An incentive is a reward intended to induce, incite, or spur action. Studies on consumer behavior have revealed the power of incentives in driving product/service adoption.  All marketing promotion strategies have one goal: “Drive Consumer Demand’’.  Some marketing professionals see trade promotion vs. consumer promotion as “either-or”, forgetting that trade partners are conduits for moving products from suppliers to consumers.

In pursuit of the objectives of driving consumer demand, forward-thinking companies take steps to incentivize the channel partners to drive consumer demand of specific products and create a platform to gain visibility across the supply chain. In a nutshell, the most effective promotions address both trade and consumer priorities.

Trade Promotion Strategies (TPS)

The overarching objective of TPS is to push products out of the warehouses to retail points where consumers shop. They indirectly pull shoppers into retail stores or pull in-store shoppers to promotional display units with short-term incentives to buy now. Different TPS address different trade promotion objectives; though most TPS are price related.

For instance, Push Money, also referred to as a trade allowance, essentially pays trade partners to promote certain products. This money might include incentives as bonuses for writing more retail orders, extra payments for building in-store displays or additional money for advertising.

Example, customers are greeted with different brand when they walk into typical cosmetic stores, as such most brands give their trade partners either airtime, discounts or equipment that aid the business to push a particular product and lay more emphasis on its benefits to consumers to influence their purchase decision.