What Is Trade Marketing? Factors for Trade Marketing Success

Trade marketing is one of the most important departments in a business and can bring in as much as 70% of profit. It is not simply discounts, promotions and product distribution; behind it is a whole process of studying customer habits and needs. So in this article, Mona Media will walk you through what trade marketing is and the factors that decide whether this type of marketing succeeds.

What is trade marketing?

Trade marketing is a set of activities within the distribution channel system, closely linking the organization, category strategy and brand strategy. Its activities are based on market research, aiming to understand the shopper and the company's customers, meaning distribution partners, wholesalers and retailers. The goal is to reach targets for sales, profit and market share for both the company and its customers.

Put simply, trade marketing is the department between sales and marketing, responsible for improving the experience of shoppers and retailers to reach the desired sales and profit.

The role of trade marketing

The first role of trade marketing is to research and develop ways to optimize the marketing strategy so it fits the brand's direction and vision and the messages of its products and services.

Second, trade marketing is the core department that builds the brand and helps it advance and hold a solid position in the market.

Third, the core task of trade marketing is to maintain a positive relationship with customers, which builds a growing segment with higher potential customers and brand loyaltybrand loyalty.

Who trade marketing targets

The groups directly involved in trade marketing include:

Consumers

In trade marketing, the consumer is the person who directly uses and experiences the company's product. A consumer may or may not be the buyer, because a buyer sometimes purchases a product for the family without using it. The consumer is the final user of the product or service that was bought.

Shoppers

This is the person who makes the final decision on whether to buy the brand's product. Like the consumer, the shopper may or may not be the one who uses it.

If the shopper is also the main user, then the shopper is the one who decides to buy. This is when trade marketing works hardest to persuade customers to spend. At first the shopper may hesitate, but thanks to trade marketing activities (especially promotions and free gifts), the shopper decides to pay to get a good deal on the item.

The difference between trade marketing and brand marketing

Trade marketing and brand marketing differ in the following ways:

Different target audiences

As mentioned above, trade marketing targets shoppers and the partners in the company's distribution system, such as distributors, wholesalers and retailers. Brand marketing targets consumers.

The difference between a shopper and a consumer is that the shopper decides to buy at the point of sale but does not necessarily use the product. The consumer is the one who uses and experiences it directly.

Here is an example from Mona: for children's toys, the shoppers are the mothers but the users are their children. So the mothers are the shoppers and their children are the consumers.

Different activities

Because they target different audiences, trade marketing and brand marketing also reach customers in different ways.

Brand marketing usually focuses on advertising, TV commercials, events, PR and similar activities that shape consumers' minds. Trade marketing focuses mainly on activities at the point of sale, such as promotions, discounts, displays, product distribution and category development in store.

In other words, brand marketing builds strategies to win a place in consumers' minds, while trade marketing runs activities that push shoppers to decide at the point of sale.

Besides these two differences, trade marketing and brand marketing also differ in the following ways:

• Trade marketing focuses on influencing shopper behavior at the point of sale. Brand marketing helps the business build customer trust and satisfaction with the brand.
• Trade marketing meets customers directly at the point of sale, while brand marketing reaches customers indirectly through media.
• Brand marketing helps the business increase its number of customers, while trade marketing helps it sell more goods.
• Brand marketing has a long-term effect, while trade marketing has an immediate effect.

In short, brand marketing is what makes customers like the company's brand more, while trade marketing pushes customers to buy and to come back and buy again.

Factors that decide the success of trade marketing

When running trade marketing, the following factors decide whether a strategy succeeds or fails:

Point of purchase

The point of purchase is where customers decide which product to choose. For a point of sale to attract customers to your product rather than a competitor's, it needs these basics:

• Product placement
• Product packaging
• A suitable price
• The shopper's line of sight

A successful trade marketing strategy has to account for every factor that can affect the consumer's buying decision, and then take concrete action based on what the research shows.

Creative product display

A point of sale holds a wide variety of goods, so among all your competitors' products you need to make yours stand out.

First impressions are a big advantage when a shopper meets a product at the point of sale. So besides a good display location, you need to use display fixtures and the craft of arrangement to promote the product and brand. This catches the shopper's attention, draws them to your shelf and increases the chance of a sale.

Understanding consumer habits

Understanding consumer habits is the last factor that decides whether trade marketing succeeds. Needs, shopping preferences, convenient buying locations and similar factors are all things a trade marketing professional must study to gain an advantage right at the point of sale.

So when designing promotionsand display locations, the trade marketing team needs to research, evaluate and propose the options that best fit consumer habits.

We hope this sharing from Mona Media in this article helps readers understand what trade marketing is as well as the factors that decide whether trade marketing strategies succeed. You will also see the role of this type of marketing in and grow revenue and grow the brand to your business.