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Trade Marketing

Trade Marketing

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Published by: Bal Raj on Aug 24, 2011
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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, you need to continue with your Brand Management strategies to sustain the need at the consumer end. A consumer is the one who identifies and purchases a product from a retailer. To ensure that a retailer promotes your product against competitors', you must market your product to the retailers, also. Trade marketing might also include offering various tangible/intangible benefits to retailers. The alignment of sales and marketing discipline to profitability. It is used to satisfy the needs and wants of the consumers.

1 Introduction 2 Targets of trade marketing
o o

2.1 Distributor/Dealer 2.2 Sales outlet

3 Methods of trade marketing 4 Current trends in trade marketing 5 See also 6 References 7 External links

[edit]Introduction 70 percent of shopping decisions are now made at the trade or what marketing practitioners refer to as "point-of-purchase". This new trend leads to the greater importance of merchandising and shopper promotions than consumer directed programs. Below the line promotions have become the focus of most consumer goods companies in order to drive higher sales. As retailer giants continually expand throughout every opportune territory, the role of merchandising in generating growth becomes more prioritized. [edit]Targets

of trade marketing


Distributor/Dealers are 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 simultatenously 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 etc which are into both the consumer retailing and wholesaling).
This section requires expansion.

it can also be defined as the channel which [edit]Sales


Sales outlet means a retailer. A retailer is also one of 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.
This section requires expansion.


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.SO WE MUST FOCUS ON TRADE MARKETING.

Marketing evolved to meet the stasis in developing new markets caused by mature markets and overcapacities in the last 2-3 centuries.[citation needed] The adoption of marketing strategies requires businesses to shift their focus from productionto the perceived needs and wants of their customers as the means of staying profitable.[1] It is an integrated process through which companies build strong customer relationships and create value for their customers and for themselves. and the strategy to use in sales. marketing management is one of the major components of business management. and keep the customer. satisfy the customer. communications and business development. With the customer as the focus of its activities.[1] Marketing is used to identify the customer. an organization should .22222222222222222222222222222222222222222222222222222222222222222222222222222222222 Marketing is the process used to determine what products or services may be of interest to customers. business communication.[citation needed] The term marketing concept holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions.[2] It proposes that in order to satisfy its organizational objectives.[1] It generates the strategy that underlies sales techniques. and business developments.

1 Organizational orientation   3.2 Contemporary approaches 3 Customer orientation o 3.3 Types of marketing research 5 Marketing planning o 5.1 B2C buying behaviour 7.1.1 Earlier approaches 2.1 Marketing strategy 6 Marketing specializations 7 Buying behaviour o o 7.1 Marketing environment 4.anticipate the needs and wants of consumers and satisfy these more effectively than competitors.2 Further reading [edit]Further definitions .2 Market segmentation 4.1 Herd behavior 3.1.1 Works cited 12.[2] Contents [hide] 1 Further definitions 2 Evolution of marketing o o 2.2 B2B buying behaviour 8 Use of technologies 9 Services marketing 10 See also 11 References 12 Bibliography o o 12.2 Further orientations 4 Marketing research o o o 4.

psychology. communicating. sales process engineering marketing is "a set of processes that are interconnected and interdependent with other functions.[3] The term developed from an original meaning which referred literally to going to a market to buy or sell goods or services.[6] In this context.Marketing is further defined by the AMA as an organizational function and a set of processes for creating. anticipating and satisfying customer requirements profitably. econom ." The Chartered Institute of Marketing defines marketing as "the management process responsible for identifying. sociology. distribution and selling. because the academic study of marketing makes extensive use ofsocial sciences. However. which included advertising. and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.[4] whose methods can be improved using a variety of relatively new approaches."[5] A different concept is the value-based marketing which states the role of marketing to contribute to increasing shareholder value."[6] Marketing practice tended to be seen as a creative industry in the past. Seen from a systems point of view. mathematics. marketing is defined as "the management process that seeks to maximize returns to shareholders by developing relationships with valued customers and creating a competitive advantage.

spending millions of dollars. allowing numerous universities to offer Master-of-Science (MSc) programmes. The overall process starts with marketing research and goes through market segmentation. The marketing literature is also adept at re-inventing itself and its vocabulary according to the times and the culture. the profession is now widely recognized as a science. µChoice¶ examined the theory of trolleyology finding that many shoppers instinctively look to the right when they¶re in the supermarket. anthropology and neuroscience. Their aim is to make sure that shoppers leave spending much more than they originally planned. Browne (2010) reveals that supermarkets intensively research and study consumer behaviour. magazines.ics. It is also related to many of the creative arts. Consumer psychologist Dr. ending with pre. Paul Harrison (cited in Browne. chocolates. expensive batteries and other tempting products that wouldn¶t normally be thought of. the entry point is another marketing tactic. business planning and execution. These products consist of the latest DVDs. Supermarkets prey on this biological trait by positioning many expensive impulse buying products to the right of the checkout.and post-sales promotional activities. Supermarkets move products around to confuse shoppers. 2010) states that supermarkets are constantly using different methodologies of selling. One method is performing regular overhauls changing the locations of .

marketing has changed considerably in conjunction with consumer tastes.[8] [edit]Earlier approaches The marketing orientation evolved from earlier orientations. the product orientation and the selling orientation. Consumer psychologists (cited in Browne. [7] [edit]Evolution of marketing Main article: History of marketing An orientation. thus it is a biological trait that people have the tendency of veering to the right when shopping. and break your budget.products all around to break habitual shopping. Harrison also contends that people who are shopping in a counter clockwise direction are likely to spend more money than people shopping in a clockwise direction. essentially concerning consumers and endusers. namely.g. related to a perception or attitude a firm holds towards its product or service. it is understood that supermarkets capitalize on this fact. the production orientation. Found on the capturing right-hand side are usually appealing products that a shopper might impulsively e.[8][9] Orientation Profit driver Western European Description . an umbrella when the weather is dull. in the marketing context. 2010) reported that most people write with their right hand. Throughout history.

Thus. this signifies a firm exploiting economies of scale until the minimum efficient scale is reached. Product[9] Quality of the product until the 1960s A firm employing a product orientation is chiefly concerned with the quality of its own product. 1960s Such an orientation may suit scenarios in which a firm holds dead stock. . and not determining new consumer desires as such. coupled with a good certainty that consumer tastes will not rapidly alter (similar to the sales orientation). Consequently. this entails simply selling an already existing 1950s and product. A firm would also assume that as long as its product was of a high standard. people would buy and consume the product.timeframe Production[9] Production methods until the 1950s A firm focusing on a production orientation specializes in producing as much as possible of a given product or service. Selling[9] Selling methods A firm using a sales orientation focuses primarily on the selling/promotion of a particular product. and using promotion techniques to attain the highest sales possible. with little likelihood of changes in consumer tastes that would diminish demand. A production orientation may be deployed when a high demand for a product or service exists. or otherwise sells a product that is in high demand.

online marketing. . and is sometimes called personalized marketing or one-to-one marketing.Marketing [9] Needs and wants of customers 1970 to present day The 'marketing orientation' is perhaps the most common orientation used in contemporary marketing. use R&D to develop a product attuned to the revealed information. Internet marketing is sometimes considered to be broad in scope. and then utilize promotion techniques to ensure persons know the product exists. because it not only refers to marketing on the Internet. [edit]Contemporary approaches Recent approaches in marketing include relationship marketing with focus on the customer. It targets its audience more precisely.[10] New forms of marketing also use the internet and are therefore called internet marketing or more generally e-marketing. It involves a firm essentially basing its marketing plans around the marketing concept. search engine marketing. business marketing or industrial marketing with focus on an organization or institution and social marketingwith focus on benefits to society. It attempts to perfect the segmentation strategy used in traditional marketing. and thus supplying products to suit new consumer tastes.desktop advertising or affiliate marketing. a firm would employ market research to gauge consumer desires. As an example. but also includes marketing done via e-mail and wireless media.

production.Orientation Profit driver Western Europea n timefram e Description Emphasis is placed on the whole relationship between suppliers Relationship Building and 1960s to and customers. The product focus lies Building and on industrial goods or capital Business keeping 1980s to goodsrather than marketing /Industrial relationships present consumer products or end marketing betweenorganizatio day products. In this context. advertising and communication to the customer are used. in either product. such as promotion. Different forms of ns marketing activities. or selling . marketing takes place between businesses or organizati ons. The aim is to marketing /Relations keeping good present provide the best possible hip management[10] customer relations day customer service and build customer loyalty. Social marketing[10] Benefit to society Similar characteristics as 1990s to marketing orientation but with present the added proviso that there will be a curtailment of any harmful day activities to society.

Many companies today have a customer focus (or market orientation). A firm in the market economy survives by producing goods that persons are willing and able to buy. "branding" is the 1980s to main company philosophy and present marketing is considered an day instrument of branding philosophy. the market change identification approach and the product innovation approach[citation needed]. [edit]Customer orientation Constructive criticism helps marketers adapt offerings to meet changing customer needs.methods. Consequently. Branding Brand value In this context. This implies that the company focuses its activities and products on consumer demands. . ascertaining consumer demand is vital for a firm's future viability and even existence as a going concern. Generally. there are three ways of doing this: the customer-driven approach.

Access). The SIVA Model provides a demand/customer-centric alternative to the well-known 4Ps supply side model (product.[11] A formal approach to this customer-focused marketing is known as SIVA[12] (Solution. Product Solution Promotion Information Price Value Place Access . History attests to many products that were commercial failures in spite of being technological breakthroughs. This system is basically the four Ps renamed and reworded to provide a customer focus. No strategy is pursued until it passes the test of consumer research. placement. Value. Every aspect of a market offering. The rationale for this approach is that there is no reason to spend R&D funds developing products that people will not buy. The starting point is always the consumer. promotion) of marketing management. consumer wants are the drivers of all strategic marketing decisions. price. is driven by the needs of potential consumers. including the nature of the product itself. Information.In the consumer-driven approach.

but because the value networks in which they profitably operated included customers who could not value a disruptive innovation at the time and capability state of its emergence and thus actively dissuaded the firms from developing it. This means looking beyond current-state customer focus to predict what customers will be demanding some years in the future. even if they themselves discount the prediction. They do not invalidate or contradict the principle of customer focus. The work of Christensen and colleagues[13] on disruptive technology has produced a theoretical framework that explains the failure of firms not because they were technologically inept (often quite the opposite). they simply add extra dimensions of awareness and caution to it. treating it as only a subset of one's corporate strategy rather than the sole driving factor. Some qualifications or caveats for customer focus exist.If any of the 4Ps were problematic or were not in the marketing factor of the business. so the consumer demand on its products will decrease. Pursuing new markets (thus new value networks) when they are still in a commercially inferior or . the business could be in trouble and so other companies may appear in the surroundings of the company. rather. The lessons drawn from this work include:   Taking customer focus with a grain of salt.

is not violated here²just expanded upon. simply because their potential to grow and intersect with established markets and value networks looks like a likely bet. A lesson from this type of situation is to be smarter about the true test validity of instruments like surveys. Other caveats of customer focus are:   The extent to which what customers say they want does not match their purchasing decisions. Thus surveys of customers might claim that 70% of a restaurant's customers want healthier choices on the menu. or incubating small. or being close to the customers. financially distinct units within one's organization to compete against them. A corollary argument is that "truly understanding customers sometimes means understanding them better than they understand themselves. This may involve buying stakes in the stock of smaller firms. acquiring them outright. but only 10% of them actually buy the new items once they are offered. This might be acceptable except for the extent to which those items are money-losing propositions for the business.unattractive state. bleeding red ink. The extent to which customers are currently ignorant of what one might argue they should want²which is dicey because whether it can be acted upon affordably depends on whether or how soon the ." Thus one could argue that the principle of customer focus.

customers will learn. IT hardware and software capabilities and automobile features are examples. might say something different today. production and promotion of the product. With this in mind. or be convinced. otherwise. a firm's finance department would be consulted. The production department would then start to manufacture the product. Production may oppose . a firm's marketing department is often seen as of prime importance within the functional level of an organization. etc. or a new usage for an existing product. or 6% better fuel efficiency in their vehicle. pricing. a marketing department could ascertain (via marketing research) that consumers desired a new type of product. [edit]Organizational orientation In this sense. the marketing department would inform the R&D department to create a prototype of a product/service based on consumers' new desires. while the marketing department would focus on the promotion. distribution. Interdepartmental conflicts may occur. should a firm adhere to the marketing orientation. Information from an organization's marketing department would be used to guide the actions of other departments within the firm. Customers who in 1997 said that they would not place any value on internet browsing capability on a mobile phone. Additionally. because the value proposition of those opportunities has changed. of the product. with respect to securing appropriate funding for the development. As an example.

support and servicing of new capital stock. which is appealing to supermarkets because it can "increase sales without the need to give people discounts. and several feedback mechanisms to get product popularity information to consumers are mentioned.[14] It shared mechanisms to increase impulse buying and get people "to buy more by playing on the herd instinct.the installation." a Massachusetts company exploiting . since it could undermine a healthy cash flow for the organization.000 people downloaded previously unknown songs" (Columbia University. A "swarmmoves" model was introduced by a Florida Institute of Technology researcher. New York)." Other recent studies on the "power of social influence" include an "artificial music market in which some 19. a Japanese chain of convenience stores which orders its products based on "sales data from department stores and research companies. Finance may oppose the required capital expenditure. including smart card technology and the use of Radio Frequency Identification Tagtechnology. which may be needed to manufacture a new product. The Economist reported a recent conference in Rome on the subject of the simulation of adaptive human behavior. [edit]Herd behavior Herd behavior in marketing is used to explain the dependencies of customers' mutual behavior." The basic idea is that people will buy more of products that are seen to be popular.

Marketing researchers use statistical methods such as quantitative research. eBay)..knowledge of social networking to improve sales. and online retailers who are increasingly informing consumers about "which products are popular with likeminded consumers" (e. gauge the nature of a firm's marketing environment and attain information from suppliers. marketers are turning to forms of permission marketing such as branded content. see also employer branding. Amazon.g. This information is then used by managers to plan marketing activities.  With consumers' eroding attention span and willingness to give time to advertising messages. services. custom media andreality marketing. and ideas. qualitative . [edit]Marketing research  Main article: Marketing research Marketing research involves conducting research to support marketing activities. [edit]Further orientations An emerging area of study and practice concerns internal marketing. or how employees are trained and managed to deliver the brand in a way that positively impacts the acquisition and retention of customers.  Diffusion of innovations research explores how and why people adopt new products. and the statistical interpretation of data into information.

[edit]Marketing environment Main article: Marketing environment [edit]Market segmentation Main article: Market segmentation Market segmentation pertains to the division of a market of consumers into persons with similar needs and wants.research. Kellogg's cereals. linear regression. Crunchy Nut Cornflakes are . Chi-squared tests. accurate. etc. market research is a subset of marketing research. binomial distributions. frequency distributions. As an example. Thus. collection and interpretation of data and disseminating information formally in the form of a report. including the definition of a problem. correlations. Market research pertains to research in a given market. reliable. In contrast. Frosties are marketed to children. after selecting a suitable market segment. to interpret their findings and convert data into information. a firm may conduct research in a target market. development of a research plan. and current information. The task of marketing research is to provide management with relevant. poisson distributions. The marketing research process spans a number of stages. valid. marketing research relates to all research conducted within marketing.hypothesis tests. For instance. A distinction should be made between marketing research and market research.

an example of primary research would be market research conducted into health foods. In this way. which is used solely to ascertain the needs/wants of the  . traits. which involves the conduction and compilation of research for a specific purpose. both with similar needs. [edit]Types of marketing research Marketing research. Accordingly. as a sub-set aspect of marketing activities. Target and Position. Market segmentation can be defined in terms of the STP acronym. can be divided into the following parts: Primary research (also known as field research). but often used to support another purpose or end goal.  Secondary research (also referred to as desk research). and wants.marketed to adults. Both goods denote two products which are marketed to two distinct groups of persons. the diversified tastes of contemporary Western consumers can be served better. Market segmentation allows for a better allocation of a firm's finite resources. A firm only possesses a certain amount of resources. With growing diversity in the tastes of modern consumers. initially conducted for one purpose. firms are taking note of the benefit of servicing a multiplicity of new markets. it must make choices (and incur the related costs) in servicing specific groups of consumers. By these definitions. meaning Segment.

The appropriateness of each mode of research depends on whether data can be quantified (quantitative research). given that it is used for a purpose other than the one for which it was intended. respectively. for the purpose of deriving a conclusion via a research process.target market for health foods. There also exist additional modes of marketing research. collect and interpret from data to information. pertain to numerical and non-numerical research methods and techniques. Primary research is often expensive to prepare. while secondary research is relatively inexpensive. as the term suggests. describes "what is". which. . non-numeric or abstract concepts are required to be studied (qualitative research). it often can become outdated and outmoded. Predictive research. Secondary research in this case would be research pertaining to health foods. Nevertheless. pertaining to research that investigates an assumption. which. Descriptive research. meaning research conducted to predict a future occurrence. or whether subjective. Conclusive research. which are:     Exploratory research. but used by a firm wishing to develop an unrelated product. Primary research can also be broken down into quantitative research and qualitative research. as the terms suggest.

(October 2009) Main article: Marketing plan The marketing planning process involves forging a plan for a firm's marketing activities. However. this general business strategy would be interpreted and implemented in different contexts throughout the firm. as well as to an organization's overall marketing strategy. Thus. an organization's marketing planning process is derived from its overall business strategy. The senior management of a firm would formulate a general business strategy for a firm. A given firm may hold numerous products in the marketplace. spanning numerous and sometimes wholly unrelated industries. There are several levels of marketing objectives within an organization.[edit]Marketing planning This section may require cleanup to meet Wikipedia's quality standards. . Accordingly. the intended marketing activities are incorporated into this plan. Generally speaking.) Pleaseimprove this section if you can. A marketing plan can also pertain to a specific product. The talk page may contain suggestions. (Consider using more specific clean up instructions. [edit]Marketing strategy The field of marketing strategy encompasses the strategy involved in the management of a given product. when top management are devising the firm's strategic direction or mission. a plan is required in order to effectively manage such products.

whether selling to the consumer. [edit]Marketing specializations With the rapidly emerging force of globalization. Thus. Chevrolet. firms need to reorient their marketing strategies to meet the challenges of the global marketplace. For example. Each scenario requires a unique marketing strategy. Buying behavior is usually split into two prime strands. or any other large global car maker. Listed below are some prominent marketing strategy models. Nissan. Moreover.[15] [edit]Buying behaviour A marketing firm must ascertain the nature of customers' buying behavior if it is to market its product properly.Evidently. known . the distinction between marketing within a firm's home country and marketing within external markets is disappearing very quickly. a startup car manufacturing firm would face little success should it attempt to rival Toyota. In order to entice and persuade a consumer to buy a product. a company needs to weigh up and ascertain how to utilize its finite resources. in addition to sustaining their competitiveness within home markets. may be made. Ford. marketers try to determine the behavioral process of how a given product is purchased. a product may be reaching the end of its lifecycle. With this in mind. or a ceasing of production. the issue of divest.

In this case. or to another business. Following this stage. The purchase decision is then made. This could then develop into consumer loyalty to the firm producing the sneakers. comprising an appraisal of the value/utility brought by the purchase of the sneakers. a post-purchase evaluation is often conducted. then a repeat purchase may be made. the consumer may search for alternative means to satisfy the need/want. [edit]B2C buying behaviour This mode of behaviour concerns consumers and their purchase of a given product. If the information search is insufficient. B2C and B2B behavior are not precise terms. as similarities and . sandals. B2B marketing involves one business marketing a product or service to another business. this may mean buying leather shoes. known as business-to-business (B2B). This may include perusing media outlets. in which the consumer actually buys the product.[16] "B2B" stands for Business to Business. For example. but most commonly consists of information gathered from family and friends. If the value/utility is high. if one imagines a pair of sneakers.as business-to-consumer (B2C). etc. the desire for a pair of sneakers would be followed by an information search on available types/brands. [edit]B2B buying behaviour Relates to organizational/industrial buying behavior.

[edit]Use of technologies Marketing management can also rely on various technologies within the scope of its marketing efforts. the notebook personal computer has gained significant market share among laptops. the launch of smartphones into the cellphone market is commonly derived from a demand among consumers for more technologically advanced products. In recent years. leading to marketing managers being cognizant of the latest technological developments. Marketing researchers can use such systems to devise better methods of converting data into information. aiding in better processing and storage of data.differences exist. In a modified re-buy scenario. all stages are conducted. Information technology typically progresses at a fast rate. largely due to its more user-friendly size and portability. Computer-based information systems can be employed. and for the creation of enhanced data gathering methods. A firm can . the fifth and sixth stages are precluded. the fourth. with some key differences listed below: In a straight re-buy. Information technology can aid in enhancing an MKIS' software and hardware components. and improve a company's marketing decision-making process. fifth and sixth stages are omitted. Moreover. In a new buy.

mobile phone applications and more recently.. tasted. etc. a service is used and consumed simultaneously)  It does not possess material form. telex. Data can be mined from various sources such as online forms. Using the World Wide Web. If one buys a train ticket. and thus cannot be touched. the use of the train is typically experienced concurrently with the purchase of the  . or smelled. heard. seen.  The use of a service is inherently subjective. Recently. Prior to the mass usage of the Internet. such transfers of information would have taken longer to send. A service (as opposed to a good) is typically defined as follows: The use of it is inseparable from its purchase (i. social media. Technological advancements can lessen barriers between countries and regions. there has been a large emphasis on data analytics. meaning that several persons experiencing a service would each experience it uniquely. [edit]Services marketing Services marketing relates to the marketing of services. For example. especially if done via snail mail.e. firms can quickly dispatch information from one country to another without much restriction. as opposed to tangible products.lose out to competitors should it ignore technological innovations in its industry. a train ride can be deemed a service.

but the food is tangible. Although the train is a physical object. one is not paying for the permanent ownership of the tangible components of the train. 33333333333333333333333333333333333333333333 marketing planning . Services (compared with goods) can also be viewed as a spectrum. nor are all pure services. Not all products are pure goods. where a waiter's service is intangible.ticket. These are summarised in the diagram below: .strategic marketing process Macdonald (1995) suggests that several stages have to be completed in order to arrive at a strategic marketing plan. An example would be a restaurant.

top level management will not have knowledge and expertise that matches subordinate management. In this situation.The extent to which each part of the above process needs to be carried out depends on the size and complexity of the business. it makes sense to put formal marketing planning procedures in place throughout the organisation. where senior management have a strong knowledge and detailed understanding of the overall business. it may not be necessary to formalise the marketing planning process. . in a highly diversified business. By contrast. In an un diversified business.

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