approaching them with piddly visitor numbers seems like a surefire way to end up in the deleted folder.

But though it may feel like putting the cart before the horse, there are many good reasons and ways to sell ad space on low-traffic websites. What you need to always keep in mind is that, while advertisers are drawn to high traffic numbers, they desire something else even more: high conversion rates. There are plenty of success stories of websites that have limited traffic but sell a ton of advertising. These websites succeed because they do one thing well: they deliver the right type of customer to the right type of business.

Space selling concept:

* Take a close look at your website – Whether they sell landscape or skyscraper ads, text ads, video or any other format, they have to offer something of value before you can start to sell advertising space. They know this sound obvious, but it always surprises them how many publishers and online media owners come up with a niche product that nobody wants to buy advertising space in! If they are going to make a fortune in selling subscriptions or other membership related offerings, then fine – but in most cases, forget about their hobby or leisure interest, unless it is unique and offers a great angle. Do make sure their product is going to be attractive to a large enough audience before they attempt to sell advertising – and if they have a fair bit of competition, make sure that they have some unique selling points and formats. As they move into Web 2.0 the requirements from a lot of advertisers will change. If they can offer a new format or idea and take the hard work out of it for the advertiser, they are onto a winner. If they don’t, they’ll lose out to their rivals.

* Choosing ad formats that will sell – Not all ad formats sell well on ALL websites. Put another way, some ads work better on consumer websites than they do on business sites – and visa versa. The trick is to test their ads with different messages, fonts, colours and designs. This research will be well worth it in the end and can make the difference between making a decent revenue stream and making a substantial one. One of the biggest things to bear in mind is where the advertising should be placed. If they sell products on their site, there is very little point displaying adverts, which could detract potential customers away from their own sales message. So, the first thing they need to do is highlight the sections and pages where they are happy to accept advertising. When they have done that, they can then take a look at design and placement. Always think of the customer when you think about designs, placements and tracking. Make it simple for advertisers to find and relate to the formats, as they will have to justify the ad spend to their bosses.

* Reporting and statistics – This is a vital part of their business! Remember, communication is the key to long-term success. If they don’t have a good reporting and stats package in place, then they will find it difficult to show their customers what they are/could be getting from their services. This can take a bit of time to set up, but it really is worth the time and money they put into it. Once in place, it can be automated to match their business model and to provide an essential package for their existing and potential customers. Remember out of sight, out of mind – leave it to their competitors to make this mistake!

* What are their competitors doing well? – Even if they are offering a good service, they bet there is something they can learn from their competition. Some media companies do have the luxury of having someone w


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