Sales promotion is one of the key tasks of any trade organization, usually implemented using well-known direct advertising of goods and services. A worthy alternative to this method is a set of trade marketing measures, the popularity of which methods in the world is growing day by day. Let's try to figure out what trade marketing is and how it works.
The concept and essence of trade marketing
In general, trade marketing is a specially organized set of sales promotion activities used by wholesalers and retailers. It functions through special tools to influence consumers at various levels.
At the same time, a direct impact can be exerted both on end customers and on intermediate ones, whose role is played by participants in the product promotion chain - sales representatives, distributors, dealers. As for the methods of influence, these can be both material methods of influence, for example, rewards,discounts, gifts, and any other kind of motivation.
This method of promotion is much more effective than direct advertising - ATL, in which all manufacturers are so eager to invest. While it simply reminds people of the product being promoted and tries to convince them to buy it, trade marketing, which is indirect or BTL advertising, directly or through intermediaries, induces the buyer to prefer it at the time of purchase.
Goals and Objectives of Trade Marketing
The primary goal of promotional marketing is not simply to increase profits or sales in the short term or in the long term. Basically, all actions are aimed at creating a general positive image of the manufacturer, the formation of a loyal consumer attitude towards itself and the goods it produces.
Trade marketing involves achieving key goals through the following list of tasks:
- Product sales management. Studying the psychological characteristics of a potential buyer, drawing his attention to the product, fixing information about it in the mind.
- Strengthening the position of the supplier in the sales market in a competitive environment. Winning the favor of your consumer, creating a favorable image of the company, identifying the benefits of specific products and promoting them.
- Technological improvement of sales. Optimization of the trading floor space.
- Managing the actions of a potentialconsumer. Accelerating the process of making a purchase decision and increasing its amount.
Organization of trade marketing in the company
Speaking of trade marketing, it should be noted that this is just one of the many ways to stimulate sales of products. In an enterprise, it is an integral part of overall marketing planning and budgeting, and should be carried out in close connection with the ongoing brand positioning and development program.
Depending on the scale of the organization, a department can be created or a responsible specialist, a trade marketer, can be hired. In either case, the new division or position will be part of the existing marketing department. It is also possible to outsource these functions.
A newly introduced structural unit or a third-party contractor should study and analyze the current state of the sales market, develop and implement, based on the data obtained, a plan of trade marketing activities to promote goods among intermediary trade organizations and end consumers.
Basic trade marketing tools
Trade marketing tools are extremely wide. Among his key tools are:
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Direct sales promotion.
- Providing discounts, bonuses to participants in the commodity distribution chain.
- Encouragement of the end customer in the form of gifts upon purchase, prize draws.
- Merchandising. Includes the implementation and control of the layout of goods at points of sale, consulting,familiarizing customers with new products in stores, holding promotions, contests and presentations.
- Special trade marketing activities. This includes the organization of product exhibitions and presentations, seminars, conferences and trainings for reseller personnel.
The decision to use certain tools is made by those responsible for the implementation of the trade marketing strategy. The end result from the application of each of them is determined primarily by the characteristics of a particular situation.
Working with resellers
Trade marketing is a knowledge system that reveals exactly how distributors, dealers, sales representatives can be influenced to actively promote the desired product among buyers. Among all the instruments of influence, one can single out material incentives for the intermediary commodity distribution chain. It is usually organized in the form of promotions held by the supplier, which can be directed to:
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Expanding the volume of purchases. Usually associated with a reduction in the purchase price, but the conditions for granting a discount may be different, for example:
- Bonus valid for the duration of the contract when purchasing a certain amount of goods.
- Periodic hot discount offers.
- Providing a commodity bonus for the purchase of a specified volume of goods.
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Growth in sales. Such activities are aimed at obtaining motivation for intermediaries to activelyto sell a particular product. They can be implemented in different ways:
- Establish and encourage the implementation of planned sales volumes.
- Organization of competitions and prize draws for staff with good performance.
- Holding the "Mystery Shopper" promotion and rewarding the best employees.
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Increasing the distribution of goods at points of sale. It consists in remuneration of the intermediary for achieving one of the goals:
- Item is available in the right number of outlets.
- The required assortment is provided in the set number of points of sale.
- The specified conditions for the display of goods at points of sale have been met.
Merchandising as part of a trade marketing campaign
Trade marketing considers merchandising as a special set of activities carried out on the territory of retail outlets and aimed at increasing sales to the end customer. All promotional activities are carried out by the manufacturer's personnel in agreement with or without an intermediary. Among the main areas of work are:
- Layout is the key to merchandising. The product on the shelves should be presented in such a way that it makes the buyer want to buy it.
- Regulation of the presented product range.
- Preparation of the point of sale: determining the favorable location of the pavilion in the shopping complex, implementing the correct zoning and room design from the point of view of marketing, setting up lighting andsoundtrack.
- Equipment of the trading floor: selection of showcases, mannequins, refrigeration and other equipment.
- Providing the point of sale with POS materials, which include advertising booklets and posters, price tags, information stands, shelves, etc.
- Implementation of audio information and video presentations on the trading floor.
- Carrying out promotions - lotteries, drawings, contests that encourage visitors to purchase a particular product.
Special trade marketing activities
Such types of incentives, like merchandising, are classified as intangible, they are mainly aimed at increasing loy alty on the part of intermediate consumers. The following varieties are distinguished:
- Conducting training seminars, trainings for personnel of resellers. These events are held to better familiarize yourself with the current range and features of specific products.
- Business meetings and conferences. They are periodic meetings of representatives of the supplier and the most important resellers, at which the results are summed up in an informal setting, further prospects for cooperation are discussed, problems are identified and ways to solve them are discussed. Such events are usually organized by large chain companies.
- Business gifts. They are part of generally accepted business etiquette. They should be given exclusively on occasion, and selected in such a way that they are as useful as possible.for the recipient.
Activities targeted at the end customer
Despite the variety of methods of working with intermediaries, do not forget that trade marketing is also a set of effective ways to influence the consumer of goods. Forming additional motivation for the buyer, they are aimed at a short-term increase in demand for the promoted product. There are the following types of such impact:
- Lotteries, games, contests, surprises. Assume a possible unknown gain when buying a product.
- Organization of club programs. A community of buyers of a particular brand is created, whose members are endowed with certain privileges.
- Charity promotions, sponsorship and event marketing. Various special events are held to attract the target audience: concerts, festivals, parties, organized sports competitions, city holidays.
- Participation in industry exhibitions and use of mobile promotional areas in crowded places.
- Distribution of flyers about the product, indicating the possible channels for its purchase.
- Purchase prize. It can be organized as a gift in each package of goods, providing more volume at the same price, holding promotions like "1 + 1".
- Sampling - free distribution of product samples.
- Periodic reduction in product prices and distribution of coupons for subsequent purchases at a discount through magazines, other goods or mail.
Efficiency of trade marketingevents
In addition to perfect mastery of the tools, a trade marketing manager must be able to correctly evaluate the effectiveness of a set of measures. This is quite an important point, since the implementation of a trading strategy is very costly and management will probably want to know how profitable such an investment is and whether it is worth continuing to do it.
Qualitative or communicative effectiveness of a trade marketing campaign shows how successful its behavior is reflected in the manufacturer's image. Mainly here we are talking about increasing brand awareness, loy alty to it, awareness of customers about changes in pricing policy and products of a particular brand.
Economic efficiency represents a calculable result from the use of a set of sales promotion tools. It is usually carried out on the basis of target indicators - sales, purchases, distribution of goods, the size of the customer base. The analysis compares their values before and after trade marketing activities.
Basic Steps of Effective Trade Marketing
Having understood what trade marketing is, you should understand how to organize the process of its successful application. The set of steps, as well as the set of tools used, will vary depending on the specifics of a particular case. However, the key stages of a trade marketing program can be identified:
- Internal goal setting, formulation of expected results.
- Establishing the necessary links in the commodity distribution chain and analysistheir capabilities.
- Training for reseller staff.
- Implementation of methods to increase the loy alty of participants in the distribution chain.
- Material methods of influencing intermediaries.
- Merchandising.
- Work with the end user.
- Analysis of the effectiveness of the campaign.
The results obtained should be compared with the expected ones. After making the appropriate amendments, the process must be repeated again. Cyclicity is associated not only with the impossibility of choosing the ideal trade marketing scheme on the first try, but also with the unstable conditions of the internal and external environment, which require an adequate change in the work of the company itself.
Trade marketing is a joint activity of the trade chain links to promote goods from producer to consumer. Its competent organization will be able to guarantee exceptionally positive results for all its participants.
