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.