FMCG brands know that traditional marketing methods are not always suited to BtoBtoC or mass retail.
That's why a specific approach to this market was born: trade marketing. This technique enables brands to boost their results by implementing actions adapted to distribution, and by collaborating with their distribution partners.
In this article, we'll start by reviewing the basic definitions of trade marketing. We'll then look at how you can implement this winning strategy in your company. Finally, we'll look at the changes that such a development could bring to your organization.
Let Sidely guide you in a strategic reflection that promises to boost your sales performance!
Over the course of the 20th century, the way products were distributed and sold underwent a number of changes, notably with the rise of the supermarket.
Working closely with distributors has become essential. Manufacturers can no longer confine themselves to selling their products to consumers; the challenge now is to sell them effectively to retailers or central distributors.
That's where trade marketing comes in!
The literal translation of trade marketing could be "marketing du commerce", but the expression "marketing de la distribution" is closer to its actual field of application.
Trade marketing refers to all the sales and marketing initiatives that can be implemented as part of a collaborative approach between a brand and its distributor. The aim is to boost in-store sales.
There are also two variations on this concept:
The aim of trade marketing is to develop a joint strategy that aligns the brand's objectives with those of its distributors. It's vital to understand each other, and this means understanding the needs and constraints of both suppliers and distributors.
Trade marketing is closely linked to category management, which aims to maximize product performance at the point of sale.
In the final analysis, trade marketing helps to raise brand awareness and, consequently, sales. The result: shared satisfaction with your distributor, whose results increase in parallel with yours.
One of the major challenges for any brand in the mass retail sector is to keep its products on the shelves, i.e. to avoid any discontinuation or out-of-stock situations. For the latter, efficient stock and supply management is essential.
It is imperative to forecast demand accurately, so as to avoid both shortages and surpluses, synonymous with lost sales, avoidable storage costs or product loss.
Your exchanges with the distributor are essential to improving the efficiency of the replenishment process. IT tools enable you to analyze and automate this process. This relationship optimizes responsiveness to market changes.
Knowing your target audience enables you to better respond to their needs and expectations. As mentioned earlier, this knowledge enables you to build your assortment, i.e. to define a global offer, made up of products each meeting a specific need and/or targeting a particular audience.
What's more, the positioning and image of your products must be consistent with your retailers. So you need to build your assortments around your retailers to match your common target. The way you choose and present your products at the point of sale will help maximize sales.
This will help you achieve your business objectives and those of your distributor.
One of the trade marketer's missions is to sell the brand's promotional actions to the retailer. These promotions are then used to stimulate sales of your products in your distributor's outlets.
Your promotions can have several objectives:
Joint action between the brand and the retailer will encourage the implementation and performance of these promotions. In this way, trade marketing aims to improve information sharing, which is so important for analyzing your performance in supermarkets. As always, remember to negotiate cash-out.
Merchandising is a key technique in trade marketing: the layout of shelves and the use of displays and POS (point-of-sale) advertising optimize the presentation of products in-store.
The main aim of merchandising is to increase product appeal and stimulate sales. This involves the strategic presentation of products at the point of sale to attract consumers' attention and encourage them to buy.
Merchandising techniques need to be constantly adapted and updated to meet market trends and consumer expectations, which is why you need to work more proactively with your distributors.
Merchandising has many objectives:
If you'd like to learn more about merchandising, take a look at our merchandising guide!
When launching a new product, it's essential to plan all actions jointly with the distributor.
Once the commercial action has been sold to the retailer or store, trade marketing increases the impact of your launches by activating various levers:
The exchange of data between you and your distributor is essential for adjusting your strategy in the event of a problem, and thus maximizing sales of your product right from the activation phase.
Supermarkets and hypermarkets are ideal environments for digital trade marketing.
Promotions can be relayed not only in-store, but also online via the retailer's or your brand's website, to double the incentive to buy. In the same way, you can use social networks, which have become indispensable. To stay on top of your objectives, deploy a multi-channel strategy.
Apple has become a benchmark in this field: the American giant's customers are so accustomed to buying its products online that the firm now uses its physical sales outlets to answer more technical questions or reassure customers who are still hesitant.
Another example is the Carrefour website, which displays joint operations with brands right from the home page.
While the marketing mix remains the fundamental approach used in all industries, brands present in supermarkets need to adapt their tactics to the world of mass retailing. Here's how trade marketing complements the 4Ps.
Trade marketing helps solve a number of problems specific to the B2B2C (Business-to-Business-to-Consumer) business model. These are the main actions on which trade marketing focuses:
Studying your competitors helps you understand your product's position in the market. This can take the form of a competitive positioning map, or comprehensive studies of the competition in your market.
To do this, you first need to identify competitors offering products similar to yours, or those aimed at the same target audience. This will enable you to compare the different products and identify their strengths and weaknesses in relation to yours: features, quality, price, packaging, etc.
Different segmentation criteria will help you determine your target. You must assume that people belonging to the same segment will have the same needs, expectations and ways of reacting to an offer:
This will enable you to create your buyer persona, who will represent the profile of your ideal customer.
Brands often define different personas, but also different segments, not least because an assortment or range can be divided into products each targeting one or more typical buyers.
Determining your target audience enables you to identify the distribution channels they use to make their purchases.
Defining your target thus complements your sales objectives and marketing positioning, and enables you to select the distributors through which you will try to sell your products. Depending on your target market, you will not choose the same retailers. Your pricing, packaging and product strategy will all be different, depending on the retailers you target.
Geographical location can be an important element in your strategy. Depending on your product, your brand may be positioned in certain areas rather than others. This choice is based on demographic, sociological and cultural criteria. For example, IPA beers sell better in cities than in rural areas. So it's more common to find them in Bordeaux than in Saugnac-et-Muret.
On this theme, we invite you to discover the different distribution methods.
Adopting a trade marketing strategy is likely to have a considerable impact on your sales and marketing approach. That's why, particularly in large companies, it's quite common to surround yourself with talent whose missions and skills are perfectly suited to your new challenges.
It is also possible to upgrade the skills of your existing teams. If necessary, anticipate any difficulties in adapting to this change (fear of not succeeding, resistance to change, concerns about variable pay, etc.). The best advice we can give you is to involve them from the outset in the implementation of this new strategy. You can explain to them all the benefits it will bring. Plan training sessions dedicated to trade marketing.
If you prefer to recruit, here are the most commonly created positions.
The trade marketing manager is generally responsible for the strategic management of trade marketing. Depending on the size of the company, he or she is involved in drawing up promotional policies and trade marketing plans.
Trade marketing project managers need to be strategists, analytical thinkers and skilled communicators.
In his role as manager, he supervises a team with different profiles:
The trade marketing analyst is responsible for analyzing the data that will enable the trade marketing manager to implement his strategies. They are generally involved in the operational planning of marketing actions, which are based on their own data analysis.
The Trade Marketing Associate is part of the Trade Marketing team. Their role may differ from one company to another, but generally they are multi-skilled and help coordinate operations. As a trade marketing coordinator, he or she is responsible for the execution of marketing and sales activities.
As you'll have gathered from this article, it's because they could no longer find solutions in traditional marketing that brands have turned to trade marketing.
By working closely with distributors, manufacturers can find concrete solutions to the specific problems of BtoBtoC.
You now have all the keys you need to implement a trade marketing strategy tailored to your brand, your market and your distributors.
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