Trade marketing is a discipline of marketing that relates to increasing the demand at wholesaler, retailer, or distributor level rather than at the consumer level. However, there is a need to continue with Brand Management strategies to sustain the need at the consumer end. A shopper, who may be the consumer him/herself, is the one who identifies and purchases a product from a retailer. To ensure that a retailer promotes a company's product against competitors', that company must market its product to the retailers as well. Trade marketing might also include offering various tangible/intangible benefits to retailers. The alignment of sales and marketing discipline to profitability can be another explanation for trade marketing.
Trade marketing is the basic idea of marketing your products through the value chain and at the point of sale i.e. the store. Consider it the idea of creating a demand for your products across the channel and before it reaches the consumer. This traditionally exists in a brick and mortar environment and can be argued to be one of the oldest forms of marketing.
Video Trade marketing
Targets of trade marketing
Distributor/Dealer
Distributor/Dealers are (is part of route to market) channel trade partners who act as a medium to ensure stock delivery/availability for the consumer across the geographies. The role of these entities is absolutely critical as they help in ensuring that the product is widely distributed and available for the end consumer. The key benefit of these entities is in ensuring that the distribution costs are lower for the manufacturer and simultaneously the products are available for the end consumer. The distributor and dealers operate on a base trade margin (factored in the cost of the product by the manufacturer). Along with the base margin the trade partners also get additional schemes/incentives which keep on varying from time to time and product to product. The dealer could be a Retailer (selling to end consumer directly), wholesaler (selling to other retailers primarily) or a modern retailer (i.e. self-service stores like the Walmart, Carrefour, Tesco, Auchan etc. which are into both the consumer retailing and wholesaling).
Sales outlet
Sales outlet means a retailer. A retailer is also one of the customers in trade marketing targets. Plans of trade marketing is targeting customers and shoppers. Therefore, trade marketing should provide sales outlets with customer & shopper-based value creation plans. Sales outlets (customers) are a place that manufacturer can meet shoppers and consumers.
Maps Trade marketing
Methods of trade marketing
Basic method of trade marketing is focusing on sales fundamentals, such as Distribution, Display, Promotion and Price. With data and knowledge of sales fundamentals, trade marketing develops market strategy aligned with brand strategy. In order to deliver sales volume and value, trade marketing support sales forces with well-designed fundamental enhancement plans.
Current trends in trade marketing
Shopkeepers and retailers are becoming more and more profit margin oriented. They seek to extract maximum margins from one company, by quoting higher margins being given to a competitor company.
Shopper marketing
Shopper marketing may be included in trade marketing, therefore the shopper being another target for trade marketing managers, while it can also be considered as a separate discipline. Some of the activities to increase demand at shopper level include setting the right planogram, price announcements such as inserts, use of point of purchase materials, alternatively called promotional material.
KPI Trade marketing
- active customer base - distribution, sales outlets which buy products of company
- middle order from a sales outlet
- share trade shelf
- fullness on trade shelf
- regular presence of must stock
- right representation planograms
- accommodation POS
- additional space for products of company
- lack of OOS
- low level of commodity rests
- knowledge about product in sales outlets
See also
- Business-to-business
- List of basic marketing topics
- List of marketing topics
- Marketing
- Marketing strategy
- Shopper marketing
External links
- Marketing dictionary
- Trade Marketing and Commercial Strategies - Università di Parma
Source of article : Wikipedia
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