Trade promotions are marketing activities executed between manufacturers and retailers. Trade promotions help companies differentiate a product, increase product visibility, and increase the product purchase rate. But while there are multiple products on the market, retailers only have a finite space to display items on their shelves. It is therefore sometimes necessary to encourage retailers to stock your item instead of your competitor's item.
To this point, trade promotions include:
Trade allowances are incentives used to encourage a retailer to stock a product such as cash discounts or promotional incentives.
Dealer loaders are incentives given to a dealer to display a product, such as in-store displays, premiums, or rebates.
Trade contests are used to encourage retailers to sell products, as the retailer who sells the most wins a prize.
Point of purchase display (POP) is an end cap or center store display where retailers can show the products to customers to increase awareness.
Training programs teach employees or retailers the benefits and uses of a product.
Push money is an extra commission paid to encourage the stocking and selling of a product.
Consumer promotions are marketing activities targeted at the consumer to encourage them to buy the product. These are often used at the product launch to increase brand awareness, market acceptance, and sales. Types of consumer promotions can include:
Price deals are temporary reductions in price, such as 50% off an item.
Discounts are reductions to a basic price of goods or services.
Reward programs allow consumers to collect points, miles, or credits for purchases, which they can later redeem for rewards.