TradePromotions

Trade promotions are marketing activities directed at intermediaries in the product distribution channel, such as wholesalers, distributors, and retailers, to stimulate demand for a product within the trade. They complement consumer-focused promotions by encouraging stocking, display, and promotion of a product at the point of sale.

Common forms include price reductions or allowances to retailers, display and merchandising allowances, slotting fees, and cooperative advertising funds. Additional tools include buy-downs, free goods, trade shows, and in-store demonstrations. The primary goals are to secure shelf space, improve visibility, accelerate stock turnover, and support consumer demand through the trade channel.

Management involves planning, budgeting, and coordinating with trading partners. Effectiveness is measured using incremental sales, trade lift, sell-through, and return on promotion investment. Trade Promotion Management (TPM) systems help manage agreements, funding, timing, and post-promotion analysis to improve efficiency.

Trade promotions can erode margins or create channel conflict if overused or poorly targeted. They require careful objective setting and alignment with brand strategy. Trends include data-driven planning, collaboration with retailers, and more rigorous evaluation to optimize promotion mix and profitability.