Definition of Trade Promotion

Sales promotions can also be directed at members of the trade – wholesalers, distributors, and retailers.

It is intended to stimulate demand in the short run and help push the product through the distribution channel more immediately. Effective trade promotions can generate enthusiasm for a product and contribute to the loyalty distributors show for the brand. With the massive proliferation of new brands and brand extensions, manufacturers need to stimulate enthusiasm and loyalty among members of the trade and also need a way to get the attention of the buyers suffering from information overload.


Objectives for promotions in the trade market

When marketers devise incentives for the trade market, they are executing a push strategy – i.e. sales promotions directed at the trade help push a product into the distribution channel until it ultimately reaches the consumer.

  • Obtain initial distribution

    Because of the proliferation of brands in the consumer market, there is fierce competition for shelf space. Sales promotion incentives can help a firm gain initial distribution and shelf placement. Like consumers, members of the trade need a “ reason to choose” one brand over the other when it comes to allocating shelf space. A well conceived promotion incentive might sway them.
  • Increase order size

    Sales promotions techniques encourage wholesalers and retailers to order in large quantities, thus shifting the inventory burden to the channel and giving them benefits of economies of scale.
  • Increased store traffic

    Retailers can increase store traffic through sales promotions or events. A promotion that generates a lot of interest within a target audience can drive consumers to retail outlets.

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