Trade Promotion Best Practices
The concept behind a trade promotion is simple. You spend money with a retailer with the expectation of deriving a tangible benefit: increased sales, increased profits or higher market share.
The mechanics, however, are more involved. In order to ensure that you're taking the right steps to drive more sales, optimizing your promotional plans is key. With trade promotion spending accounting for 15-20% of sales revenues, it’s even more critical to get this process right.
What is currently called Trade Promotion Management is actually:
- Execution - Promotional information is entered into some type of software system.
- Tracking - Users can follow the utilization of the promotional funds over time.
- Reconciliation - Payments to retailers for promotional performance with the appropriate accounting entries.
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