Whether a retailer buys from a wholesaler, distributor or manufacturer, it’s the retailer who chooses what to sell. Therefore, marketing to the retailer is essential. Distributors are often left to do this, but it’s the manufacturers who are vulnerable; distributors can quickly switch to other products, whereas manufacturers cannot.
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It’s shocking how few manufacturers understand that changes in recent decades require them to conduct effective trade marketing.
Chain stores
From the 1970s onward, small shops and chains were bought up or closed down by bigger ones. Chains are getting bigger, and small retailers are declining steadily.
This leaves manufacturers with few choices between outlets, and they cannot put new goods on the market without retailer cooperation. There are many opportunities for producers to promote their own brands while helping the retailer at the same time – for example, by providing in-store media such as in-store media at Mood Media.
Market fragmentation
Once upon a time, manufacturers spoke directly to customers through one of the two TV channels or with ads in the newspapers everybody read. In the 1990s, TV channels and local radio stations burgeoned, the Word Wide Web appeared, and markets were globalised. It has become very difficult and expensive to reach consumers directly, so power has shifted even further toward outlets who can – especially to chain-stores, distributors and retail buying groups.
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Proactively offering the outlets marketing technologies like in-store media
kills two birds with one stone: reaching the buying public and incentivising
the outlets to promote your goods.
Category management
Retailers love grouping products into “ranges” because it gives them
opportunities to cross-sell. Ranges can be a problem for manufacturers because
they often embrace products from multiple factories – for example,
toothbrushes, toiletries, nail scissors and cosmetics. Nevertheless, taking the
lead with new promotion strategies helps get the ball back in the
manufacturer’s court.
It has never been more crucial for manufacturers to differentiate their brands
by creating a buzz that makes retailers clamour to stock them.
In addition to the usual modern marketing skills (SEO, emailing, social media),
specialist trade marketers have some key additional skills; market identification,
lead generation, relationship-building, branding, and public relations, to name
a few. Companies devoting their entire marketing budget toward end customers
are wasting money. Manufacturers should seek professional assistance to get
dynamic trade marketing strategies in place.
