In this method of Sales Trade Promotion, the company provides various types of discounts and rebates to the members of its Distribution Network. These discounts and rebates would lower their costing and this, in turn, would increase their margins. Giving incentives to the distributors and retailers is one of the oldest and most effective methods. It directly improves the profits of the members of the Distribution Channel. Companies can give flat discounts and rebates or provide slab-wise discounts and rebates where higher sales are rewarded with higher discounts and rebates. The objective behind providing discounts and rebates is to motivate distributors and retailers to purchase more and push the companyâ€™s products more aggressively to the customers.
Sales Trade Promotion Using Contests and Awards
In this method of Sales Trade Promotion, all the distributors and retailers are not rewarded, but a few of them who perform the best are given gifts and awards, in the form of cash or kind. For example, a company may have a contest where its distributors would compete for the highest sales being made, can do this at a company level or regional level to foster competition among the companyâ€™s distributors.
Similarly, awards can be given for various aspects like highest sales, better customer service, the introduction of new customers, etc. Such awards can be given year where the companyâ€™s top management is present and the entire distribution network. This would provide a unique chance of communication and interaction between the company and the distributors and retailers. This method of sales trade promotion would keep the distribution channel interested, and they would be motivated to give their best. Further, this type of trade promotion enables the company to recognize the star performers.
Sales Trade Promotion Through Co-operation and Support
In this method of Sales Trade Promotion, the company helps its distributors and retailers by working jointly with them and providing the necessary support so that it can achieve better sales and provide better services to their customers. One of the common methods used by the company is joint advertisement wherein the company is advertising its products and services wherein it also provides the details of its distributors, etc. Such advertisements can help the distributors establishing themselves and gain recognition in the market. In another method, the company shares the advertisement cost of its distributors to motivate them to run such advertisements. Another method of sales trade promotion involves setting demonstration hubs for the companyâ€™s products at the retail outlets or designating the companyâ€™s staff at the retail outlets to help the retailers sell the companyâ€™s products. This type of support is necessary when customers want to see how the products can be used/operated and provide technical staff and demonstration hubs to serve this purpose. The companyâ€™s staff would show the customers how to use/operate the products and answer the questions in the customersâ€™ minds. This type of support would lead to better operations and customer services and ultimately to better sales.
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