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TRADE MARKETING

OVERVIEW

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What does Trade Marketing cover ?

•All related customer and trade marketing

activities that will bridge Trade Sales and

Marketing

•Connections in the supply chain area where the

trade or retailers are the main “customer”.

•Trade customers and its habits, retail channels

and trade development/evolution.

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Trade Marketing - 4 P’sTrade Marketing Consumer Marketing

Price Pricing strategyPricing executionTrade margins

PromotionConsumer promotionEvent marketingBranded communication

Trade tie inTrade tie inChannel/Account

Identify target consumerConsumer profileConsumer trends

PlaceShelf managementDistribution targetsChannel strategy/targets

ProductFeatures/BenefitsPackaging/ArtworkSizing

Trade implicationsShipper sizes/artworkListing fees

Cate

gory

Man

ag

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t

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What is Trade Marketing ?

• What it is not:– An advertising agency or is empowered to execute

brand advertising.

– Responsible for brand strategies or equities, rather Trade Marketing covers channel strategies and equities.

– Responsible for consumer habits/data/analysis as it relates to the brand. It can cover consumer habits/data as it relates to store shopping behaviors and the like.

– Responsible for setting retail pricing (but trade pricing).

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What is Trade Marketing ?

• Responsibilities and Accountabilities:

• All promotion to trade, channel or account - covering deals, price-offs, trade incentives, bundlings, premium-on-pack (POP) promotions, rebates, sampling etc.

• Promotion evaluation and analysis - principle to remember here is: whoever initiated the promotion should be in charge of evaluating and analyzing it; national campaigns by Trade Marketing should be evaluated by Trade Marketers, account promotions by Account Managers, consumer promotions (initiated by Marketing) by Brand Managers

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What is Trade Marketing ?

• Responsibilities and Accountabilities:

• Trade and in-store merchandising - shelf talkers, off-shelf displays (OSD), signage, shelf layouts and strategies, shelf stickers and the like.

• Deployment process of above and below the line activities to and from the Field Sales Force and Marketing.

• Trade spend monitoring, reconciliation and forecasting

• All resource allocations for Trade Sales - this covers allocations for what trade spend/sales budget will be per channel /account , per brand splits, timing, etc.

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What is Trade Marketing ?

• Responsibilities and Accountabilities:

• Represent Trade Sales (together with the Trade Sales Director) in budget reviews, planning, channel feedback and trade inputs.

• Sets the priorities in the Trade Sales cycle.• Determines distribution targets • Sets and implements floor pricing (lowest price

available) per channel or account (a.k.a. as trade pricing), and provides inputs in trading terms.

• Responsible for delivery and development of sales information (AC Nielsen distribution reports, ex-distributor data, ex-channel data) for trade sales

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What is Trade Marketing ?

• Responsibilities and Accountabilities:

• The main contact person in driving ECR, supply chain improvements in the Trade Sales group.

• Responsible for category strategies as it fits in the channels (versus brand strategies).

• Part of the team that develops new product launches, re-stages, line extensions, price increases, etc. and leads in the execution of these programs in the trade.

• Responsible for competitive activity reporting.

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POS Development

POS DEVELOPMENTTrade

MarketingField Sales

Marketing

POS objectives determined X XDevelop agency brief XBrief design agency XDesign agency presents concepts & quotes X XNegotiate talent fees XArtwork Approved X XPresent POS concepts to accounts X XEdit & resubmit to account for approval X XArtwork production XPOS logistical managment XBrief sales force XSales force executes XPOS Evaluation X X

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Consumer Promotion DevelopmentAll Channels / Accounts - Marketing Budget

Trade Marketing

Field Sales

Marketing

Promotional objectives determined I ODevelop agency brief I OBrief design agency ODesign agency presents concepts & quotes I ONegotiate talent fees OArtwork Approved I OPresent promotional concepts to accounts O O IEdit & resubmit to account for approval O O IPromotion production OPOS logistical managment OBrief sales force OSales force executes OPost Evaluation I I O

I – Influencer O – Owner

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Trade Promotion Development

Specific Channels / Accounts - Trade BudgetTrade

MarketingField Sales

Marketing

Promotional objectives determined O IDevelop agency brief O IBrief design agency O IDesign agency presents concepts & quotes O INegotiate talent fees OArtwork Approved O IPresent promotional concepts to accounts O O IEdit & resubmit to account for approval O O IPromotion production OPOS logistical managment OBrief sales force OSales force executes OPost Evaluation O I I

I – Influencer O – Owner

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Trade Spend

• Why is trade spend so important to the trade ?

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Eg of Retailer P&L

%Sales 100Less Cost of Goods 87Trading Margin 13Plus Supplier Support 7Adjusted Gross Profit 20Less Operating Costs 17Pre Tax Profit 3

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Retailer profit = trade spend

Profit 3%

OperatingCosts17%

Supplier Support

7%

Gross Margin

onSales13%

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Trade Spend Ownership

• Who should own/manage the budget ?– Whoever owns it is accountable for spend

and sales– Whoever owns it is responsible for the

relationship with the trade– Whoever owns it must have the best

understanding of the trade, its goals and means of operation

– Whoever owns it must have controls and reporting systems in place

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Trade Spend Management

Account

Buyer

Promo Mgr

Operations

Replenishment

Account

Buyer

Promo Mgr

Operations

Replenishment

Account

Buyer

Promo Mgr

Operations

Replenishment

Account Manager

How many relationships does the AM manage whennegotiating a promotion ?

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Trade Marketing Organisation

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Environment Analysis• External Analysis

– ECR adapted by FMCGs, best practices by bigger MNCs.– Customer service levels are important to improving trade relations– various enabling technologies introduced and accepted by

distributors, retailers, field sales force, advent of e-commerce– battle for shelf space is a perennial challenge– lack of creativity in in-store promotions– strong presence of regional players in the asia-pacific– competitors are aggressive in promotions, merchandising,

advertising, new brand and packaging introductions and re-launches

– Some FMCG starting to focus on catman– stock availability important to retailers and consumers, consumer

loyalty is determined by availability (for consumers). Service reliability is key.

– consumers look for more value for their money

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The Underlying Desire of Trade Marketing

• … an integration of existing back-end and front-end processes designed to delight our customers to achieve business results

• … deliver an integrated consumer message in all of Trade Sales initiatives

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And this is consistent to Sales/Marketing Objectives

• … to enhance trade marketing capabilities…..

• …to develop effective & responsive promotion…• …to develop category management team…• …to establish sales & marketing information

system..• …to develop efficient trade fund management…• …to develop channel focused merchandising

strategies…

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• The nucleus of Sales organisation• TM is the strategic support unit of Trade Sales.

• TM takes the lead in conceptualization, organization, orchestration and evaluation of all trade marketing

programs which include but are not limited to:– Trade Promotions/CATMAN/Merchandising/Sales IM

• We serve as the chief liaison unit linking Sales, Marketing, Finance, Ethical Sales, and all other

functional departments.

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MarketingSupply Chain

Finance

Distributor Sales

External Organizations / Customers

Legal

Ethical

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It is important to the future state of Trade Marketing

Present State Future State

Trade Marketers Business Managers

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Key Roles & Responsibilities• Translate brand/category strategy into actionable sales plan

– Business Development Program manual– Annual Trade Promotion Activities by channel, by brand

• Formulate total category merchandising strategies– Merchandising Guideline– - Ranging Guideline Retail Performance Standard (RPS)– Space Management

• Continuous improvement & development of key business processes– NPD execution process– POS development/premium sourcing process– Floor price guideline– - In store execution process with Agency (PC/Merchandisers)

• - Promotion Evaluation Effectiveness, deal depths, competitors

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Key Roles & Responsibilities

• Provide sales support materials– Trade letter, Trade presentation for new products/promotion theme– Product samples– Point of purchase vision and production of generic & tailor made– - -Key customer plan o gram– Premium sourcing

• Information sharing– Market share, new TVC, MKT activities , Competitors information

etc.– Interpret market research data providing directional advice to sales

team

• Maintain databases, key business information & process– ACN data, sales information data/system– - Competitors information promotion activities, pricing, ranging, new

initiatives– - In store SOM, SOV

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Key Roles & Responsibilities

• Product knowledge training to sales team, PC’s Merchandisers team.

• Work with multi-functional team within the business to share learning of trade requirement - promotion mechanic, new initiatives list-in timeline etc.

• Allocate sales budget and trade spend budget, monitor and control– By brand, by channel– Phasing by monthly and quarterly– Trade spend monitored monthly

Deliver Sales & Profit

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Annual Planning ProcessAnnual Planning Process When Deliverables

Marketing Aug-15 Brand goal and strategyDevelop Business Plan and Guideline Target audience

Brand PositioningKey CompetitionPromotion GridNPD gridTrade Promotion BudgetSales Budget

Sales Department Sep-15 Draft business development programTrade marketing develop Business

Development Program (inc. all channel) - Promotion objective & priority

- Promotion activities by channel - Merchandising & Distribution objective - Sales budget by channel, account - Trade promotion budget allocation

Trade Marketing Oct-01 Business Development programs

Get alignment on business development plan with Sales Director and Marketing team

- Promotion objective & priority

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Annual Planning ProcessAnnual Planning Process When Deliverables

Trade Marketing Oct-15 - Sales budget by channel, accountDeploy annual business plan to sales team - Trade promotion budget allocation

- Promotion activities by channel - Promotion objective & priority - Merchandising & Distribution objective

Sales Team Nov-07 Annual plan by key account/key customerDevelop and review annual key account plan with Sales Director, TM and Marketing team

- Sales target phasing by month

- Trade budget spend by month/quarter - Yearly promotion plan (with Q1 firmed)

Sales Team Annual plan by key account/key customerPresent and review account plan with customers and get their concurrence

Sales Team Nov-30 Annual plan by key accounts (with Q1 firmed)Submit agreed annual key account plan to

business team

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Quarterly Planning ProcessQuarterly Planning Process When Deliverables

Marketing and Trade Marketing Q1 - Oct 1 Quarterly promotion activitiesHaving a quarterly marketing and sales

planning meetingQ2 - Jan 1 Deployment materials preparation

Q3 - Apr 1Q4 - July 1

Trade Marketing Get alignment with National Sales Director

Trade Marketing Q1 - Oct 15Market information sharing - Market share, shopper research, new TVC, MKT activities, competitor information etc.

Trade marketing deploy marketing and promotion activities to sales team

Q2 - Jan 15 - Trade letter

Q3 - Apr 15 - Product/Premiums sample + SlideQ4 - July 15 - Trade Presentation

- POP Materials (Mock-up) – 24 sets

Sales Team Quarterly plan by key accountsDevelop and adjust quarterly account plan and align with National Sales Director

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Quarterly Planning ProcessQuarterly Planning Process When Deliverables

Sales Team Q1 - Nov 7 Quarterly plan by key accountsPresent quarterly account plan to marketing

and Trade MarketingQ2 - Feb 7

Q3 - May 7Q4 - Aug 7

Sales Team Quarterly plan by key accountsPresent and review account plan with customers and get their concurrence

Sales Team Q1 - Nov 30 Quarterly plan by key accountsSubmit agreed quarterly key account plan to

business teamQ2 - Feb 28

Q3 - May 31Q4 - Aug 31

Sales TeamExecution

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Monthly Deployment ProcessMonthly Deployment Agenda When Topics/Contents

National Sales Director 25th of the month Overall business status updated vs. GoalsOpening Speech, Business and Organization

UpdatedOrganization updated and recognition

Key direction and strategyNew News

Regional Sales Managers Monthly and YTD business updatedBusiness and Organization Updated Organization updated and recognition

Trade Marketing Market information sharing - Market share, shopper research, new TVC, MKT activities, competitor information etc.

Deploy marketing and promotion activities to sales team - 2 months out

Monthly Priority

Q & A, Getting feed back from field sales

Key Account Team Key account activities - 2 months out

Deploy key account promotion activities to field sales team and merchandising specialist

Q & A, Getting feed back from field sales

Field Sales TeamExecution

MorningSession

AfternoonSession

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Roles of each functionKey Function Key Roles

- Giving Trade Sales Team on overall business & organization update, recognition - Giving key direction & priority

Regional Sales Managers - Update the business results by key account versus Goal to sales team

- To deploy marketing and trade promotion activities in coming month and the month after (2 months out) to sales team - Getting the feed back from sales team on marketing and promotion activities, what are the requirements/helps that sales team would need to improve business results

- Provide the feed back on marketing & promotion activities, requirements/helps that they would need to trade marketing team to support it. - Deploy in-store promotion activities of each key account to Account Rep. and Merchandising Specialist in coming month and the month after (2 months out)

- Get the deployment of marketing & promotion activities from Trade Marketing for execution - Get the deployment of in-store promotion activities from Account Managers for execution

- Get the deployment of marketing & promotion activities from Trade Marketing to deploy to PC's/Merchandisers team for execution - Get the deployment of in-store promotion activities from Account Managers to deploy to PC's/Merchandisers team for execution

Account Representatives

Merchandising Specialist

Sales Director

Trade Marketing Team

Account Managers

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The structure

• Channel Specialist• Brand Specialist• Cat-Man specialist• Sales Analyst• Merchandising Specialist• Promotion Specialist

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• Brand SpecialistsBrand Specialists– To develop and implement brand promotions

customized for the different channels (Marketing, TM and Field), address varying account needs

– To provide valuable inputs in promotions development specific to a channel (consultants) and continue involvement in customer teams

– To introduce alternative promotional vehicles to deliver sales and marketing objectives

– To optimize use of Trade Promotional Fund and other resources to provide maximum return on investment

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• Brand SpecialistsBrand Specialists– TM should have command of any type of promo,

field and marketing initiated– Promo Velocity (approval authority), with TMM

as last signatory before the TSD– Promo Fund to be on quarterly basis. Priority is

on Key / Major Accounts with annualized business plans

– Introduce alternative demand generating promos for use of field sales

– Ensure swift &flawless introduction of new brands into the market

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• Brand SpecialistBrand Specialist– Provide relevant and up-to-date sales

related information about the brands• franchise reports -- consolidation of offtake,

inventory, sales trends and distribution performances

– 10% contingency fund will be utilized for tactical business building programs

– Promo Evaluation to be done during the Sales Manager Meeting

• Brand Specialist to remind the SMs of monthly update.

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• Merchandising SpecialistMerchandising Specialist– Launch an aggressive merchandising campaign

suited per channel – Create a merchandising standard per channel – Improve merchandising support for field sales,

timely execution of field sales directions.

– Develop promotion team (SPG, merchandisers)

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• Merchandising SpecialistMerchandising Specialist– Evaluate merchandising practices and other current best approaches,

come up with merchandising standards per trade channel.– Create ‘corporate/brand look’ in merchandising our products in Key

Accounts and subd major accounts, excluding Catman accounts.– Manage Display and Merchandising Budget – Evaluate OSD presence in Key Accounts, rationalize the permanent

ones– Set KRAs for merchandisers and coordinators, training contact for

follow-through– Set retail performance standards and monitor proper execution in the

trade– Supervise SPG/MD team

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• Category Management Category Management SpecialistSpecialist– To consolidate existing Catman initiatives to

deliver objectives and forge strategic business partnerships

– To develop and implement category growth programs with selected accounts

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• Category Management Category Management SpecialistSpecialist– captaincy accounts, expand to more doors

and standardize planogram– Focus on advanced Catman modules on top

of shelf management initiatives with more advanced accounts• Range, Promo and Pricing Strategy

– To provide field sales a working knowledge of Catman specific to their accounts.

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• Sales analystSales analyst– develop means of protecting and ensuring

sales data are accurate and up-to-date– be the link of trade sales to demand

planning to apply business plans into actionable steps for use of the department

– manage database of total trade sales– Work with internal IT, Distributor IT, to use

IT to provide reasonable info access

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• Sales AnalystSales Analyst– update and validate integrity of sales and

marketing data for use of field sales and sales staff

– develop more effective ways of sales reporting and evaluate relevance of all existing reports of field sales

– download all s&m numbers and align it with field sales plans

– hardware and software expert and consultant