1
Promotional Strategy: Group 8ABHISHEK (PGP30122) | BHANU (PGP30306) | NIKHIL (PGP30323) |NISHANT (PGP30155)
THE COSTLY BARGAIN OF TRADE PROMOTION
May 2, 2023
SHIFT IN POWERManufacturer to Trader
3
Rise of trade promotions
4
Problems of trade promotions:
5
WHY?
6
Secure Trial for new product
Preserve self space against competitors
7
FORWARD BUYING
8
PROBLEMS IN FORWARD BUYING
PILING UP OF INVENTORY
STORAGE COSTS
INTEREST EXPENSES
INSUARANCE COSTS
TRANSPORTATION COST
9
10
11
NO-TRADE-DEAL DISTRIBUTOR INVENTORY
SAVINGS
COST OF BUYING
COST OF STOCKING
COST OF DOUBLE HANDLING
12
FRACTION OF FORWARD BUYING OF TOTAL SALES
INTERVAL BETWEEN PROMOTIONS
NUMBER OF SKUs
RISE IN UNCERTAINITY
COST TO MANUFACTURERS
13
COST TO THE SYSTEM
A PART OF THE COST OF TRADE PROMOTION WHICH CAN BE QUANTIFIED
A PART OF THE COST OF TRADE PROMOTION WHICH CANNOT BE QUANTIFIED
Transportation & Handling cost Selling, General & Administrative expenses
14
SOME LIKE IT ! SOME DONT !
15
SOME LIKE IT ! SOME DONT !
16
Living with PromotionsTrade Promotions
( Forward Buying, Coupons, Contests)
High Cost
Manufacturer Retailer
How to Tackle?
EDLPP
17
What is EDLPP?
Followed By Walmart Inc.
Result in Low Fixed Cost(Less advertising, less labour, simple inventory management)
Involves low cost price strategyLess fluctuation in demand
Is EDLPP the solution to all the woes?Definitely NOT BUT
Right Direction
18
THANK YOU
Top Related