Trade marketing as a function has been around for over 25 years. Gaining popularity in the 1990’s, it has grown in importance to the point that today, it is a specialist function that supports both marketing and sales. To be truly successful, though, it means having an aligned mix of B2B and B2C.
Marketing plays a crucial role in getting the word out about your product to your customers. It helps to generate interest, creates demand and drives sales too. But what if your customer isn’t the consumer? What if it’s the retailer instead? For this, we have trade marketing.
What exactly is trade marketing?
There is a lot of confusion and misunderstanding around what trade marketing is and what it isn’t. It doesn’t help then that there is no precise definition. The role it plays also varies according to the company.
Further confusion comes in when you put it next to shopper marketing. In fact, many have tried to rebrand it as this, and it’s not correct, a point made by author and business leader, Toby Desforges. “Unlike trade marketing, shopper marketing is not an organisation function. It is a clearly defined business process with specific commercial outcomes.”
Shopper marketing is marketing to shoppers with the purpose of changing behaviour to drive the consumption of a brand, he adds.
Trade marketing is the opposite, and it relates to increasing demand at wholesaler, retailer and distributor level. As Matt Press, director of Splash Copywriters puts it, trade marketing is the “art of marketing products specifically to businesses [as opposed to consumers]”.
Thus, trade marketing is about selling products through a value chain to a wholesaler, distributor or retailer, who will then sell the products on to consumers.
As for who uses this, it’s usually your manufacturers. And it’s importance shouldn’t be dismissed. When successful, it can guarantee that a manufacturer will be able to get their product on the shelf and have full support from a retailer who can also promote and advertise the product.
The function of trade marketing from a B2B perspective
As mentioned already, trade marketing is about increasing the demand at a wholesaler, retailer or distributor level. That’s if you look at it from a B2B point of view.
It is, of course, more than just that. Trade marketing is also critical to the success of manufacturers. Why? If manufacturers fail to persuade retailers, distributors and wholesalers to purchase or promote their products, they would have to rely on selling directly to consumers. That is not a practical option.
When it comes to how it can be best used within B2B, it’s tricky. That is because while the aim of trade marketing is constant, the delivery thereof will be ever-changing as general marketing methodologies evolve.
For example, how effective do you think handing out flyers would be for trade marketers when compared to a comprehensive online content marketing campaign? The short answer is there can be no comparison.
While content marketing is currently experiencing a surge in popularity, it hasn't been fully embraced by trade marketers. Considering the effectiveness of some old-school marketing tactics, content marketing is an excellent opportunity.
And then, of course, there is the constant need for manufacturers to add value. Aside from purely marketing to your supply chain partners, you need to add tangible or intangible value. That can be done through shopper research, providing planograms that seek to increase a categories overall performance, retail analytics and more.
The function of trade marketing from a B2C perspective
While trade marketing is largely about increasing demand from your supply chain partners, which is B2B in nature, it also comes with the necessity to ensure that demand from consumers themselves is also maintained.
What use would it be if you get many purchase orders from a retailer but then the retailer struggles to sell the product afterwards? Such a situation would result in once-off purchase orders rather than repeat business.
To prevent that from happening, manufacturers need to provide adequate support to ensure that their products are displayed, promoted and marketed to consumers properly. With that said, you can now see that Trade Marketing entails both B2B and B2C functions, and uniquely so.
As for exactly how this support should be shown, there isn’t really a limit and there shouldn’t be one either. It can come in any shape or form so long as it helps to sustain the demand for products at the consumer level.
An aligned mix of B2B and B2C equals successful trade marketing
If you want to see success, you can’t only rely on yourself. That goes for anything in life and business, including anything related to the retail industry. Your trade marketing efforts, for example, will mean nothing if either of your B2B or B2C is misaligned or lacking.
To ensure that that doesn’t happen, you need to communicate a few facts. That is because your supply chain partners want to know that there is demand for your products at consumer level before committing.
Firstly, you need to communicate the demand that is currently at consumer level. Secondly, you need to explain what you’re doing to both sustain and drive that demand.
If you fail to do that, then imagine this situation: a retailer gives you a large purchase order on the premise that you’re going to deliver on the products. They’re also expecting you to deliver on various B2C marketing activities. What would happen if you failed to follow through on your promise? Or worse, what would happen if what you promised doesn’t meet up with what was eventually delivered?
The result is an immediate break down in that relationship. In fact, it could be difficult to repair the relationship if what you promised is so far from what was delivered.
Trade marketing is particularly interesting because it entails both B2B and B2C marketing. If you are looking for ways to improve demand at the shopper level (B2C), data-driven planograms are one way to do this. They also add value to retailers, wholesalers and distributors.
If this is interesting for you then you might be interested in our FREE Category Management Collaboration Guide, which explains how suppliers and retailers can work together to drive category growth.