In the current distribution process, retailers and manufacturers have to work together. This relationship has often been conflictive, but now is the time for collaboration. Indeed, looking at the different fields where suppliers and retailers have to work together, we can easily understand the role of Trade Marketing. This paper highlights the central place of Trade Marketing in FMCG companies. Though it's called Trade Marketing or not, we will see that these practices are imperative for any FMCG company because of their dependency on retailers.
In theory, Trade Marketing is defined as a methodical procedure carried out jointly by suppliers and retailers, whose objective is to better serve customers' needs and expectations, increase profitability and competitive position, while taking into account each other's constraints and specificity. In practice, if FMCG companies use Trade Marketing, it's often to better control their products. Indeed, consumers do not buy the product directly from the manufacturer, but via wholesalers, distributors, and retailers. So, besides communicating with the consumer directly, the manufacturer must also ensure that all intermediates are positioning and promoting their products favorably. Between Sales and Consumer Marketing department, Trade Marketers have to be a link between these two entities, to have a higher impact on the relationship with retailers.
While the Consumer Marketing department manages the brand, and builds the communication based on the shoppers' insights, Trade Marketers develop channel strategies to reduce costs, and increase purchases. They select the channel that best suits each operation, and design commercial arguments, Point-Of-Purchase (POP) vision, and displays. Based on the Trade Marketing action plan, the Sales department negotiates with the retailers, to implement and monitor the operation, which is aimed to generate a higher purchase volume.
[...] " (Krivda, 2004) Fig 1.2 .3: RFID tag Fig 1.2 .4: RFID Gate Fig 1.2 .5: RFID Printer 12 Part The role of Trade Marketing in FMCG companies for increasing purchase decisions Increasing purchase decisions has often been implemented via advertisement by FMCG companies. However, media audiences are fragmented and people are increasingly annoyed by unsolicited advertising intrusions‖ (Pincott, 2009). So it is necessary to find other ways to promote and differentiate their brands. With the observation of Gordon Pincott that all consumers will eventually arrive at the point of purchase‖ (2009), we clearly see the opportunity for manufacturers to consider the store as a priority. [...]
[...] The objective of this thesis was to gather information from literature and from personal research, to present a current vision of the Trade Marketing and see if its practices lead to a competitive advantage for FMCG manufacturers. We noted that best-practices aren't generalized, and that collaborative work between retailers and manufacturers to develop a shopper centric vision can be improved. Major organisations like Unilever, L'Oreal or Nestlé which succeed their Trade Marketing operations should be examples to follow for many FMCG companies. [...]
[...] First, as trade marketing practices are not usual between manufacturers and retailers, there is a need to better explore these processes, especially on the field. Actually, we saw that the main theories have been identified in the 90s, but since these discoveries, very few authors have continued to deal with this topic. Moreover, although advantages are clearly highlighted on the literature, there aren't many good practical examples. That's why an exploratory research would be appropriate to better establish the trend and better understand the scope of this practice. [...]
[...] The strategy for the store These objectives will be attained by research in: Current trade marketing practices in FMCG universe Existing subject literature The fit between theoretical trade marketing framework and practical research This thesis will focus on FMCG industry, but the ideas highlighted are also applicable in other markets Part The benefits of Trade Marketing for the manufacturer-retailer relationship Over the last several years, the relationship between manufacturer and retailer has changed. Traditionally, this relationship was often considered as conflictive, with divergent objectives (fig and based only on price, quantities and referencing. [...]
[...] Available: http://www.hubmagazine.com/archives/the_hub/2007/sep_oct/the_hub20.pdf [September 2007] 43 Appendices: Literature Review Ap : Example of an organization chart with a Trade Marketing vision Ap : Roles of the 3 interfaces 44 Ap : Bain & Company Top Management interviews Bain & Company assessed the current status of negotiations between manufacturer and retailer in Italia. Here are the top management companies interviewed Ap : Corporate objectives of the collaboration (Furey, 2009) 48 Ap : Eight Factors of Shopper Satisfaction (Wittemen, 2007) 49 Appendices: Research Data Analysis Ap.a: Transcription of the interview FG: What are your past experiences that led you to create your own business? [...]
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