Good question. Especially since the use of trade promotions by manufacturers of consumer packaged goods continues to soar. As largest expense companies face (second only to the cost of goods and accounting for approximately 70% of a manufacturer's marketing budget), manufacturers rely on trade promotions to counter the popularity of lower-priced store brands, to pass along a discount to a price-sensitive segment of shoppers (e.g., through a frequent-shopper program), to enhance brand exposure with target consumers, or simply to provide additional stimulus to move excess inventory or counteract competitors.
Retailers, in turn, favor trade spending because it builds store traffic, improves retail margins, and, in general, the majority of the costs (and risks) are borne by the brand manufacturer.
Retailers, in turn, favor trade spending because it builds store traffic, improves retail margins, and, in general, the majority of the costs (and risks) are borne by the brand manufacturer.
So as consumer products companies continue to spend a significant chunk of revenue on trade promotions, here at birdsong gregory, we're excited to see how innovative technologies from companies like Siperian are now helping consumer goods companies make more informed, holistic decisions when it comes to marketing spend in the trade channel.
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