Trade marketing is a B2B marketing strategy executed by manufacturers or principal companies and directed to distributors, wholesalers, and retailers. The program essentially rewards retailers with coupons, bulk deals, and other incentives. The more retailers buy products, the bigger incentives they’ll receive from the manufacturers.
The goal is to get resellers promote your product against competitors’. One of the methods is to get your product strategically placed in-store shelves. This is vital especially for FMCG (Fast Moving Consumer Goods) companies where competition for shelf space is more cutthroat. Apart from that you will want the store owner and store attendant to recommend your brand as they have large influence in customer’s buying decision.
For retailers to value your products, you need to convince them that selling your products will ultimately create value for them too. To build a good long-lasting relationship with them, you can try by establishing trade promotions.
Advantages of establishing the program
Beyond generating more profits, trade marketing gives you a competitive edge over your competitor’s products if they promote your products over your competitors. By understanding and creating a better rewards program for retailers, companies can maintain a close relationship with key supply chain contacts.
How to create a trade marketing promotions
1. Research the best strategy
To stay current and impactful, you have to continually re-evaluate their strategy. You don’t have to re-invent everything, you just have to find which one works for your demographic.
Seasonal promotion is one of a great way to attract attention to your business. Since it only happens in a short period, resellers are more motivated to catch the deal and it may also encourage them to buy more than they usually do, such as the buy-in bulk campaign (discounts, buy 10 get 1, etc).
If you can get resellers to buy more, you can now create a tiered loyalty program to retain their loyalty. Resellers can be rewarded through a couple of ways; from sales orders, receipts, QR codes, to the documentation of planogram displays, and more. The more activities that resellers do, the more they earn points.
2. Understand the current issues
a) Slow information flow
Every promotion spread throughout the supply chain layers is goring through the salesmen who visited the client’s sites regularly. However, if it’s done manually, information flow becomes really slow. Not to mention if salesmen have to wait for printing materials such as booklets, flyers, etc. Often times, if a principal company announced their new promotion on Q1, the fastest timeline retailers will hear about it could be Q2.
b) Retailers aren’t seeing the benefits
There is also a lack of visibility in terms of how many points that retailers are gaining. If the retailers aren’t seeing any visible benefits and progress of them gaining rewards, they won’t have the urge to buy your products, let alone promote your products to end consumers.
c) The current system isn’t fully optimized
For principals, it becomes really hard to process any data regarding the store performance because the data need to be collected manually and nothing is synchronized yet. This manual process also affects the distribution of rewards.
With no visibility, the distribution of rewards items becomes difficult. Especially if its bulky merchandise such as refrigerators and washing machines. These incentives often times becomes a hassle instead of a reward for them because not every store owner needs a washing machine and often times ends up being a frustration for them to store these bulky items.
3. Utilize more modern tools
a) Streamline information flow
AdvoMarketing is an Advotics solution for B2B loyalty programs, with the goal to increase existing retailers’ sales through advocacy. Available in both web platforms and mobile applications, the software eliminates the need to print out any marketing materials thus saving operational cost as well as time. You can now create dynamic campaign, update its terms and conditions, as well as communicating with resellers by mobile push apps notifications through the dashboard. Stored in the cloud, all information is accessible anytime, anywhere, and updated in real-time.
b) Visibility throughout the supply chain layers
Retailers can be rewarded through a couple of ways; from sales orders, shelf space or planogram, and more. They can see their points progress through their mobile app. This feature can motivate them to earn more points by pushing the sales of principal’s products.
Advotics have come up with the most effective incentives system to drive up retailers’ engagement. They can redeem their loyalty points with e-vouchers, mobile prepaid vouchers, etc. The retailers will have more flexibility to redeem their points with the items that they really need.