A shift in merchandise mix and an aggressive marketing program brought Virgin Megastores its best holiday season in five years. The Los Angeles-based multichannel music and entertainment retailer dedicated 30 percent of its annual ad budget to the holiday period, which it said was a drastic increase from previous years. It also used circulars as a marketing strategy for the first time. We decided to run circulars, as we had never done it before and thought it would be an effective method to showcase our expanded product selection, competitive pricing and Virgin exclusives all in one place to brand-new customers, said Dee McLaughlin, senior marketing director for Virgin Entertainment Group, North America. Another reason we decided to use circulars was to become more competitive with larger retailers who rely on them at Christmas. The circulars ran Thanksgiving week, the week of Dec. 12 and the week of Dec. 26 in daily and weekly l