Trade Schemes for Trade Promotion

Some of the Trade Schemes:
Buy Cadbury’s products worth Rs.3000/- and get 30 any chocolates worth Rs.5 free.

Buy a box of Munch and get 1 Munch free.

Point-of-purchase displays i.e. product displays and information sheets are useful in reaching the consumer at the point of purchase and often encourage retailers to support ones brand.

POP promotions can help win precious shelf space and exposure in a retail setting. From a retailer’s perspective, a POP display should be designed to draw attention to a brand, increase turnover, and possibly distribute coupons and sweepstake entry forms.

Companies do P-O-P displays as and when they have sales promotion schemes going on. Some companies that do a lot of P-O-P displays on a regular basis are Gillette, Vicks, Duracell, Pepsi, Coke.

Cash rebate

This is a form of delayed value promotion for the retailer. Only after the proof of performance is furnished, the retailer is given a cheque for the amount of discount.Once a retailer has met the laid down conditions, the rebate is given to the retailer. The advantage of this method is that the rebate is given only after the retailer has performed to qualify for the rebate.

Free goods

A free goods promotion is a deviation from straight price cut. The promotion offer to trade is in the form of extra quantity of purchased product “free”.Free goods deal often encourages resellers to stock more during the promotion period. For the manufacturer, it is an excellent promotion because it costs less than it otherwise appears.

Buy 24 Close Up toothpaste and get 1 free.Buy Cadbury’s products worth Rs.3000/- and get 30 any chocolates worth Rs.5 free

Trade coupons

It is a manufacturer-initiated sales promotion, however, the coupon distribution is undertaken by retailers, either through local print medium or in some other manner. The important thing about such coupons is that they can be redeemed only at the distributing store. There is an agreement between the retailer and the manufacturer that some agreed allowance will be paid to the retailer. Generally this is in the form of re-imbursement of some amount of money to the retailer for each coupon redeemed. The distributing retailer gets the double benefit due to the increase in store traffic and the incentive of reimbursement from the manufacturer. This is a string incentive to the retailer to arrange displays and promote the coupon offer.

SPIFFS (also called ‘push money’)

It is a monetary reward given to the salesforce of the dealers to sell a manufacturers product. For example, a manufacturer of washing machines may offer Rs.500 to each sales person who sells the manufacturers’ brand of washing machine. The SPIFF money varies as does the willingness of the dealers to allow the salesforce to accept the offer. Dealers who carry product brands of different manufacturers generally hesitate to allow such offers.


Incentives to the members of the trade include a variety of tactics like awards in the form of travel, gifts, or cash bonuses for reaching targeted sales levels that induce retailers and wholesalers to give a firms’ brand added attention. The incentive does not have to be large or expensive to be effective. Another form of trade incentive is referred to as ‘push money’ i.e. SPIFFS.

Sales-training Programmes

An increasingly popular trade promotion is to provide training for retail store personnel. This method is used specially for consumer durables like personal computers, exercise equipment, etc. The increased complexity of these products has made it important for manufacturers to ensure that the proper factual information and persuasive themes are reaching consumers at the point of purchase. For personnel at large retail stores, manufacturers can hold special classes that feature product information, demonstrations, and training about sales techniques. Another method to give information would be the use of videotapes and brochures.

Trade shows

At trade shows, related products from many manufacturers are displayed and demonstrated to members of the trade. Literally, every industry has trade shows.Their representatives are there to explain the products and services and perhaps make an important contact for the sales force. Trade shows can be critically important to a small firm that cannot afford advertising and has a sales force too small to reach all its potential customers.


Share This Post

Post Comment