the trade marketing appeared in the 1980s in France in the field of mass distribution. The term was introduced by the authors Étienne Thil and Claude Baroux, in their book “Un pavé dans la marque”: the approach, new at the time, consisted of rethinking the relationship between suppliers and distributors in order to satisfy their common interests.
> Download: How to achieve transactional communication by SMS ” align=”middle”/>For the supplier, this means communicating directly at the point of sale, physical or digital, of the distributor. The partnership is established on the basis of the sharing of product and customer data held by the supplier and the distributor: on the strength of this increased knowledge, each strengthens its sales strategy.
What is trade marketing?
Trade marketing is a B2B approach to marketing, applied to commercial relations between a supplier and a distributor. The supplier considers the distributor as its customer: the supplier implements the marketing means necessary to optimize its sales to the end consumer, through the distributor.
Example of trade marketing : LSA, consumer magazine in France, publishes in 1997 a news item on a trade marketing operation co-organized by Carrefour and Danone. At the entrance to each hypermarket, a hostess gives customers the latest copy of the magazine published by the food multinational free of charge. Danone thus promotes its brand directly at the point of sale of its products. The objective of the operation: to improve brand awareness, to increase sales. Result: the increase in sales benefits both the supplier and the distributor.
Why do trade marketing?
Traditionally, supplier and distributor communicated each for himself, in a compartmentalized way. Depending on its distribution strategy, the supplier promoted its brand via TV, press and radio spots, then through digital marketing media: a website dedicated to the brand, newsletters sent by the brand or even a page brand on social media. For its part, the distributor focused its marketing on the strengths specific to its brand, without highlighting the brands it distributed. From now on, trade marketing applied to mass distribution and e-commerce interweaves the communication strategies of the supplier and the distributor, so as to satisfy their common challenges. The distributor positions the supplier’s brand in its advertising campaigns, supplier and distributor co-organize promotional operations, they collaborate in the implementation of merchandising. Beyond the purely marketing aspect, trade marketing encompasses the concerted actions of the logistics and product development functions.
Doing trade marketing benefits the supplier, the distributor and the end consumer:
- Supplier increases its notoriety and strengthens the impact of its marketing strategy. The marketing actions implemented at the point of sale directly affect customers at the time of their purchases, these actions deployed operationally by the distributor relay the marketing actions deployed by the supplier as part of its overall strategy. Example: a food brand communicates on its Facebook page about the launch of its new organic spread; the supermarket distributes a reduction coupon at the entrance to its store; the customer is all the more encouraged to test the new product.
- The distributor, for his part, benefits from trade marketing in several respects. He increases sales volume on the product references of the partner supplier that he promotes: he develops his turnover jointly with the supplier. The distributor also takes advantage of promotional operations to satisfy its customers: it builds customer loyalty. The distributor also generates advertising revenue when he monetizes the communication actions. Example: Amazon offers sellers a form of digital trade marketing, through its sponsored products program; the seller pays for a campaign to increase its sales, Amazon is remunerated in return.
- The final consumer, for his part, is accompanied in its choice of products thanks to the suggestions addressed to him directly at the physical or digital point of sale. He takes advantage, where applicable, of promotions granted as part of the trade marketing operation.
In terms of logistics, trade marketing offers a strategic advantage. The partners improve their control of the chain and reduce their costs: supplies are rationalized, the fixing of final selling prices is optimized. On the product development aspect, trade marketing makes it possible to improve product design based on the study of customer behavior at the point of sale.
How to do trade marketing?
To do trade marketing, the company proceeds in stages:
- Identify useful partnerships : the supplier and the distributor must share common or complementary interests and values, so that each contributes to the development of the other. Example: the young innovative brand and the historic distribution brand have an interest in doing trade marketing; the retailer takes advantage of the brand’s attraction in terms of innovation to improve its image, while the brand takes advantage of the retailer’s large customer file to develop rapidly.
- Decide on trade marketing actions according to the respective objectives : the common marketing strategy, digital or traditional, materializes through various actions. Merchandising and event animation by a salesperson at the point of sale are very widespread classic techniques. In the digital age, companies are considering new actions in partnership: emailing, social networks and display, in particular, are widely used in the context of digital trade marketing. Concretely, the supplier and the distributor implement the relevant actions with regard to their objectives. Examples: the brand that is going digital launches a competition on its Facebook page, relayed by its distributor to reach a wider audience; the supplier who observes a drop in sales on a product distributes reduction coupons at points of sale.
- Negotiate the conditions and formalize the relationship : trade marketing actions are generally financed by the supplier. He pays for POS, sponsored campaigns or promotional offers. However, the supplier negotiates the conditions of the partnership: he can use the argument of customer information for this purpose. Like the distributor, the supplier has customer data. Since the partnership is based on data sharing, the supplier who is willing to exchange a large volume of it can monetize this intangible asset to reduce trade marketing costs. For a constructive and secure relationship, the two companies contract in detail the framework of their partnership.
- Measure the results of the co-marketing strategy : using an ad hoc tool, companies share the results of their trade marketing actions based on key performance indicators.
Transparency is essential in the context of trade marketing: companies do not see themselves as competitors but as partners, who pool their expertise and assets in the service of their respective commercial interests, and in accordance with consumer expectations.
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