Improve Trade Promotion Effectiveness with Consumer Goods Cloud (2024)

FAQs

What is trade promotion in CPG? ›

Trade promotion, often referred to as trade sales promotion or trade in promotion, is a marketing strategy used by manufacturers and CPG brands to incentivize retailers, wholesalers, and distributors to carry, promote, and sell their products.

Among the most common are trade shows, sales contests, trade allowances, training, product demonstrations, free merchandise and push money. One of the most common types of sales promotions, particularly in in B2B markets, are trade shows.

Consumer and trade promotions are short-term marketing strategies. Consumer promotions are used by retailers to induce customers to buy products or services. Trade promotions are used by manufacturers and wholesalers to get their business buyers to purchase products for resale.

Trade promotion optimization (TPO) is the process of utilizing integrated goals, factoring in promotion (e.g. price, duration) and supply constraints, and predictive analytics to create continuously improving trade promotion strategies and results.

Digital Transformation. Embracing digital transformation is crucial for CPG marketers to remain competitive. This includes adopting advanced analytics, artificial intelligence, omnicommerce strategies, and automation tools to optimize marketing strategies, personalize customer experiences, and drive sales.

In CPG trade promotion spending, it's strategic to invest more in your best-performing products – those that have shown strong responses to promotions or have higher profit margins. This method focuses on maximizing the impact of your promotions where it's most effective.

Samples, coupons, premiums, contests, and rebates are examples of consumer sales promotions.

Trade oriented sales promotions are inducements offered by manufacturers to wholesalers and retailers. These include off -invoice discounts, merchandise allowances, bonus packs and samples.

Coupons: Coupons offer a discount or deal when a customer purchases a product. Different types of coupons include digital coupons, manufacturer's coupons, and store coupons. These can attract price-sensitive customers and also induce trial of new or existing products.

Examples include “cents off” promotions, where manufactures or retailers temporarily reduce the price of a product, and Bonus Pack promotions which offer extra product for free. Consumers benefit from either paying a lower price on a product or getting more of a product for the same price.

What is the primary goal of trade promotions? ›

The primary goal of trade promotions is to encourage sales people, retailers, and wholesalers to stock and sell more of a product. Firms employ the strategy to increase sales through retail channels.

Enhance product or brand awareness. Build market share. Increase demand on a retailer level. Serve as a response to a competitor's own promotional activity.

Trade promotion management (TPM) is the process of budgeting, planning, and reconciling a company's trade spending, intending to drive sales and profitability while increasing the productivity of sales and finance personnel.

Trade promotion is part of revenue management and refers to marketing campaigns directed at wholesalers or retailers rather than at final consumers. It is a marketing technique aimed at increasing demand for products in retail stores.

Trade-in promotion is a marketing strategy where customers are encouraged to exchange their old or used products for a new one, often with a monetary incentive or discount. This approach not only boosts sales of the new product, but also helps companies to take back older versions, which may be refurbished or recycled.

Trade Promotion refers to marketing activities that are executed in retail between these two partners. Trade Promotion is a marketing technique aimed at increasing demand for products in retail stores based on special pricing, display fixtures, demonstrations, value-added bonuses, no-obligation gifts, and more.

While sales promotions target customers to drive demand, trade promotion focuses on the supply side. As such, it is a Business-to-Business (B2B) marketing strategy. It is better to use trade sales promotions rather than a pull strategy because it is more effective in pushing products through the marketing channel.