Product sales promotion is one of the key tasks of any trading organization, usually implemented using well-known direct advertising of goods and services. A worthy alternative to this method is a set of trade marketing events, the popularity of which methods is growing day by day in the world. 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 measures to stimulate sales of products used by wholesale and retail companies. It functions through special tools to influence consumers at various levels.
Moreover, 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 types of motivation.
This way of stimulating is much more effective than direct advertising - ATL, in which all manufacturers are so eager to invest. While she simply reminds people of the product being promoted and tries to convince her of the need to buy, marketing marketing, being indirect or BTL advertising, directly or through the hands of intermediaries incites the buyer to give preference to him at the time of the purchase.
Goals and objectives of trade marketing
As the main goal of stimulating marketing, it is necessary to consider by no means a simple growth of profit or sales in a short period or perspective. Mostly, all actions are aimed at creating a common positive image of the manufacturer, creating a loyal consumer relationship to itself and to the products it produces.
Trade marketing involves achieving key goals by completing 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 market in a competitive environment. Conquering the location of its consumer, creating a favorable image of the company, identifying the benefits of specific products and their promotion.
- Technological improvement of sales. Space optimization of sales areas.
- Managing the actions of a potential consumer. Speeding up the process of making a purchasing decision and increasing its amount.
Organization of trade marketing in the company
Speaking about trade marketing, it should be noted that this is only one of many ways to stimulate sales of products. At the enterprise, it is an integral part of the overall marketing planning and budgeting, and should be carried out in close connection with the ongoing brand positioning and development program.
Depending on the size of the organization, a department may be created or a responsible specialist, a trade marketing specialist, may be hired. In any case, the new unit 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 received, a plan of trade-marketing measures to promote goods among intermediary trading organizations and end consumers.
The main tools of trade marketing
The marketing marketing toolkit is extremely wide. Among its key tools are:
- Direct sales promotion.
- Providing discounts, bonuses to participants in the distribution chain.
- Encouragement of the end customer in the form of gifts upon purchase, prize draws.
- Merchandising . It includes the implementation and control of the layout of goods at points of sale, consulting, acquaintance of buyers with new products in stores, holding promotions, competitions and presentations.
- Special trade marketing events. This includes the organization of trade shows and presentations, seminars, conferences and trainings for reseller staff.
The decision on the use of certain tools is made by persons responsible for the implementation of the trade marketing strategy. The final result from the application of each of them is determined primarily by the characteristics of a particular situation.
Work with resellers
Trade marketing is a knowledge system that reveals how it is possible to influence distributors, dealers, and sales representatives so that they are actively promoting the desired product among customers. Among all the instruments of influence, one can single out material incentives for the intermediary distribution chain. Usually it is organized in the form of shares held by the supplier, which can be aimed at:
- Expansion of the volume of purchases. Usually associated with a reduction in the purchase price, but the terms of the discount may be different, for example:
- Bonus relevant for the duration of the contract when purchasing a certain amount of goods.
- Periodic hot discount offers.
- Provision of a commodity bonus for the purchase of an agreed volume of goods.
- Sales growth. Such events are aimed at getting intermediaries motivation to actively engage in the sale of a particular product. They can be implemented in different ways:
- Establishment and promotion of planned sales.
- Organization of contests and prize drawings for staff with good performance.
- Carrying out the Mystery Shopper promotion and rewarding the best employees.
- Increased distribution of goods at points of sale. It consists in rewarding the intermediary for achieving one of the goals:
- The product is presented in the right number of outlets.
- In the established number of points of sale the necessary assortment is presented.
- The specified conditions for the calculation of goods at the points of sale are fulfilled.
Merchandising as part of a trade marketing campaign
Trade marketing considers merchandising as a special complex of events held at the points of sale and aimed at increasing sales to the end customer. All promotion actions are carried out by the manufacturer’s personnel in agreement with or without an intermediary. Among the main areas of work can be identified:
- The layout is the key to merchandising. The goods on the shelves should be presented in such a way that 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 center, implementing the right zoning and design of the premises in terms of marketing, setting up lighting and sound.
- The equipment of the trading floor: selection of shop windows, mannequins, refrigeration and other equipment.
- Providing a point of sale with POS materials, which include advertising leaflets and posters, price tags, information stands, shelves and more.
- Implementation of audio and video presentations on the trading floor.
- Conducting promotions - lotteries, sweepstakes, contests that have visitors to buy a particular product.
Special Trade Marketing Events
Such types of incentive measures, like merchandising, are classified as intangible, they are mainly aimed at increasing loyalty from intermediate consumers. The following varieties are distinguished:
- Conducting training seminars and trainings for reseller staff. These events are carried out to better familiarize themselves with the current assortment 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 summarized 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 network companies.
- Business presentations. They are part of generally accepted business etiquette. They should be given exclusively for the occasion, and selected in such a way that they are as useful to the recipient as possible.
Events targeting the end customer
Despite the variety of techniques for working with intermediaries, one should not forget that trade marketing is also a set of effective ways to influence the consumer of a product. Forming additional motivation from the buyer, they are aimed at a short-term increase in demand for a promoted product. The following types of exposure exist:
- Lotteries, games, contests, surprises. They suggest a possible unknown win when buying a product.
- Organization of club programs. A community of buyers is created for a particular brand, the members of which are given some privileges.
- Charity events, sponsorship and event marketing. Special events of various kinds are held to attract the target audience: concerts, festivals, parties, organized sports competitions, city holidays.
- Participation in industry exhibitions and the use of mobile promotion zones in crowded places.
- Distribution of leaflets about the product indicating the possible channels for its acquisition.
- Prize for the purchase. It can be arranged as a gift in each package of goods, providing a larger volume at the previous price, holding promotions of the “1 + 1” type.
- Sampling - free distribution of product samples.
- Periodic reduction in product prices and distribution of coupons for subsequent purchases at a discount through magazines, other products or by mail.
The effectiveness of trade marketing activities
In addition to perfect mastery of tools, a trade marketing manager must be able to correctly assess the effectiveness of the package of activities. This is quite an important point, since the implementation of a trading strategy is very expensive and management will probably want to know how profitable such an investment is and whether to continue to do it.
The qualitative or communicative effectiveness of a trade marketing campaign shows how successfully its behavior has affected the image of the manufacturer. Mostly here we are talking about increasing brand awareness, customer loyalty, customer awareness of changes in pricing policies and products of a particular brand.
Economic efficiency represents the calculated result from the use of a set of sales promotion tools. Usually carried out on the basis of targets - sales, purchases, distribution of goods, the size of the customer base. During the analysis, their values are compared before and after the trade marketing events.
The main stages of effective sales marketing
Having figured out 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 particular case. However, you can highlight the key stages of a trade marketing program:
- Internal goal setting, the formulation of the expected results.
- Establishing the necessary connections in the distribution chain and analysis of their capabilities.
- Providing training for reseller staff.
- Implementation of methods to increase the loyalty of participants in the distribution chain.
- Material methods of influence on 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. Cycling is associated not only with the inability to pick up the ideal trade marketing scheme on the first attempt, 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 links of the trading chain to promote goods from producer to consumer. A competent organization will be able to guarantee exceptionally positive results for all its participants.