What is trade promotion (trade promotion)?
Trade promotion (trade promotion) is a set of incentive marketing tools used to increase and / or accelerate sales of goods and services. What is the difference between, say, advertising and trade promotion? While advertising is aimed at shaping the desire to buy, trade promotion (trade promotion) is aimed at ensuring the very possibility of such a purchase. Not quite clear?
I advertise: in the store on Zosima Pyryev Street, house number 3, there is a cool Thing for easy opening of sardine cans. Well, let's say you convinced you ... Next, convinced of the need to buy, will go to the address indicated and, most likely, will not find anything there, because the thing is that the store is most likely heard at the store, but here’s the desire to deliver this item on the shelf, to include in the assortment list of goods, to maintain inventory accounting for this product in the store has not been formed. That is, advertising is advertising, but the cool Thing is not a reason for the marketing channel to do this Thing.
Another example: The thing is already present in the assortment of the store, it is even well known to potential buyers (thanks to advertising). But in the department the buyer is faced with the following problem - the thing for opening sardines is 1.5 times more expensive than the usual mechanical opener with a wooden handle. It is then that the buyer wakes up doubts about the feasibility of buying things, even spying on all the effectiveness of advertising and not laziness of the store that put the Thing on the counter.
What are the goals of buying incentives?
The objectives of stimulating the purchase of goods by the buyer are as follows:
increase the number of buyers;
increase the number of goods purchased by the same buyer.
What are the objectives of trade promotion?
The promotion of trade (trade promotion) can pursue many goals. It all depends on the problem. Then I will say a very important thing, so important that I will start it with a new paragraph.
It is necessary to stimulate trade when it (trade) is not stimulated when there is a problem with sales. This suggests the correct conclusion: trade promotion - measures aimed at what is a brake on product promotion through the marketing channel from the manufacturer to the buyer. The consumer (while uplifting, let us say that he is also the buyer), undoubtedly, has the greatest significance. The entire marketing strategy boils down to ensuring the possibility of buying your product. A wide range of methods to stimulate trade was created for the sole purpose - in the most effective way to attract consumers to the product and satisfy its needs.
The seller should not be overlooked by the trade promotion if he (the seller) is guilty of weak sales of goods. I will say more, if we only suspect that the seller is guilty, this is an occasion to think about trade promotion measures aimed at the seller, since the success of the enterprise depends on his abilities and ability to sell goods.
The seller’s incentive goal is to turn an inert and indifferent seller to a product, if not into your adept, then into a decently informed merchant. The reseller, being a link between the producer and the consumer, is a specific object of incentives and an object of sales promoution, which performs observational, regulatory (deterrent and stimulating) functions. At the same time, incentive functions may be different:
give the product a certain image to make it easily recognizable or to prevent its sales;
increase the amount of goods entering the trading network;
to increase the interest of the intermediary in the active marketing of a particular brand of goods.
Goals to stimulate trade
Thus, we will try to group targets into a table.
Increase the number of consumers;
Increase the amount of goods by the consumer;
Increase turnover to the indicators outlined in the marketing plan;
Run sales plan indicators.
Accelerate the sale of the most profitable product;
Increase the turnover of someone product;
Get rid of excess stocks:
Give a regular sale of seasonal goods;
To counter the emerging competitors;
To revive the sale of goods, sales of which is experiencing stagnation.
Benefit from annual events (Christmas, New Year, etc.);
Take advantage of a separate opportunity (anniversary of the creation of the company, opening a new branch, etc.);
Support an advertising campaign.
Trade promotion and product life cycle
As said above, sales promotion marketing must be built from the problem. If the problem with sales lies in the plane of the product life cycle (a novelty, an outdated product being withdrawn from the assortment), then the sales promotion should correspond to the current stage in the product life cycle.
Phase "Selling news"
At the time of the start of product promotion to the market, three main factors impede the sale of goods:
ThorThis staff cannot immediately become an “adherent” of the new product. Therefore, there is a need to interest trading organizations through incentives and to provide special measures to convince sales staff of the value of a new product. Trade representatives are reluctant to take risks associated with the sale of a new product. Numerous failures make the intermediary wait until the last one to “approve” the new product. The consumer also shows restraint when buying a new product. Promotion of sales, prompting him to try a new product, facilitates familiarization with it. The growth of sales is promoted by the use of special trial prices, sample offers, payment by installments, the provision of an additional quantity of goods, and more. The Active Offer Phase In the period of sales growth, the use of incentives is of strategic importance. This is a special stage in the product life cycle. It becomes famous and new buyers are regularly found. At this stage, preference is given to advertising, rather than sales promotion. However, to quickly and effectively respond to competitors' actions, increase the number of sales outlets for a product, selectively influence an object, use sales promotion. “Planned sales” Phase When a product is well known and has regular customers, the manufacturer uses incentives to basis. The effectiveness of advertising at this stage decreases. For the revival of interest in the product using different occasions (holidays, introducing new packaging and more). Phase "Removal from the sales network" By the end of the phase of maturity of the goods comes saturation, and then decline. At this stage, all stimulation of sales growth stops, so as not to prevent the withdrawal of goods from circulation. However, actions to stimulate the sale of stocks (stock) are all the same sales promotion. A trade promotion program. A trade promotion program is written for a period that is said to be executed like any action program and is analyzed as a result of its development. The sales promotion program includes the following descriptive sections: Starting Position. Place the goods on the market. A brief summary of the main source data related to the product, market, consumer and competitive products. Goals for the coming period. Indicates completed during the previous period, measures to stimulate sales of goods and the study of competing products; analyzes the results of this activity; describes the problems and opportunities that should be used: - quality tasks (improving the image of the product in the eyes of the trading network by accelerating its turnover); - quantitative tasks (for example: increase in sales by 20% by the end of the incentive period). Action plan. Control over planned activities. The quality check of the planned activities is carried out by conducting tests before and after sales promotion; at the same time several outlets are selected and the sale is analyzed before and after the stimulation. Budget. A strictly defined budget is established for each sales promotion operation. This budget is included in the total annual budget. Schedule. Scheduled events for the year are presented in graphical form.