A guide to trade marketing and the best strategies and techniques [complete with example campaigns].
Last updated: Oct 23, 201848 Comments
I’m not sure that there’s a more misunderstood form of marketing than trade marketing. Which is weird, since trade marketing has become an incredibly important and versatile business skill.
So today, I’m going to reveal everything you’ll ever need to know about trade marketing.
I’m going to explain what trade marketing really is, why it’s important, who uses it and how.
In this guide, you'll find trade marketing examples, tools and techniques.
Plus, I’ll give you all the tips, tricks and information you need to create a bespoke trade marketing campaign for your business.
Now… my aim is for this piece to be a definitive resource on trade marketing, so it’s going to be lengthy.
[But trust me, it’ll be worth it. I’ve looked hard and nothing like this exists out there. It’ll help both experienced marketers and beginners alike.]
However, because this article is so comprehensive, I’ve broken it up into different parts.
Either click on one of the links below and jump straight to the section that interests you the most, or…
… if you prefer, go grab a hot drink, settle down and start scrolling.
It seems sensible to kick off this resource with a definition of trade marketing.
Broadly speaking, trade marketing is a form of B2B marketing.
It’s the art of marketing products specifically to businesses [as opposed to consumers].
Normally, the objective of a trade marketing campaign is to sell products to companies who can then go on to sell those items to their customers.
Manufacturers use trade marketing.
[A manufacturer is a person or company that makes goods for sale.]
The aim of trade marketing for a manufacturer is to increase demand for their product with supply chain partners.
A 'sales chain partner' is a person or business that’s involved in the movement of products in commerce [and, as such, is the collective term for distributors, wholesalers and retailers].
Basically, the whole process works like this:
For a product to be sold in a shop, the retailer first needs to purchase the item from somewhere.
Retailers will buy products either directly from a manufacturer, or via a wholesaler or distributor.
The retailer will then sell those products to the public.
Manufacturers need trade marketing methods to try and create demand for a product with retailers, wholesalers and distributors. In a perfect world, everyone in a sales chain will make money.
Okay, but what are wholesalers and distributors?
Wholesalers and distributors act as middlemen; they essentially connect manufacturers to retailers.
They buy products from manufacturers in bulk and sell them on to retailers.
What’s the difference between a wholesaler and a distributor?
The sole aim for both wholesalers and distributors is to sell products, but distributors can offer additional services.
They tend to offer more of an end-to-end service for manufacturers, by managing client relationships and orders.
Distributors will generally be much more proactive with a product. For instance, part of their role might be to seek out potential sales opportunities in a market.
… regardless of whether we’re talking about marketing that's aimed at a retailer, wholesaler or distributor, the aim is always the same:
It's to sell a product that can then be resold.
Or let me phrase this question another way:
Why must a product be marketed before it reaches the consumer?
Well, if my previous definition was any good, then the answer should be obvious. However, just in case it isn't, here's why:
Regardless of whether a retailer is buying a product from a wholesaler, a distributor or directly from a manufacturer, the retailer obviously still gets to choose which items they want to sell.
The retailer is in the position of power.
And they know it [as does the rest of the supply chain].
As such, there’s an ongoing battle to get products in front of retailers and into their stores so that it can be sold.
Trade marketing is the difference between a retailer choosing one product to sell over another [regardless of whether that retailer is sourcing that product from in the supply chain].
And whether a product gets pushed or not affects everyone in the supply chain [but mostly the manufacturer of the product, since distributors and wholesalers can clearly try their luck with something else].
If a manufacturer doesn't use trade marketing, it puts a product at huge risk.
Which is why it's strange that manufacturing companies either ignore trade marketing, or they completely misunderstand it.
You see, unfortunately, manufacturers will always face a couple of BIG challenges no matter what happens.
The first is competition.
Competition between manufacturers is rife in pretty much every niche and the rivalry between businesses can be fierce.
Retailers need to believe in a product in order to sell it, so marketing makes all the difference. And if they're going to sell your product to retails, so too do wholesalers and distributors.
The second is space.
Logistically speaking, bricks and mortar shops only have a finite number of items that they can sell.
After all, there’s a limit to the amount of shelf space in every shop, right?
The margins are fine because retailers can only pick so many products at any one time.
Trade marketing helps manufacturers make their product more appealing to retailers, wholesalers and distributers.
It helps communicate why a certain product is better than something else.
I mean, looking at it from the perspective of either a retailer, wholesaler or distributer, why should one item take precedence over another?
Why will one product make more money that another?
Retailers, wholesalers and distributors ALL need to be convinced…
… or a manufacturer is likely to go under.
A clever trade marketing strategy can be the difference between a product being a success or not.
Put simply, trade marketing can transform a manufacturing business with a dream into a profitable operation.
The issue of competition and shelf space in shops isn’t anything new, so the value of trade marketing has always been apparent to manufacturers.
However, the concept of trade marketing really became relevant and important in the 1990s.
Previously, a manufacturer held a very strong negotiating position, but during that decade, the balance of power shifted considerably.
Retailers [and consumers] now called all the shots.
Trade marketing expert Mike Anthony of Engage was kind enough to reveal some insights on the history of trade marketing.
Trade marketing has been around for a while.
Over 25 years, in fact.
The need for trade marketing became more apparent when fast moving consumer goods companies [FMCGs] became concerned about several critical business issues.
In this blog post, Mike reveals how FMCGs were worried about 3 things in particular:
- Media fragmentation
As technology advanced apace throughout the decade, the big business challenge was how to reach an increasingly dispersed audience.
Traditionally, companies were always able to communicate with a huge audience via a small number of [easily manageable] channels.
Times were changing and this was becoming more difficult.
All of a sudden, consumers became more distracted than ever before. Where manufacturers could once speak to audiences whenever they wanted, now they couldn't.
As a result, the cost of communicating to consumers increased and the captive audience that exists in a retail shop became more valuable.
- The popularity of category management
In the 1990s, businesses began to group multiple products into ranges, rather that treat them as individual items.
So, for instance, a toiletries section might include several things that aren’t always conveniently related.
We might be talking about toothpaste, toothbrushes and dental floss, but equally, we might also have to consider deodorants, toilet paper and nail scissors.
The advent of category use in a retail environment caused 2 issues.
Firstly, it completely changed a number of relationships.
Negotiations between manufacturers and supply chain partners hinged on the turnover of the entire category in question [not just the sales of individual products].
Manufacturers had to justify how their products could help a retailer grow a category, not just their brand.
Secondly, by generalizing in this way, it became more important that a product stood out.
So category management automatically increased the importance of brand marketing.
Either way, you had to market your products better than your competition; there was no other option.
- Retail consolidation
In the 70s, many corporate big wigs believed that the best growth strategy was to acquire or merge with existing stores. The 90s saw this trend grow.
Opportunities for new products became more scarce.
In addition, the reduction of retailers really cranked up the pressure for manufacturers. Gradually, massive retail chains assumed all the power and control.
It wasn’t rare for manufacturers earn 80% of their revenue from just 3 retailers.
Therefore, manufacturers had to maintain good relationships with existing clients and do everything they could to stay in their good books.
Trade marketing helped manufacturers level the playing field.
If you weren’t good at trade marketing at the start of the 90s, you sure were by the end.
And it’s clear how many of these issues are prevalent today.
Manufacturers still have to differentiate their product from a rival’s and create a buzz before anything sits on a shelf.
They still have to contend with a busy audience with diverse agendas.
They still have to cope with wholesalers and distributers that have diverse agendas.
They still have to liaise with retailers in a position of power.
And trade marketing is still the answer.
In fact, it’s never been more crucial.
There are lots of different trade marketing methods in use today.
So many, in fact, that a manufacturer might be using a trade marketing strategy without realising it. Different manufacturers have different approaches, too...
... which probably explains why there's a lot of confusion surrounding the subject.
For some manufacturers, trade marketing is purely a shopper thing.
It's about accumulating data and using the information to craft persuasive messages that will convince sales chain partners to keep buying the product in question.
For instance, suppose a company manufactured a fruit drink and this product line is really successful. Well, the sales figures can be used as marketing in itself.
If a retailer sees another retailer making loads of money out of a product, the other shop won't want to miss out, so this data can be very persuasive.
This approach might even include designing marketing collateral for retails, stuff that can be used straight away in a store [thus saving time, money and effort].
However, for other manufacturers, trade marketing might be more about building relationships at trade shows.
For them, trade marketing is less about the shopper. Perhaps some companies don't have the market data to use or haven't been around as long, so the emphasis is perhaps more on meeting key decision makers.
As you can see, the two approaches are very different. And, as you'd expect, there are loads of other strategies you can try as well.
Some are more traditional than others.
In no particular order, let’s take a look at the main strategies…
Trade shows are ideal for networking and forging good business relationships.
Plus, if a manufacturer needs retailers, wholesalers and distributors to hear about their products, they’re also the perfect environments for improving brand awareness.
Manufacturers need solid relationships with retailers, wholesalers and distributors.
Strategic promotions and offer incentives can motivate clients and boost repurchase rates.
The bottom line is: people love special treatment, no matter who they are.
Trade magazines and websites
Adverts and articles will bring more eyeballs onto your brand.
Adverts may cost money, but you have to speculate to accumulate. Meanwhile, PR will give your business authenticity, trust and relevance.
Of course, marketing only really works if there’s a strong brand behind the product.
Supply chain partners aren’t out to make a quick buck. They want products that consumers will buy over the long term…
… and that sort of customer loyalty only comes with smart branding.
The aim of trade marketing is to create a win-win situation by achieving shared objectives.
In other words, manufacturers want to sell their products, as do wholesalers, distributors and retailers.
So if everyone wants the same thing, that’s a good starting point. Relationships are crucial.
Manufacturers like to collaborate with supply chain partners in all sorts of ways.
That could mean aligning shipping and inventory management systems to generate shared savings.
Or swapping market research so that all parties can better understand consumer behaviour.
Or maybe even partnering on advertising campaigns and sharing marketing collateral.
Ongoing market research
Knowledge is the key to building a profitably partnership with a supply chain partner.
Data is hugely important.
The more manufacturers understand their market and their target audience, the better placed they’ll be.
They’ll be able to create better products and more suitable marketing.
Of course, trade marketers must move with the times.
Many trade marketing strategies can be delivering online, just like digital marketing tactics for consumers.
Trade marketers should keep in touch with their prospects via social media, email and content marketing.
Research by Vanessa Fox, who is a former PR rep for Google, thinks that the top 3 targets for trade marketers are:
- Social media marketing platforms
Now, clearly you’re going to need to make personal contact with a client every so often.
As a trade marketer, you must find the balance between the ease and effectiveness that digital marketing brings, and the sincerity and power of a phone call or meeting.
But the point is, close and frequent contact with your clients and prospects is essential…
… and to a large extent, you can achieve this by having a solid online presence and a comprehensive strategy for keeping in touch with your contacts.
There’s little doubt that the battleground for consumers is now online.
Retailers that are adopting digital marketing are seeing 2.5x-3x lifts in key performance metrics.
Supply chain partners who work closely with manufacturers are able to create a more curated customer experience.
These days, the customer experience is everything.
Therefore, this kind of partnership subsequently allows all parties to reliably grow their revenues.
It’s always helpful to see examples, right?
Trade shows [or trade fairs, exhibitions and expos, as they’re also known], regularly take place all over the world.
The great thing about showing your product off at a trade show is that you’ve got an active, engaged audience.
The biggest trade show in the world is said to be the MAGIC Las Vegas 3-day event every February. It’s a show in the apparel and clothing category.
Trade promotions operate in the same way as consumer promotions.
They’re simply offers that are designed to incentivise a purchase.
Trade magazines and websites
Great adverts work.
What makes a brand attractive?
It’s pretty subjective, so it’s a tricky question to answer.
However, if you get stuck, always look to the businesses that make the most money:
Even the big boys value relationships, because they can bring mutual benefits.
Why else do you think you’d find a MacDonald’s inside of an Asda store?
Ongoing market research
According to this article, it turns out that Apple does a lot of market research.
And they’re not alone. The biggest brands in the world have dedicated teams for market research.
Bacardi is another example of a business that believes heavily in data.
And this SlideShare presentation shows the lengths they’ll go to in order to eliminate as much guesswork as possible.
It seems that they don’t just come up with adverts like the below on a whim:
Perhaps there’s a perception out there that manufacturing is a fairly boring subject matter.
But so long you’re a little creative, you can create interest and excitement no matter what industry you’re in.
Are you a manufacturer that wants to sell more products to retailers, wholesalers and distributers?
If so, then let’s cover how to devise a trade marketing plan for your business in 7 simple steps.
Step 1: Conduct market research.
For trade marketing to work, you must fully understand your target audience.
You need to build up a buyer persona and know want your consumers want from your product.
In addition, you should investigate the market.
Who are your competitors?
What are they doing well?
What are they doing badly?
Quantify the gaps - are there any opportunities for you to expoit?
Step 2: Understand current shopper behaviour.
Where does your target audience currently shop?
What would be the best kind of retailer for your product?
How does your buyer persona browse and buy exactly?
What kind of in-store activity works with your audience?
Step 3: Develop your product further [if necessary].
Now you have a better understanding of your customers’ needs, ensure that your products meet them.
Step 4: Work on your branding.
As the saying goes, you only get one chance to make a good first impression.
A stylish brand is everything, especially in today’s world, where retailers and consumers alike have such high expectations.
Focus on establishing consistent messaging and imagery, communicating USPs effectively and having an identifiable tone of voice.
Step 5: Create a product proposition.
The next job is to come up with a product proposition that you can offer to retailers, wholesalers and distributors.
Work out your short and long term goals. Factor in any future offers and promotions.
Make sure you’re good with your numbers. Retailers are known for having razor-thin profit margins, so every penny and cent counts.
Also, it’s a good idea to do some risk analysis at this stage, so as to limit your exposure at any time.
Step 6: Define your advertising and PR agenda.
As we’ve seen, trade marketing happens both digitally and face-to-face.
Plan at least 3 months of activities out.
Work out when you’ll be doing:
- Trade shows
- Email marketing
- Social media
- Content marketing
Step 7: Execute.
Then rinse and repeat.
As far as digital trade marketing is concerned, you’re going to need:
- An efficient website
- Various social media platforms
- Email marketing software
- Landing pages for lead generation
- Branded content
For physical trade marketing tools, we’re talking about things like:
- Display boards
- Business cards
Try to be different.
Trade marketing tools need to be functional.
But they can also be quirky.
Remember that the quality of your product isn't always your most important priority. Just as you do with consumer marketing, your trade marketing campaigns need to be memorable.
There are a number of reasons why trade marketing is so valuable, but the exact benefits you’ll enjoy will depend on your situation.
Beyond the obvious [making more money] here are the common trade marketing benefits…
Benefit #1: By generating more purchases at supply chain level, trade marketing ensures that the supply of your product can always meet demand.
Benefit #2: If your marketing is good enough, retailers will promote your product over a competitor’s, giving you a long-term competitive edge.
Benefit #3: Trade marketing can establish and maintain relationships with key supply chain contacts. This’ll only be good for the future of your product.
Benefit #4: Successful businesses use trade marketing strategies, but don’t understand how to execute a plan properly. Therefore, there’s a golden opportunity right now.
Benefit #5: Trade marketing will help your business stay profitable if you don’t have a good idea of who your end user is. That’s a situation that must change, but it’s a good fix.
Benefit #6: Trade marketing reduces the element of guesswork in marketing, since it’s effective if you have no relationship with the person using your product or service.
Benefit #7: If your chances of upselling or remarketing to your target audience is small, then trade marketing is great for business growth.
Trade marketing is vital in today’s world, but it’s really misunderstood.
There’s a lack of knowledge about the strategic role it should play within a company.
Is trade marketing a specialist job?
How does it relate to consumer marketing?
Or shopper marketing?
Meanwhile, not everyone understands what a good trade marketing strategy looks like.
Businesses really struggle to come up with a clever approach to trade marketing that delivers.
By way of a quick example, a study by Nielsen claims that less than half of all trade promotions fail to increase brand or category growth.
And that’s pretty shocking, because that’s precisely what trade marketing is supposed to achieve.
But perhaps we shouldn’t be surprised.
Take a look at the result you see if you enter “trade marketing” into Wikipedia:
Wikipedia is actually asking for help coming up with a better definition!
Trade marketing exists in some format in the majority of businesses, but it’s hard to clarify exactly what’s going on.
The official role that trade marketing plays varies from company to company, but usually, one of 3 things is happening:
- Someone is being specifically employed to operate in a standalone trade marketing job.
- Someone in a more conventional marketing role is responsible for dealing with trade marketing issues.
- Someone is executing some sort of trade marketing strategy without actually knowing it.
Therefore, we’re looking at an incredibly inconsistent situation for something so vital.
And in all 3 scenarios, there are plenty of problems.
Most trade marketing experts seem to agree that profitable strategies are being ignored, underused or misapplied.
Trade marketing v marketing.
A trade marketer will clearly need many mainstream marketing skills if they are to be any good at their job.
Trade marketing is about stylish branding, communication, advertising and differentiating yourself from your rivals.
Just like consumer marketing.
However, it does require a few specialist skills.
A trade marketer will have to master how to manage:
- Product discounts [seasonal or otherwise]
- Product margins
- Cross promotions
- Consumer behaviour
However, I believe that there’s nothing that can’t be learned.
The bottom line is:
All marketing exists to sell stuff.
It doesn’t really matter to whom.
With trade marketing, the aim is to sell to people who will then sell your product to someone else.
For the most part, you can tell whether a trade marketing campaign will be successful, just like you can with a consumer-based strategy.
In no particular order, it will depend on your ability to:
- Communicate your USPs effectively.
- Understand your market well.
- Create a consistent brand message.
- Understand the needs of your target audience.
- Enhance your brand via clever copy, logos and imagery.
- Manage relationships and master PR.
- Come up with desirable promotions.
They’re familiar marketing targets, aren’t they?
Ultimately, it’s pretty straightforward.
Wholesalers, distributors and retailers all need to crave your product just as much as consumers do…
… even if the reasons why they do are different.
Trade marketing and shopper marketing.
There are a lot of similarities between trade marketing and shopper marketing too.
For instance, you’d probably use the same language to market to a retailer as you would to a shopper.
And trade marketers often find themselves working on shopper marketing tasks like:
- Coming up with in-store marketing ideas
- Consumer promotions
- Product displays
- Innovative promotional ideas
- Product visibility
- Loyalty programmes
- Sales promotion activities
- Guerrilla marketing and PR campaigns
Research shows that 70% of shopping decisions are made at the point of purchase, so it’s no wonder that these factors crop up in both areas…
… they’re that important.
It’s a logical scenario:
A manufacturer should know his or her product better than anyone.
They must be able to understand their market, too.
So, it follows that they should also be best placed to communicate and market what they’re selling.
Retailers want products to sell.
They want to provide a great customer experience. And if you can give them value, that’s only going to be a good thing.
Consumer goods companies need more effective marketing strategies now more than ever.
Your trade marketing skills can hand them exactly what they need.
So... what does the future hold for trade marketing?
It's future is hard to predict, other than the function of trade marketing will be different across the board.
For shortsighted businesses, trade marketing won’t play much of a strategic role at all.
For the others, things will be very different. Everything will hinge around trade marketing.
Anyone in a trade marketing job will play a huge part in deciding which channels and outlets represent the best opportunities.
They’ll require a deep understanding of the market they’re operating in.
They’ll have to be an expert in many marketing disciplines.
From email marketing to shopper marketing, from social media to content, they’ll take on extra responsibilities.
Being a trade marketing is a breathless, often exhausting job.
Trade marketing doesn’t have to have a strategic role, but it can and probably should do.
Hopefully you can see how vital trade marketing is in business.
As a manufacturer, you have a couple of options.
You could manufacture private label products.
The margins will be smaller for you, but private label products are always in demand. Therefore, the opportunities to scale are greater.
The trouble with private label products is that, as a manufacturer, it’s harder to adapt and move with the times.
But if you concentrate on improving your own brand and develop a more effective trade marketing strategy, that could prove to be much more lucrative over time.
Trade marketing dictates whether a manufacturer succeeds or fails.
In general, when businesses look at their marketing strategies, most of them tend to focus on their efforts at a consumer level.
However, companies that always concentrate 100% on the customer might be missing a trick.
Perhaps a greater emphasis on trade marketing could prove to be an incredibly lucrative move.
If you own, run or work for an FMCG company, you must have a trade marketing strategy in place.
It’s a necessity, not a nice-to-have.
If you want to transform your sales, it’s actually a moral obligation.
So avoid having tunnel vision.
Is trade marketing a specialist skill?
Well, yes and no.
But one thing’s abundantly clear.
If you only took one thing away from this trade marketing resource guide, it would be this:
Trade marketing activities should compliment brand marketing.
In other words, trade marketing is not a direct replacement for any other form of consumer-based marketing.
Rather, the two should always work in tandem.
It’s all marketing.
It’s all selling.
When we, as consumers, pop into a store, the process is straightforward. Our lives are simple.
Whether we’re talking about snacks, suits or shoes, we see something we like and we buy it.
We don’t give much thought to the context of how product came to arrive in that store.
The brutal truth is, more often than not, we don’t really care.
As far as we’re concerned, we’re in a shop premises – we’re buying something from the shop.
The manufacturer doesn’t even cross our minds.
But in reality, the manufacturer is of paramount importance.
Their role comes right at the beginning of the whole buying journey.
If manufacturers don’t make products, we have nothing to buy.
Food, clothes, gadgets… products have to be made in the first place for us to purchase them.
For manufacturers to thrive, for them to survive even, they need great trade marketing skills.
I hope that this trade marketing guide will prove useful.
It’s obviously completely free. It took a long time to put together and I'm going to keep it updated with topical trade marketing news and strategies.
So please remember that sharing is caring. If you could leave a quick comment or share this article on social media, it’d be much appreciated.