Alexander
Agafonov, bachelor’s degree student
Mykhailo
Lulko, senior lecturer
National University of Life and Environmental Sciences of Ukraine
Trade
Marketing
70
percent of shopping decisions are now made at the trade or what marketing
practitioners refer to as "point-of-purchase". This new trend leads
to the greater importance of merchandising and shopper promotions than consumer
directed programs.
Wikipedia
gives us such definition of trade marketing - discipline of marketing that
relates to increasing the demand at wholesaler, retailer, or distributor level
rather than at the consumer level. But I prefer the definition, which was given
by “Supermarket Retailer Magazine” in 1999, such as: “Trade marketing is how
manufacturers and retailers together can build consumer loyalty”.
Retail
is a place where consumer finally does action, the last step of AIDA engage
model (attention – interesting – desire – action), what means that even huge
amounts of money spent for advertising can be lost, if trade marketing mix is
not balanced.
Trade
marketing mix is based on classic Kotler’s mix and includes 5P:
·
Product assortment
·
Price
·
Place
·
Promotion
·
Point-of-sale
To
understand mission of trade marketing we have to analyze all steps that have
place before actually buying. Firstly, marketing specialists find some demand consumers
feel. Then they communicate this demand to the producing company looking for
decision how to satisfy the demand on the market.
If
company starts to produce the product, then marketing specialists start to
communicate new brand to consumers via different channels. But to sell company’s
products a place to sell needed, so here trade marketing department starts to
communicate with different retailers trying to find the best way to sell their
product to target group of consumers.
When
consumer comes to store, he can become company’s customer by purchasing it’s
goods. Interested by advertising consumers come to retailers finding product
they want to buy and final action depends on trade marketing activities
provided in store.
How
often can’t we find the product we saw on TV in shop? Or how often we can’t see
price for the good in bright package and with awesome advertising which we
decided to buy, but just can’t understand how much should we pay for it?
Those
and other problems appear because of wrong trade marketing activity and can be
fatal for sells. Researches show, that 8 from 10 customers won’t buy the
product, if they don’t know the price for it.
Also,
the important detail in trade marketing that consumer and customer can be
different persons, what means that to sell goods producing company’s brand
marketing department has to convince both of them, and trade marketing
specialists has to remind customer about good actually in store. The easiest
example is about the products for children. Kids can feel a need of the product
because of bright package, interesting cartoon advertising, the toy inside the
candy or something else, but parents will never buy the good, if they won’t be
sure in it’s safe and usefulness.
Another
detail lies in difference between men’s and women’s behavior. Sometimes it can
be critical important, depends on the product.
Let’s
imagine woman in clothes store. Woman likes to walk for shopping, to look, to
try, to talk about, to compare. And she likes to pay for the choice she made.
Talking about stats 86 % of women look for price tags, 25 % buy the thing they
took to the fitting room.
And
what about men? They want to leave the shop as soon as possible. They move
fast, don’t ask questions and if they do, they ask only people who knows. But
they are more addicted to buy expensive goods because of bright package and
much easier to convince. In 72 % of situations they look for the price tags and
in 65 % buy the thing they took to the fitting room.
In
fact trade marketing mission is to achieve business growth by changing
consumer’s behavior by changing consumer’s physical evidence.
The
main instruments of trade marketing are:
·
pricing (right price in right place);
·
placement (following merchandising standards);
·
actions (stimulating both customers and retailers);
·
communication in point-of-sale (POS-materials, In-Store Theatre, sampling,
overcoming the barriers of lack of information, etc.);
The
main factors of successful trade marketing activity are:
·
marketing research;
·
innovations;
·
systematic approach;
·
personnel quality.
If
the company attentively takes care about the details, which were talked above,
the result of trade marketing activity can achieve 20-40 % of sells growth.
That means that the mission of increasing profits will be achieved.