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LOOP ON TRADE
PROMOTIONS
HOW-TO GUIDE
Closing the Loop on Trade Promotions
HOW-TO GUIDE
This report has been designed to provide practical advice for executing effective trade promotion
campaigns.
Read this report to learn how to implement effective trade promotion campaigns. Use our tools to
evaluate different trade promotion campaigns and to demonstrate a measurable ROI.
Trade promotion is a key activity for all consumer marketing plans which encourages increased
short-term sales by effectively decreasing the cost-per-item to the end consumer.
By measuring the incremental increases in sales volume relative to the costs of the trade promotion
campaign, marketers can identify which trade campaigns provide the most return on investment
and optimize their trade plan by investing in the most effective trade channels and promotions.
In-Store Displays: point-of-Purchase (POP), Floor Stickers, Feature Display, Carton Display,
Special Racks, Banners, Signs, Mechanical Product Dispensers, Demonstrations, etc.
Temporary Price Reduction (TPR): cents off, Price pack, Bonus pack, Branded pack.
Sweepstakes: participants must submit names to be entered in a draw. Can use multiple
mediums. (i.e. POP display and website)
Refunds and Rebates: the offer to return a certain amount of money to the customer.
Premiums: a tangible reward for performing a particular act. (i.e. receive a free bar of soap with
purchase of body wash)
Sampling: allowing the customer to experience the product or service by providing free
samples.
Discretionary/Account Promotions
Templates to be used by key account managers when establishing promotions at their accounts.
1. Promotion Planning and Modeling - selection of the proper channel, promotional plan, and
estimated results.
2. Presentation - present the campaign to key stakeholders to achieve buy-in or sponsorship.
3. Sales Agreement - between Manufacturer and Retailer
4. Supply Chain Planning and Execution - all aspects of the supply chain must be taken into
consideration before moving forward. Will expediting be necessary? Will inventory levels
change based on the campaign?
5. Retail Execution - carrying out the sales agreement in the market place through the entire
value chain.
6. Settlement - reimbursement from manufacturer to the retailer based on actual sales volumes
& promo costs.
The key benefits of closing the loop on trade promotion by using the preceding lifecycle frame-
work include:
1. Providing management with greater visibility into market’s price elasticity of demand for
specific products.
2. Increased internal collaboration between functional groups within an organization to promote
alignment.
3. If done properly, will result in fewer stock-outs and cost-savings from reduced inventory levels.
4. Helps foster relationships and increase collaboration between retailers and manufacturers.
5. Increase profits for both retailer and manufacturer.
6. Improved management of current promotions based on past performance and reduced
spending on ineffective trade promotion channels and campaign techniques.
7. Building brand awareness & recognition for product lines
8. Helps close the gaps on analytics and generate predictive insights for both retailers and
manufacturers.
Bottom Line
Manufacturers and retailers are becoming increasingly interdependent and trade promotion is a
key collaboration touch point. Currently there are significant gaps between manufacturers and
retailers around analytics and insight.
Closing the loop with trade promotion campaigns can significantly increase ROI by providing
insight into the key drivers of sales volumes and trade promotion costs. Be sure to meticulously
measure the incremental impacts of your trade promotion campaigns to optimize spending for
this channel.
1 Learn Best
Practices Learn Trade Promotion
Best Practices
Achieve
2 Consensus
To get started read our article
entitled: Trade Promotion
Review Best Practices.
3 Information
Gather
4 Information
5 Set Goals
6 Define Measures
Follow the
7 Framework
8 Monitor
9 Optimize
Learn Best
1 Practices Achieve Consensus among
Stakeholders
2 Achieve
Consensus Have a meeting with key
stakeholders to align campaign
objectives.
Review
3 Information Use our Trade Promotion
Evaluation Matrix to select the
best promotion for your needs.
Gather
4 Information
5 Set Goals
VIEW RESOURCE
Follow the
7 Framework
8 Monitor
9 Optimize
Learn Best
1 Practices Review Historical
Information
Achieve
2 Consensus Review past sales volumes
for the period, market
research data, costs of
3 Review
Information prior trade promos, and
customer data, to benchmark
results from previous trade
Gather promotion campaigns.
4 Information
5 Set Goals
6 Define Measures
Follow the
7 Framework
8 Monitor
9 Optimize
Learn Best
1 Practices Gather New Information
Achieve
2 Consensus If you don’t have historical
information, consider adding
a vendor solution that can
Review
3 Information be easily integrated into your
ERP system.
4 Gather
Information
5 Set Goals
6 Define Measures
Follow the
7 Framework
8 Monitor
9 Optimize
Learn Best
1 Practices Set Goals, Timeframes, &
Objectives
Achieve
2 Consensus
Your goals may be to
improve upon an existing
campaign, create a new
Review
3 Information campaign or to improve
relationships with retailers.
Gather
4 Information
5 Set Goals
6 Define Measures
Follow the
7 Framework
8 Monitor
9 Optimize
Learn Best
1 Practices Define Measures of
Success
Achieve
2 Consensus Like all objectives, you need
to determine how success will
be measured, BEFORE you
Review
3 Information
kick-off your initiative.
5 Set Goals
6 Define
Measures
8 Monitor
9 Optimize
Learn Best
1 Practices Follow the Trade
Promotion Framework
Achieve
2 Consensus
Use this preceding lifecycle to
execute your campaigns.
Review
3 Information
Gather
4 Information
5 Set Goals
6 Define Measures
7 Follow the
Framework
8 Monitor
9 Optimize
Learn Best
1 Practices Monitor, Report, and
Analyze
Achieve
2 Consensus
Monitor the campaign closely
and use our Trade Promotion
ROI Calculator determine the
Review
3 Information return on your investment.
Gather
4 Information
5 Set Goals
Trade Promotion ROI Calculator
VIEW RESOURCE
6 Define Measures
Follow the
7 Framework
8 Monitor
9 Optimize
Learn Best
1 Practices Category Optimization
Achieve
2 Consensus
Continue to test & monitor
campaigns and implement
profit maximizing tactics.
Review
3 Information
Gather
4 Information
5 Set Goals
6 Define Measures
Follow the
7 Framework
8 Monitor
9 Optimize
Our analysts identify best practices from fast-growing companies and build
Playbooks & Toolkits, Guides & Reports, Training Courses, and Project
Templates to help you optimize your processes, add structure to your depart-
ment, and get your team punching above their weight class.
Manage your work visually with our easy-to-use platform, built for small
marketing teams by design. See what your team is working on at a glance
so you can spend less time managing projects and more time knocking
stuff off your list.
Through strategic partnerships with the AMA, ANA, and AIPMM, our
1,000+ time-saving tools & resources have become the industry standard.
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