ROLE OF TRADE MARKETING AND ACTIVATIONS

Sales & Marketing, in the context of today and yesterday have undergone lots of changes. In between a Sales and Marketing a new domain has caught its attention and that is Trade Marketing. Known by Many names -- Activations, Business Development, Promotions, etc etc, but I would always love to call it Trade Marketing and would like to keep this domain as a separate entity, though in today's context all three domains have much of intercept.

What is Trade Marketing:

Of all the definitions I liked the definition of "Wiki", it says:

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.

Why I was surprised and what made me write on this domain is, even Wiki has only definition and nothing more. And there is not much of material and bibles (Kotler) on this.

Expanding and Explaining the definition

Let us say a company is going to launch a product "XYZ", Marketing would start from whether there is a demand for this, latent demand, blue ocean, brand architecture would be compared to various competitors etc etc. Then once a product is conceptualised, the quality department would generate proto-types and will come up with final product. In the mean time marketing would develop packaging ideas, STP ideas, branding, media etc. And final product with brand architecture and Marketing launch plan would be ready.

In the present scenario unlike past, the brand/new product would be handed over to sales by a domain called trade marketing. Trade marketing would pitch from devising Launch Norms, launch schemes (trade loads or consumer promos), displays, activation programs (channel specific incentives, collateral) and consumer contact programs. Therefore, trade marketing should provide sales outlets with customer & shopper-based value creation plans.

Tools with 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.

In today's scenario the companies are focusing more on Weighted distribution rather than Numeric Distribution. And thus, the concept of channel specific approach has been implemented by almost all major companies. By channel specific approach, i mean is considering and catering to different distribution channels as separately with channel need based servicing and activation programs. Modern Trade is one channel considered as separate entity, another is wholesale, then cosmetic, then Hi-value outlets, mass outlets, different channels as per the industry.

Trade marketing plays major role in devising strategy to focus on different channels. Today, companies have separate trade marketing managers for separate channels and some of the companies have separate managers even with in a brand fro separate channels. Let us now discuss different programs/activations which companies are using for various channels.

1. Wholesale channel, which majorly thrives on loyalty has been put under point system by many companies (HUL, COlPAL, Marico, P & G to name a few). The wholesaler purchases from the company and he earns certain points which he can redeem as per company policy.

2. Hi-value outlets, in retail are given some %age extra on target based purchase and may be they are offered some permanent displays.

3. Chemist outlets would have assortment based purchase incentives.

4. Modern Trade has maximum of promos in package, from displays to consumer promos, to incentives etc etc.

How Trade Marketing has changed the scenario:

Previously it used to be Marketing Battles-- Branding, advertising, etc etc. Then sales people used to fight for placement and visibility of product. The advent of Trade Marketing has added ammunition to whole scenario, more ammunition you have more chances of success are there.

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