Trade Promotion

• As per a research study around 47% of

the promotion pie is taken up by trade
promotion tools and only 28% goes to
consumer promotion.
 Current environment with Regard
to Trade Promotions
• Larger bargaining power of retailers with
increasing size
• Greater competition

Company’s sales force and its brand managers are often at odds over
trade promotion
Sales force asks for more trade promotion money to push the product on
retailers shelf, where as brand manager wants money for consumer
promotion and advertising
 Some Other Costs
• Promotion might decrease Long term
brand loyalty
• Inevitable distributed to wrong consumers
• Costs of special production runs, extra
sales force effort and handling
requirements
• Irritant to retailers: who may ask extra
trade allowances or refuse to cooperate
PLC versus Sales Promotion
Activity
Product Life Cycle Phase

Growth Mature Decline

Trade Med Low Low
Sales Promotion Activity

Shows
Training High Med Low
Premiums Med High High
Website High Low Low
POP Med High Med
Displays
Rebates Low Med High
Distribution Objective & Sales
Promotion
PLC Stage Distribution Sales Promotion
Objective
New product Trial Consumer promotion + Trade
launch Promotion
Growth Stage Market Trade promotion
expansion
Maturity Availability Trade promotion + Consumer
promotion
Decline Availability Trade promotion

Reintroducing a Trial + Trade promotion + Consumer

product Availability Promotion
Retailing

Sanjeev Varshney
 Nature and Importance of
Retailing
• Retailing: the sale, and all activities directly
related to the sale, of goods and services to
ultimate consumers for personal, nonbusiness
use.
• Retailers perform many activities such as
anticipating customers’ wants, developing
product assortments, acquiring market
information, and financing.
• E-tailers are retailers who operate online, as
opposed to having a physical store consumers
can visit in person.
Changing Macro-Microeconomic
Fundamentals
• Robust Gross domestic product (GDP)
growth (will touch almost 2 trillion pound in
next 10 years)
• Higher incomes
• Increasing personal consumption (650 bn
pound in another decade)
• Favorable demographics
– overall population has grown by 2.5 times in last
50 years, urban growth is 5 times-35%
– India will have lowest median age by 2030