Trade Marketing Activation: A Win-Win Strategy!

Trade marketing plays a significant role in brand activation. This strategy has been used for decades, ever since brick-and-mortar retailers began seeking growth drivers to increase sales and revenue in an increasingly competitive environment. Often summarized as highlighting a product or brand on an endcap, trade marketing strategies and the resulting activations are far broader than this simple point-of-sale display. To provide some answers, we offer a few tips in the following paragraphs...

Trade Marketing: A Little Theory

By combining the word “trade,” meaning both “exchange” and “commerce,” and “marketing,” which encompasses the entire process of creating, communicating, and delivering value to customers and managing relationships with them (American Marketing Association), we can easily grasp its scope. To clarify: this marketing strategy, based on exchange, primarily applies to relationships established between a supplier and a distributor (retailers, wholesalers, and increasingly, online-only retailers).

Within this framework of increasing demand from the end customer, aiming to boost revenue for both parties, let's revisit the context in which trade marketing was implemented. Faced with a major imbalance in relations between distributors and suppliers, it was necessary to find constructive solutions to change the nature of negotiations (often focused exclusively on price), which were based on a fundamental opposition, and to propose a new, win-win mode of collaboration.

• A win for the distributor, who will be able to involve the supplier in managing their sales space (previously the physical shelf space, now including the virtual sales space) in terms of inventory, product communication, point-of-sale optimization, sales promotions, and in-store events...
  
• A win for the supplier, who will be able to leverage other factors beyond direct trade discounts. These factors will be valued by the distributor and are essential for improving their product placement and visibility in the sales area, allowing them to differentiate themselves from the competition based on criteria other than price.
  

What are the objectives of a good trade marketing strategy?

If you market a product or service through distribution channels over which you have no control, then it's no secret that the competition is often fierce and ruthless, and that it's in your best interest to find creative ways to stand out. But what will be your main objectives with a good trade marketing strategy?

• 1 - Create a competitive advantage at the point of sale (your actions and messaging will differ from those of your competitors).
  
• 2 - Increase your visibility with your target audience (the larger the sales area, the harder it is to be visible and capture the customer's attention).
  
• 3 - Improve your profitability (improved sales, inventory turnover, distribution network/distribution ratio... Keep in mind that distributors don't like "dormant stock").
  
• 4 - Gain economic visibility (the stronger the partnerships you establish with your distributors, the more sustainable your actions will be, and the longer-term and less uncertain your customers' commitments will be).
  
  

  Prerequisites: Everyone Has Their Role

  
  Let's not forget the role of the distributor, which, to put it simply, is to bring supply and demand together by enabling suppliers to sell their products under the best possible commercial conditions.
  With that said, your role is product-market expertise. This role encompasses both your skills and your actions. In short, it includes customer knowledge (studies, expectations, statistics, sales history, etc.), communication (your public statements, your strategy for increasing your visibility, your brand identity, etc.), innovation (the evolution of your products and the market, new products, etc.), and the competition (the visibility of the listings of all or some distributors, the actions and strategies implemented in your market, etc.). We mustn't forget the equally strategic skills of logistics, human resources, and financial resources, particularly regarding payment terms.
  
  As you will have understood, the implementation of an impactful trade marketing strategy essentially relies on your ability to bring expertise through solutions to your distributors in return for which they will play more strongly with your products.
  
  
  

  Your Trade Marketing Actions

But let's start with an important point: there's no point in copying your competitors. The goal here is to differentiate yourself from the competition by aligning it with your objectives (short, medium, and long term).

• You want to increase your sales in the very short term: structure a proposal that will help you sell higher volumes (trade discounts, location, POS materials, additional sales force, etc.) while supporting the distributor with a form of product sales guarantee.
  
• You want to improve the quality of your presence at the point of sale: develop a proposal that enhances your shelf space and the brand image (merchandising, dedicated corner, etc.).
  
• You want to support a new product launch: implement a specific in-store promotional project (seasonal events, sales promoters during targeted periods, window display programs, outdoor advertising support, etc.).
  
• You want to improve your visibility with a multi/omnichannel distributor: offer content that combines physical elements. and digital (hybrid event in a special operation, exclusive audiovisual content, etc.)...
• ...
  
  Therefore, the range of possibilities is vast, as distributors' scope of intervention is 360°. In other words, be proactive in proposing solutions, because the spectrum of their needs is equally broad.
  This short article has primarily focused on illustrating the importance of trade marketing solutions for points of sale, but the logic remains the same (and increasingly complementary) in a digital trade marketing strategy. How will you provide win-win partnership solutions to an e-commerce site?
  
  So, if implementing a 360° trade marketing strategy is part of your plans, Agence I.S (an event communication and marketing agency located in the Île-de-France region, near Paris), through its IS Brand division, specializes in consulting, supporting, and managing this type of project. Whether your project is local, national, or international in scope, if you have a project or an idea, we can answer your questions and guide you toward its optimal realization.