After reading chapter 6 about trade promotions, I now realize that companies like Kraft, Nabisco, General Mills, and Oscar Mayer are marketing as well just like the grocery stores are marketing to attract customers. “An allowance provides the business with cash or merchandise incentives for featuring a brand, product, or service in a special way. There are also allowances for the trade creating and featuring displays of a manufacturer’s products or services” (Ogden & Ogden, 2014, p. 6.2). Most of the time I have always wondered why grocery stores will put high priced items in their ad on the front page and even have it displayed as soon as you come into the store. In order for a manufacturer to get a new product recognized, they have to promote it, which they do by offering stores incentives.
Some brands are even put on sale by the grocery which can be a buy one get one free sale and for selling so many items the manufacturer can give some free which allows the grocery store to make more revenue. That leads me to saying that the biggest advantage with trade promotions is that they allow brands to have higher sales and revenue for the manufacturer and the retailor. Consumer promotions are savings geared towards customers which can come from the manufacturer and the retailor. The manufacturer can deliver coupons in the mail which will allow customers to save 50 cents or a dollar of one of their brands. The retailor can then allow one day out the week for customers to double their coupons which will attract more customers.
References
Ogden, J. R., & Ogden, D. T. (2014). Integrated marketing communications: Advertising, public relations, and more. Retrieved from https://content.ashford.edu/books/AUOMM615.14.1/sections/sec10.5?search=integration#w125876 (Links to an external site.)
Reply to Quentins Discussion-
Being consumers, we see a number of promotions to generate sales and sometimes the influx of them seems to be overwhelming. Ogden and Ogden describes consumer promotions as those that are designed for the consumer/buyer while trade promotions are designated for retailers and wholesalers (Ogden & Ogden, 2014). Both of consumer and trade promotions have similar techniques yet different. Consumer promotions are geared towards money saving offers with use of coupons, refunds, premiums, sweepstakes, and reward/loyalty programs, among other ways to get the consumer to buy. The objectives for the consumer promotions are to drive sales with the use of the said methods, this may include giving away products to get rid of extra merchandise.
Trade promotions include exchanges between businesses….suppliers and resellers. They may include incentives for advertising their brand, contests among stores, discounts, sponsorships and other methods. The objectives for trade promotions are more than just sales but marketing and getting the retailers to carry the merchandise in the stores is key with the use of additional incentives, such as a two for one. This is all about getting the product resold and funneling through the distribution channel.
Ogden and Ogden suggested “The strategy behind trade promotions is to persuade resellers to carry new items and more inventory, buy ahead, promote the company’s products, give products more shelf space, and push products to consumers. “The biggest advantages for the trade promotions is primarily for companies to see receive lower costs for goods. Especially, for smaller businesses, they may not be able to purchase the things needed that bigger companies can easily afford. Trade promotions also allow for the companies to offer their customers lower prices, which in turn, creates repeat customers as they consumers are the ones saving money. This, then creates more customer sales that equals more profit.
Ogden, J. R., & Ogden, D. T. (2014). Integrated marketing communications: Advertising, public relations, and more [Electronic version]. Retrieved from https://content.ashford.edu/
