The food and retail sectors rely heavily on trade promotion as a means of boosting sales and expanding their market share.
Nevertheless, developing and executing effective trade promotions is difficult, as several businesses are unsatisfied with their current trade procedures and have little idea of how their money is being spent. An efficient trade promotion management system can guarantee effectiveness, value, and profitability.
Trade Promotion Management: What Is It?
Manage your trade expenditure activities in the food and retail service sectors with the help of the art and science of trade promotion management. Budget management, thorough planning, precise payments, settlement of deductions and claims, and handling of client short-pays are all part of the trade promotion process. The following are examples of prevalent trade promotion methods:
Bundles
Customers can save a significant amount of money by purchasing a bundle, especially during the holiday season. Take cosmetics, for example; customers save money by purchasing a multi-item set rather than buying each item separately. Combining a slow-moving product with a more popular one can increase sales.
Promotions and Discounts
The consumer packaged goods industry uses discounts of a set number or percentage or deals, such as “buy one, get one free,” to increase sales. Retailers are incentivized to promote products to customers when they earn a bonus, such as when producers provide free products to retailers who purchase a particular number of products.
Storefront Fixtures
The first step in making a sale is capturing the attention of the customer, and well-designed retail displays achieve exactly that. Some businesses utilize interactive displays to attract customers.
Rebates
Promotional rebates given after purchase are quite common as they appeal to both cautious and impulsive consumers. One research found that only 20–30% of consumers actually claimed their rebates, suggesting that rebates can boost demand without significantly affecting company margins.
Exclusive Pricing
Special pricing always drives up sales, as people tend to buy things when they’re cheaper. Discounts can be provided to customers either directly or via a retail alliance.
The Importance of Trade Promotion Management
The handling of trade promotions may have a significant effect on a company’s bottom line. Typically, trade promotion takes up 20% of a company’s net income and is the second greatest expense after the cost of products sold when looking at the profit and loss statement.
Losses can arise if trade promotion programs are pursued on the basis of performance estimates rather than high-quality facts. A company’s bottom line may increase by as much as 15%, thanks to well-managed trade promotion.
Current and accurate facts should be used to make trade promotion decisions. While campaign details could be available to marketing and sales managers, trade management solutions like Marketing Event Master eliminate the uncertainty. Moreover, trade promotions have a greater chance of success when founded on previous performance.
Summing Up
It’s hard to put a price tag on the value of efficient trade promotion for the food industry, both in retail and food service. So, instead of being yet another piece of software to learn, a trade promotion management solution should be seen as a pillar of support, an always-on service, and a comprehensive answer that can be used as a trampoline for expansion and success.
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