Overview of Trade Promotion

Trade Promotion

Considerations

Buying/purchase allowances

• Offer short-term discounts.
• Can be deducted from a manufacturer’s invoice.
• Simple implementation.
• Preferred by retailers.

Selling allowances

• For count/recount sales allowances, warehouse inventory must be counted before and after promotion and scanner data is used.
• For advertising and merchandising, a retailer must perform and proof-of-purchase must be validated. These programs may be cumbersome to administer and retailers may offer some resistance.

In-ad coupons and rebates

• Brand coupons or rebates are distributed by retailers in local media and store flyers.
• Funds are reimbursed by brand marketers.

Retailer or sales force incentives

• Spiffs (sales performance incentive for forcing sales.)
• Mystery shoppers.
• Contests.
• Premiums.
• Retailers may object.

Slotting allowances

• Marketers pay administrative costs to stock new products.
• Failure fees and deslotting allowances.