Trade Marketing

What is trade marketing?

Trade marketing connects B2B businesses with their consumers to get their products on shelves and increase consumer demand. This is accomplished through wholesalers, retailers, distributors, and other supply chain partners who effectively serve as go-betweens. 

Businesses and retailers can purchase products directly from the manufacturer. Trade marketing doesn’t necessarily involve communicating directly with customers. It’s more relevant for products sold in physical locations than e-commerce stores.

Trade promotion management (TPM) software helps execute and report on trade marketing campaigns. Things like special pricing, product displays, and coupons can be managed with these platforms.

Types of trade marketing strategies

There are dozens of types of trade marketing, and many businesses mix and match these strategies. Some of these include:

• Trade shows and trade fairs
• Trade promotions (coupons, free samples, gifts, wholesale discounts, regular discounts)
• Co-marketing partnerships
• Company and product branding efforts
• Company website
• Digital marketing campaigns (social network platforms, email campaigns, paid ads)
• Print marketing campaigns (magazine spreads, newspaper ads, direct mail, brochures, banners)

Benefits of trade marketing

Without trade marketing, a business might not be able to thrive and likely won’t get the attention of its intended consumer base. Other benefits of trade marketing are listed below.

• It puts a company’s products in the hands of consumers.
• Supply is almost guaranteed to meet demand.
• It expands brand awareness of the product and business, often leading suppliers or distributors to prefer that product over others. Growth of brand awareness leads to growth of revenue and customer base.
• Businesses create strong relationships with their suppliers and distributors.
• Because it doesn’t require a direct relationship with the consumers, it reduces any element of guesswork in a business’ marketing.
• The more a business invests in effective trade marketing, the more they stand out on the shelves.

Challenges of trade marketing

Though the benefits outweigh the disadvantages, trade marketing still has its challenges. Many of these are caused by a general misunderstanding of the term and its importance.

• Many businesses lack relevant, valuable data and research.
• Most companies don’t have a dedicated trade marketing manager or specialist. This means the responsibility goes to another marketer, even though they already have their own responsibilities. 
• Negative PR or consumer opinion of a product or company can seriously impact the effectiveness of trade marketing campaigns.
• Many consumers prefer online shopping to in-person shopping. Trade marketing, as it’s focused on physical locations, can’t really impact this element of consumerism.
• There aren’t many workers who specialize in trade marketing in comparison to other kinds of marketing, so finding an expert can be difficult.
• It can be nearly impossible to predict disruptions to the industry and economy, like natural disasters or global pandemics, that fundamentally shift consumer behaviors in the short and long term.

Steps to create an effective trade marketing strategy

Trade marketing involves several of the same steps as traditional marketing: getting to know the ideal customer, creating a campaign around that customer’s needs or pain points, running those campaigns, and reporting on post-campaign results. 

1. Perform detailed market research. The company determines the target audience and learns as much as possible about it. This helps narrow down the specific needs and benefits of the audience and what the product can supply to them.
2. Use that research to create the product’s unique selling proposition (USP). The most successful trade marketing targets consumers’ specific pain points, needs, and desires. The more accurate the USP is, the more effective the campaigns are.
3. Create the brand. Strong branding is crucial to trade marketing success and building brand equity. The majority of modern consumers consciously choose to purchase products that align with their values and make them feel good about their purchase. It’s also important to be transparent, credible, and unique.
4. Make a list of pricing details and expected availability/capacity. Overselling or underselling to supply chain partners doesn’t work. Businesses must set expectations up front that reflect the quality, positioning, and benefits of the product.
5. Create and prepare a pitch for the product. Retailers and other supply chain partners require a detailed pitch in order to understand the value of aligning with the business or product. Companies need to convince them that the product should be sold on shelves over other products.
6. Create a financial baseline and model for the product so the effectiveness of different trade marketing strategies can be tracked. Doing so makes it easier to know which campaigns have helped market saturation and which have hindered it.
7. Analyze post-event or post-campaign data and refine strategy. Trade marketing campaigns can’t rely on doing the same thing every time. Management has to learn from previous campaigns and iterate new ones based on their findings and the current market.
8. Implement a trade promotion management software program. This makes it easier to automate and scale many steps of the trade marketing process, including reporting for ROI. As the business scales and trade marketing campaigns continue to be a success, there will be a need to grow this aspect of the business and run multiple campaigns at once.