Shoppers are proving stubborn about holding onto their recession-induced shopping behaviors. This tendency is making it challenging for CPG manufacturers and retailers to increase profit margins and revenue. These marketers will be adjusting their trade promotion and pricing strategies to improve their outcomes this year.
Tag: trade promotion
Nobody has ever said it’s easy to get shelf space for your new cereal or laundry soap at the supermarket or discount store. Traditionally, companies have offered trade promotion funds to sweeten the deal. This might include coupons, volume discounts or in-store marketing materials. These companies also market their products directly to consumers through traditional and online advertising. Their efforts increase the bottom line and that of the retailer. But is all that about to change?
Measuring ROI (return on investment) for advertising and marketing expenditures has never been easy. But as budgets and sales shrink, manufacturers continue to look for ways to prove that their promotional tactics are working. Consumer Goods Technology recently analyzed which type of manufacturers have the most success with specific trade promotion strategies. Their findings might surprise you, or at least lead you to adjust your plans.
Long before boxes of cereal or cookies land on the shelves at the local grocery store, manufacturers have spent significant sums on trade promotion management. The goal of these expenditures, which approach 14% of revenues according to some surveys, is to influence retailer behavior. Specifically, trade promotions encourage retailers to take steps to increase sales of manufacturers' products.