When value- and experience-related trade promotions influence retailers’ sales: the moderating role of retail format strategy and channel structure

Purpose As manufacturers and retailers aim to increase return on marketing investments, value- vs experience-related trade promotions gain attention. These two trade promotions become complicated in the presence of different retail format strategies (generalist vs specialist) and channel structures (direct to retailer vs distributors). Building on trade promotion literature, this study aims to show the main effect of value-related and experience-related trade promotions on retailers’ sales and the moderating role of different retail strategies and channel structures. Design/methodology/approach The authors use unique panel data from 8 personal care brands with 1,920 observations to test the hypotheses. The authors investigate how consumer goods manufacturer sells products using different channels structures and retail strategies. Estimated panel regressions provide the empirical evidence and robustness analyzes provide extra confidence to the findings. Findings Results reveal higher retail sales when the manufacturer invests in value-related trade promotions rather than experience-related trade promotions. The results also demonstrate how the manufacturer successfully invests in trade promotion by adequately accounting for channel structure and retail strategy. While temporary price reduction’s positive effect on retail sales is enhanced in generalist retailers (e.g. supermarket stores), shelf display’s positive impact is enhanced in specialist retailers (drug stores). Research limitations/implications The authors used unique panel data accounting for 15 months, limiting the findings. The results supported the investment allocation decisions in each period. However, future research may evaluate the effectiveness over a longer period and thoroughly address each investment’s seasonal effects. Practical implications The authors unveil how retailers achieve higher sales with value-related trade promotions when compared to experience-related trade promotions. The authors also shed light on the way manufacturers design their relationships with generalist and specialist retailers by working in direct and indirect channels. Trade promotions yield better results when the direct channel structure couples with a retailer’s generalist strategy. Originality/value The empirical findings help manufacturers achieve success in trade promotions by developing an equitable evaluation to contrast value- and experience-related promotions accounting for generalist and specialist retail strategies and direct and indirect channels.

Integration With Marketing

Sales promotion is an integral part of sales and marketing today. They are of two types – consumer promotion and trade promotion. Consumer promotion is run to entice consumers to the retail outlets and purchase the product. It also helps in building awareness and is normally run for a short period of time. Trade promotions are run to motivate the trade and the intermediaries to sell more of the product. It is a push strategy where the intermediaries try to sell more to the consumers. The downside of sales promotion is that when run repeatedly, or for a very long period of time, the brand image of the product is harmed. Sales promotions has to be run in synchronization with the integrated marketing communications plan of the brand or the product. These are normally high-profile events with lot of consumer attention through the media. More often than not, sales promotion is supported by media exposure and other communication methods, and hence, they have to be in sync with each other. The processes of buying and selling runs parallel and hence the integrated marketing communications along with sales promotion plans must take cognizance of the stage at which the product and the market is operating. While doing all these, the marketer as well as the sales team must keep in mind that there is a lot of difference between FMCG and consumer durable sales. The depth and width of distribution are completely different. The nature of intermediaries is completely different and hence the selling process also has to be quite different. International sales management is also a different cup of tea and this expertise comes over years of experience. One thing that has gained in importance in sales management and operations is ethics. This needs to be inculcated in the DNA of the sales team – right from the top to the bottom of the hierarchy.

Aileron lighting: the sales promotion question

Subject area Marketing. Study level/applicability MBA/Postgraduate. Case overview The case describes the situation faced by a sales manager of a commoditized product in a tough and competitive market. Aileron Consumer and Lighting Group (ACLG) was among the top ten fast moving consumer goods (FMCG) companies in the country while also being among the fastest growing companies in India and had a diverse portfolio ranging from trade lighting to commercial and institutional lighting. Sunil, the sales manager, after his training found himself in the Budhwar Peth market in Pune, Western India where he was expected to find a way to increase sales of compact fluorescent lamps (CFLs). The product was undifferentiated and the competition was extremely strong with large allocations to advertising and dealer support. Sunil realized that his only hope for achieving his sales targets was to organize a sales promotion. His team and he came up with three options for sales promotions – two trade promotions and one consumer promotion. Sunil had to make the right choice of sales promotion for his market and the situation he found himself in. Expected learning outcomes This case is well-suited for courses in sales and distribution management, marketing channels, sales promotions or promotion management. It can also be used in courses dealing with marketing strategy or integrated marketing communications. This case allows the instructor to discuss sales channel and sales promotion issues faced by sales managers in an Indian context. Supplementary materials Teaching notes are available for educators only. Please contact your library to gain login details or email [email protected] to request teaching notes. Subject code CSS 8: Marketing.

Wrigley India Pvt Limited: Leveraging Trade Promotions for Competitive Advantage

The Indian confectionary market consisted of sugar and non-sugar confectionary items. The confectionary market was highly fragmented with several local players. The confectionary market had been growing at over 6% but the gum-based confectionary segment was growing faster at over 10% in last few years. The principal players in this segment were Perfetti, Wrigley, Lotte, Candico and a few local players. Wrigley acquired Joyco group from Spanish food conglomerate Agrolimen in 2004 in India. The deal further added to a long list of various brands available to Wrigley. Recently the company had been acquired by Mars. The acquired brand from Joyco, Boomer had been the undisputed leader in the bubble gum market in India since 1995. Orbit from Mars-Wrigley was also not only India's but the world's no. 1 sugar-free chewing gum. Mars-Wrigley India distributed its product both through organized retailers and traditional CFA-distributor-wholesaler-retailer route. 85% of food and beverage sales to consumers in India took place through traditional retail outlets such as Pan and Beedi shops, Kiryana merchants etc. Wrigley had an elaborate system of market coverage and distributors, salespeople and merchandisers performed an important role in the total system. Wrigley India spent heavily on marketing communication. Trade promotions played an important role in increasing the sales and market share and the company's sales force need to possess adequate skills in carrying out trade promotions and making it a success.

An Implementation Model of RFID Information Security and Privacy

The technology of Radio Frequency Identification System (RFID) was being applied to various trade promotions, and Tag is considered to be the next generation of Barcode. However, the RFID is via transmission of radio frequency manner, so hacker could obtain information through the analysis way of frequency signal. The personal privacy will be violated if used in the user's privacy information and transmission without any protective measures to protect. RFID data transmission and storage with hardware ways to achieve the security of information is the best way, but this had been in the problem of Tag costs and capacity. The study taking from the applications ways is to achieve RFID information security and privacy, and do the information securities between the low-cost Tag and the Reader. The study submitted an EPC specification and combined with XOR logical implementation model to achieve privacy by the way of discussion currently. We got the data after simulations to show that XOR computing to 8 bytes actual test, the required time is 17.29 Ticks in average, the spend time is rather short. Follow-up our simulations to the test data of DES encryption methods, an average time of 8,039.41 Ticks is required, the two time required considerable differences.