Trade Marketing

Many consumer goods manufacturers implemented a trade marketing functional unit in their marketing and sales organization in the 1980s and 1990s. The literature and business practice use the terms customer marketing, customer planning, and sales development synonymously with trade marketing. Overall, the major interest in trade marketing has been in the 1990s. Even in literature trade marketing is not consistently defined. Thain and Bradley defines trade marketing as follows: “Trade marketing is industrial marketing - business-to-business marketing. Marketing to business is different from marketing to consumers. In essence, trade marketing is a balancing act involving three issues. First, maximising the value offered to retailers. Second, ensuring the profitability of individual accounts. Third, since the client base is much more concentrated in industrial markets, the danger of dependence is much more dramatic.” The definition by Dewsnap and Jobber (2009) focuses more on trade marketing as an integrator role. Corstjens and Corstjens (1999) see trade marketing as a separate functional unit focused on business-to-business marketing to the retailers. The different perspectives on trade marketing are also reflected in the reasons for the implementation of the functional unit and its role. The reasons to implement trade marketing are the same as for KAM. But the authors highlight two of the reasons. First, they emphasize the increasing pressure to integrate marketing and sales in response to more consolidated, centralized. Second, they underline the spiraling promotion costs and the necessity for a specialist functional unit that is responsible for trade promotion management. Thain and Bradley says that the typical role of trade marketing reflects these two major reasons. First, trade marketing is an integrative role at the marketing and sales interface. Second, trade marketing is a specialist for business-tobusiness marketing initiatives targeted at the retailer which are mainly trade promotions and communication material for the retailer like sales folders. In the second role, trade marketing helps the retailers to differentiate themselves from the competition by offering tailored promotions to them. There are unclear statements in the literature how to translate the role of trade marketing in specific activities. In summary, trade marketing’s core activities are to:

• evaluate trade promotions,
• tailor trade promotions to the retailer’s needs (incl. point of sale material),
• communicate feedback from retailers to brand management,
• steer the brand management and KAM planning process,
• prepare sales folders for KAM and the field force, and
• manage the trade promotion plan and budget.