Trade Marketing Story – Beginning with the Basics

Marketing | 3 minutes to read

05th May, 2021

Trade marketing is one of the most critical discipline of marketing where the idea is to amplify demand in the supply chain from the point of wholesale – to a retailer or distributor, instead at the end consumer level.

Snapshot:

    • Learn the basics of trade marketing

    • Take a look at the typical journey of any product once it is given a green flag by the manufacturer

    Simply put, trade marketing is a form of B2B marketing where the products are marketed to marketeers/ companies who when convinced, go ahead and sell those products to the consumers.

    Hence, the seller in this case is generally the manufacturer while the buyer is a sales chain partner (can be a wholesaler, distributor or even a retailer).

    Why Has It Gained So Much Momentum Now? 

    Trade marketing had been in picture since years but with the advent of technology and the evolution of customer and the whole buyer-seller journey, it has become a matter of survival for companies to cut through their competition.

    Primarily, if you’re not impressing your supply chain partner to buy your product for reselling then be aware that your competition is filling up that gap. Secondly, the fight for the optimum shelf-space or consumer-addressal is getting more aggressive than ever.

    Hence, trade marketing is something, which you can neither afford to misunderstand nor to overlook if you’re serious about sustaining your business.

    Understanding the Ecosystem 

    Mastering anything begins with a thorough understanding of the foundational elements of the same. Here as well, it is imperative to have a sense of the ecosystem before we go further into the nuances of trade marketing.

    Let’s take a look at the typical journey of any product once it is given a green flag by the manufacturer:

    • The journey which starts from an OEM, traverses towards distributors. Distributors can simply be understood as the first league middlemen, bridging the gap between OEMs and end-level sellers.
    • Then comes in the sub-dealers – again, part of the middlemen herd.
    • Sub-dealers then reach out to the eventual consumer outreach endpoints, i.e. retailers or last point service providers.
    • While retailers are the point of connect for end-consumers, there’s one important linkage between the two which impacts the sale, and that linkage is that of influencers.

    For example – in case of a petrol pump, the influencers can be the mechanics, for a sanitary warehouse, the influencer can be the plumber, for a mom & pop store, the delivery guy or the store-helper will influence the purchasing decisions of consumer and similarly, for a construction warehouse, a mason or carpenter can have a defining impact on the consumer.

    Quick Read: What exactly is trade marketing? How is it different from marketing per se? Read our Ebook

    Shifting of Dynamics Over Time 

     Initially, OEMs held a decision-maker stance and thus, commanded more value in the complete business chain. Reasons varied from lesser competition to limited supply etc.

    However, with time, the axis shifted and gradually, retailers became the power-holders since they could select between so many available choices.

    With the changing dynamics, the simpler circumstances also became progressively complex. The nature of challenges changed and also their count. And even for retailers, things became challenging because of the humungous load of options which became available in the market.

    With the advent of technology, advancements in media, diversification of outreach channels etc. OEMs now need not just convince the buyer for their brand but for the product and the category as well. Retail consolidation and omnichannel trend has also made the competition tougher.

    To level this playing field, the new-age trade marketing solutions have also undergone a metamorphosis. Now, every aspect of the trade is specifically addressed by this discipline of trade marketing and all the wrinkles which used to make the process complex or ineffective, have been ironed out.

    Let’s take a look at the precise challenges for OEMs which are addressed by the new-gen trade marketing, specific to each role in the whole journey, i.e. a salesperson, a marketer and a higher management professional.

    Now that you’ve a comprehensive view of trade marketing – what is it & how it is different from all other subsets of marketing, why it is critical than ever for businesses to take charge of their trade marketing activities and what all exact challenges does it address in the whole supply chain, let’s learn about what goes behind the scenes when you flag off your trade marketing strategy in our 2nd blog of this series. There, we’ll also talk about how to spot the right partner for your trade marketing needs, because in the end, it’s the right fit which makes all the difference.

    Visit our trade marketing service page for more details.

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