Have you ever wondered how your favorite brand of ice cream ends up in the freezer section of your grocery store? This is the result of trade marketing: the strategies used by companies to increase visibility, demand and sales of their products by collaborating with retailers and wholesalers. That’s how Casper mattresses ended up on Costco shelves, and that’s why so many Barnes & Noble stores have a Starbucks attached.
Learn what trade marketing is, why it’s important for business growth, and how to create a trade marketing strategy that converts.
What is business marketing?
Trade marketing is a business-to-business (B2B) marketing strategy aimed at retailers, wholesalers, and other distributors, called business partners. Rather than marketing a product directly to consumers, trade marketing targets other businesses with the goal of putting products in their stores or distribution channels. The goal of a sales marketing manager is to forge lasting relationships with supply chain partners, from distributor to retailer.
Best Business Marketing Strategies
Here are some ways to implement business marketing strategies:
Trade shows
Trade shows are a great place to network with supply chain and retail executives. They provide a forum for marketers to explore new distribution opportunities while showcasing products. The best thing about trade shows is that everyone is there to network, and distributors, retailers and wholesalers are open to new partnerships.
Commercial promotions
No one can deny the allure of large quantities. Consider what promotions you could present to potential distributors and retailers to entice them to carry your product: strategies such as volume discounts, promotional pricing, or bundle deals. This gives retailers higher profit margins on your products, making them more likely to promote them.
Retail Partnerships
This is fundamental to a good business marketing strategy. Building strong, collaborative relationships with retailers and supply chain partners can be the difference between them choosing you over a competitor. A strong retail partnership means you and your distributors are committed to working toward a common goal.
This could involve collaboration on merchandising strategies, proprietary packaging, data sharing and regular communication and feedback.
A strong brand image
Brand equity (the value customers place on your brand) is an important factor that determines whether partners choose and support you over the competition.
Strong branding goes beyond a clever logo and slogan. Consider your target audience, your brand positioning, your messaging, and even customer feedback. Is your packaging attractive? Does your product communicate value? Is your brand recognizable? Does it spark an emotional connection that builds customer loyalty? These are all factors that retailers consider when making decisions.
Digital marketing
Digital marketing helps you reach and engage end consumers, retailers, distributors and wholesalers, keeping you top of mind for potential partnerships. Some B2B digital marketing strategies include:
- Creation of dedicated web pages for business marketing partners
- Co-branded online advertising to attract consumers to your partner stores
- Sharing content on social networks
Category extension
Category expansion gives you the opportunity to showcase a range of products within a particular category. For example, menstrual care and sexual well-being brand LOLA offers a range of plastic applicator tampons, cardboard applicator tampons and non-applicator tampons in its tampon product category. This allows it to market all three products when presenting tampons to distributors, which offers an advantage over a competitor who could only offer one product.
How to create a successful trade marketing strategy
- Carry out a market study
- Set clear goals
- Develop a unique value proposition
- Establish pricing and promotion details
- Prepare a pitch deck, sales sheet and price list
The following five steps can help your business marketing team develop an effective strategy.
1. Carry out market research
Treat this step as both a B2B and business-to-consumer (B2C) project.
At the B2C stage, research your end customers and identify their pain points, retail preferences, and behaviors. You want to understand your target market inside and out, including trends and opportunities. How do your target consumers spend their time? Where do they like to shop? What problems will your product solve for them? How will your product fit into their lives?
Next, identify your main competitors and analyze their strengths, weaknesses and business marketing tools and strategies. Here are some questions to ask:
- How is their brand positioned?
- Does their online presence work?
- What are their trade marketing strategies?
At the B2B stage, identify the key players in the desired distribution channels and analyze their goals, challenges and preferences. Here are some questions to ask:
- What are the target demographics of your potential business partners?
- What are their best-selling products or categories?
- Are they collaborating with brands on joint marketing initiatives?
- What are their current challenges?
This will help you find your competitive advantage and speak directly to your potential partners’ goals during the pitch.
2. Set clear goals
The next step is to clearly define the objectives of your trade marketing strategy. Align them with broader business goals. These goals could include increasing market share, improving product visibility, or strengthening relationships with key partners. Consider the SMART framework (specific, measurable, actionable, realistic and time-bound) when setting goals. Next, establish key performance indicators (KPIs) that directly correspond to your goals.
For example, if your goal is to increase your market share by 15% over the next six months, the KPIs could be:
- Number of business partners
- Revenue per distributor order
3. Develop a unique value proposition
Develop a unique value proposition (UVP) for consumers and partners and clearly articulate what sets your brand and products apart from those of your competitors.
For consumers, the UVP could focus on the product’s unique features, pricing, or quality.
For partners, highlight the benefits they will gain by collaborating with your brand. This may include higher profit margins, an increase in total basket size, or access to exclusive products.
4. Establish pricing and promotion details
The key is to set a price that is both high enough to maximize profit and low enough to attract buyers. It should also compare favorably to your competitors. When deciding on a pricing strategy, consider bulk or bulk deals, or promotional incentives like buy one, get one free and other discounts, or free samples. Other considerations include:
- The purchasing behavior and budget of your target audience
5. Prepare a pitch deck, sales sheet and price list
Create a compelling pitch deck for potential business partners. A well-designed pitch deck should capture the attention of business partners, build trust and encourage them to enter into a mutually beneficial business marketing partnership.
Your business marketing pitch deck should include:
- A presentation of your company and your history
- An overview of the industry, growth opportunities, and needs your product addresses
- Your product line and any unique features that set them apart from the competition
- Current distribution channels and the position of your potential business partner
- Quantifiable benefits your business partner will receive from working with you and how your partnership aligns with their goals
- Collaborative marketing opportunities and merchandising support
- Pricing structure and sales projections
- Positive customer reviews or other successful collaborations
Your sell sheet should be one or two visually appealing pages that provide key information about your products. It should include:
- Essential information such as features, benefits, pricing and contact details
- High quality photos and graphics
- A clear call to action (CTA)
Your price list should allow the decision maker to easily choose the products to offer by including the following elements:
- Product names and descriptions
- Pricing details and bundle discounts
- Shipping and handling charges
- Payment terms and minimum order quantities (MOQ)
Business Marketing FAQ
What is the difference between trade marketing and conventional marketing?
Trade marketing targets retailers, wholesalers and product distributors to purchase products in bulk and stock them, while conventional brand marketing tends to target end consumers.
Who uses trade marketing?
Any manufacturer or brand that creates consumer packaged goods can use trade marketing to sell their products to retailers, wholesalers, and distributors.
Is trade marketing the same as B2B?
Yes, trade marketing is a form of B2B (business-to-business) marketing because your business markets and sells products to another business.
How to start trade marketing?
To start business marketing, conduct in-depth market research to better understand your target audience and competitors. Next, identify potential business partners and strategies you want to pursue, develop a unique value proposition (UVP), create a comprehensive pitch deck, and approach potential business partners.