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Trade marketing – what is it?

Are you browsing promotional leaflets of stores to be up to date with the offer and familiarize yourself with the store’s assortment? If so, you are dealing with trade marketing. Read our article if you want to know exactly what trade marketing is and how this marketing technique works.

Trade marketing is part of the marketing mix and uses the 7P or 4P principle. This is a type of marketing that relates to the goods and services sector. Have you ever wondered what determines the shelf space of a product? Or what products are being promoted at any given time? It is this type of activity that trade marketing experts deal with.

Trade marketing – what is it? Definition

We have already revealed the secret of what trade marketing is. Now, however, the time has come to define the concept.

Trade marketing is all activities aimed at ensuring better distribution and visibility of products in stores, intermediaries and distributors. The purpose of trade marketing is to encourage the person selling the manufacturer’s product to put it in a specific place on the display or to promote it in another way, so that it attracts the attention of customers.

Assumptions and basics of trade marketing

Depending on the type of product, the manufacturer may sell and distribute his products himself or have intermediaries to deal with this type of promotion. For example, imagine a small producer of goat’s cheese and other goat’s milk products. The farm is located in a small village, many kilometers away from any big city. The owner could open a company store in his town, but he would probably not earn enough to keep the business. There is also no time to distribute the products on his own, so a trade marketing specialist does it for him. Thanks to this, the farmer’s products can be found in the chain of supermarkets known throughout the country.

However, the work does not stop there. The placement of products on store shelves is also important. The contract signed between the seller and the manufacturer determines whether the products will be placed in an attractive place (e.g. at the customer’s eye level). Much also depends on the goodwill of the store owner and contracts with other suppliers.

One of the basic assumptions of trade marketing is to encourage the store owner to sell and, importantly, recommend a given product.

The goal of trade marketing is to achieve a win-win situation for both parties. The manufacturer increases the sales and range of the brand by reaching new consumers. The distributor, in turn, has the option of extending the offer and attracting customers of a given manufacturer.

Trade marketing: advantages

Skillfully conducted trade marketing brings a number of benefits. One of them is the ability to gain an advantage over the competition. How? The key to success is to prepare a promotion plan that will allow you to operate effectively and reach the largest group of recipients.

In this way, the producer’s market share increases and the consumer’s awareness of the brand increases. As a result, the product is more visible on the market, as a result of which it achieves higher sales, and the manufacturer’s company records growth. The use of trade marketing enables the creation of a distribution network within a given industry. Such action will also strengthen the company’s position on the market.

Trade marketing: tools

We have already talked about the fact that trade marketing is, inter alia, on placing products in promotional leaflets. However, first you have to think about what to do to get to such a promotional magazine. First of all, it is necessary to carefully follow the publishing calendar and the subject of a given issue. For example, a peanut butter producer will be happy to see his product in a leaflet promoting American cuisine products.

As you can see, research is the basic tool of trade marketing. Thanks to a thorough market research and getting to know the distributor’s preferences, you can propose appropriate products and terms of cooperation that will make him decide to cooperate with your brand.

However, these are not the only tools of trade marketing. What else is worth using? Trade marketing tools also include:

– leaflets educating customers about the product;
– sales materials in POS – perform a function similar to leaflets, i.e. they educate customers and increase the probability of purchasing a product;
– roll-ups, i.e. advertising stands which (unlike leaflets) are visible from a distance and are more durable;
– competitions and gamification – the element of competition between distributors allows for greater involvement and thus increased sales.

Commissions are also important as they motivate sellers to advertise the product more effectively.

Is trade marketing for everyone?

You are probably wondering if it makes sense to engage in trade marketing with a large company. And the other way – does a small company have a chance to increase market visibility by engaging in trade marketing? In both cases, the answer is YES.

Large enterprises, thanks to trade marketing activities, have a chance to increase sales and to reach new groups. Famous players in the market use trade marketing to see how the company is perceived in the market. For small and local businesses and farms, trade marketing can be an opportunity to reach new customers and differentiate yourself from the competition.

But that’s not all. Knowledge in the field of trade marketing will be useful to anyone who is just starting their adventure with running their own business. Thanks to the knowledge of the subject, you can build your brand consciously, and all your actions will be well-thought-out and targeted precisely at the goal. In addition, if you run, for example, a grocery store, you will know the strategies of trade marketers.

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