What is trade marketing

Trade marketing

Marketing activities of a manufacturer or distributor aimed at (potential) retailers of its goods.

The term stands for the special sales policy instruments of the trading company as well as for the sales promotion measures that the manufacturer implements for and with the trade. Trade marketing is the attempt to bring together the sometimes conflicting interests of manufacturers and retailers. E.g.
• The manufacturer wants to increase the market share of his product, the trade wants to retain customers with a range that is as balanced as possible.
• Manufacturers, but also retailers, want to distinguish themselves with consumers.
• The manufacturer wants to secure long-term sales. The retailer favors a product after the quick turnover.
• The manufacturer hopes for new competitive opportunities through innovations, the trade prefers to concentrate on successfully launched products.
Manufacturers can only exert direct influence on sales of their products up to the retail interface. At the interface to the consumer, it is left to the ability and will of the retailer to support sales with accompanying marketing measures. Manufacturers develop marketing strategies with two different goals.
• First of all, they convince the retailer that their products will increase their profits.
• Then they use trade marketing to induce consumers to turn to their products. Here the trade marketing instruments range from advertising and PR in the media to measures at the point of purchase (POP), i.e. in front of the shelves where the consumer makes his selection.
The type and quality of this trade marketing is also a decision factor for trade. If it takes his interests sufficiently into account and supports him in selling, then he is also ready to list manufacturers and provide them with appropriate shelf space. As a rule, the manufacturer even gains room to negotiate in the area of ​​confectionery if he can convince the trade of the sales-promoting effect of his trade marketing. With regard to the specialist trade, the manufacturer’s trade marketing is of further importance: As a service, it provides the specialist dealer on site with the skills that he cannot provide himself. The manufacturer offers conceptual and operational support for all sales measures. The aim of the manufacturer is to increase the probability of success of their acquisitions for the specialist retail partner and to bind them more tightly to themselves. Thus, the quality of its retail marketing is also a decisive competitive instrument for the manufacturer.

[s.a. Procurement marketing]

Trade marketing is delimited differently in the sales literature. When viewed more closely, only the sales-political activities of wholesalers and retailers are included in this calculation (cf. Liebmann / Zentes, 2001, p. 428ff.). The product range policy and the price policy including the special offer policy are highlighted as characteristic instrumental areas.

The sales market and procurement market orientation of the trading companies is taken into account in an expanded concept of trade marketing, which encompasses the entirety of all market-oriented activities.

In this comprehensive demarcation, trade marketing is understood to be a corporate policy of trade companies under the primacy of market orientation. According to this, trade marketing also includes the company factor combination policy, such as personnel policy, warehouse policy, transport policy. In this sense, Tietz (1993a, p. 181ff.) Speaks of trade program policy (service program policy). It includes:

- the basic structure policy

- the market policy

- the factor combination policy

- the funding policy.

The following instrumental areas are assigned to basic structural policy:

- the position in the retail chain

- the market reach, i.e. the extent of sales and procurement activities, so the spatial extent

- the location (location policy)

- the industry.

Tietz (1993a, p. 183) describes these instruments as instruments of market adjustment. Further basic structural policy instruments are:

- diversification

- the cooperation in horizontal and vertical terms, such as integration in communities of interests or contractual ties with manufacturers (contract marketing)

- the size of the company, i.e. the dimensioning of the potential factors, such as the sales and storage space and the staff.

The system of market policy instruments (market instruments) comprises the marketing instruments and the procurement instruments. Tietz (1993a, p. 299ff.) Divides the instruments into:

- goods and service related instruments

- pay-related instruments

- ancillary services related instruments

- information and communication-related instruments

- Goods process instruments (delivery policy).

The subject of the factor combination policy, which also includes marketing logistics, are (cf.Tietz, 1993a, p. 577ff.):

- the personnel policy, such as the workforce, personnel deployment and personnel training policy

- the area and area equipment policy, such as the shop fitting policy, the warehouse construction policy

- the (external) transport policy, such as the vehicle fleet policy, the delivery policy

- the inventory policy.

The combination of the basic structure-political, market-political and factor-combination-political instruments determines the types of business in trade. In this respect, the type of business policy can be viewed as a comprehensive form of the marketing mix policy of the trading companies.

The increasing independence of retail marketing concepts and the professionalization of retail marketing in recent years are an expression of the strengthening of retail. The emancipation of trade marketing replaced the phase of predominant marketing leadership in industry (cf. Tietz, 1984, p. 63ff.).

This emancipation is accompanied by a reorientation of the manufacturers' marketing. It is expressed in trade-oriented marketing activities, such as supporting the sales activities of the trade (in-store marketing) and training sales staff in the trade. Such measures by the manufacturer are often referred to as forms of trade marketing.

The orientation of the manufacturer marketing on the trade also leads to adjustments of the branding organization (organizational structure) in the industry, such as the form of account management (key account management).

i. w.S. all areas of trade or benefit program policy. These include • the basic structure policy, which includes all areas of the company, • market policy with the areas of sales policy - including marketing policy in the sense of the word - and procurement policy, • factor combination policy and cost policy, • financing policy. The table shows what you have to imagine in detail. Compared to manufacturer marketing, trade marketing has its own focus. The core is formed by the product range and price policy, including the special offer policy, but also the presentation and contact policy. Literature: Tietz, B., Der Handelsbetrieb, 2nd edition, Munich 1993.

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