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TOP-TO-TOP 1994-02-07

Trade marketing is an increasingly important discipline in consumer packaged-goods firms throughout the United States. Some of these departments have been successful, others are flailing away. Why? In our analysis of successful organizations, we've identified five critical success factors that should help answer this question.1. CLEAR VISION/SENIOR MANAGEMENT BUY-IN: There must be a clear trade marketing

February 7, 1994

3 Min Read
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Jeffrey Hill

Trade marketing is an increasingly important discipline in consumer packaged-goods firms throughout the United States. Some of these departments have been successful, others are flailing away. Why? In our analysis of successful organizations, we've identified five critical success factors that should help answer this question.

1. CLEAR VISION/SENIOR MANAGEMENT BUY-IN: There must be a clear trade marketing charter, understood by all key disciplines within the organization. I can't tell you how many trade marketing departments have been in place for one to two years, yet their charter is still a mystery to the rest of the organization. While each company is unique, the trade marketing charter is typically "to drive volume/profit by providing strategic leadership and analytical direction through effective account-based marketing."

This means that the trade marketing organization becomes the strategic conscience/analytical function that develops and tactically addresses the long-term approach to managing trade issues. Typically priority approaches include category management, trade allowance spending optimization and annual business planning for top customers.

2. DATA BASES/APPLICATION SOFTWARE: These priorities represent significant challenges! To deliver, trade marketing must have available within its organization the appropriate data bases/application software packages providing the analytical foundation to make progress.

To begin, trade marketing should carefully review what's already available within the organization. Caution! Don't be too quick to accept your existing portfolio of data/application software. Secure agreement to your priorities, determine your analytical requirement and challenge your management to make sure you have the necessary data/application capability.

3. THE RIGHT HEADS, NOT JUST THE HEADCOUNT: Typically when trade marketing is formed, there is a natural tendency to lay out organizational chart requirements, and fill the boxes with available head-count. Often, individuals selected represent sales operations, sales merchandising or other management within the organization that have made contributions throughout their career. Unfortunately, the challenges of trade marketing are unique and require unique skill sets to deliver.

The first key skill is strong strategic credentials. Typically, these players come from marketing backgrounds. The second skill set requirement is solid analytical skills. These can be sourced from a variety of disciplines but must be included in the trade marketing organization. The third core competency is experienced field sales individuals who can bring depth of sales knowledge against your key customer base.

You likely will have to build the team over an extended period of time -- don't settle for second best!

4. CLEARLY DEFINED ROLES: If roles are not defined properly, trade marketing runs the risk of conflicting with the field sales organization, and/or the marketing group -- the two disciplines that must work effectively with trade marketing to ensure its success. Field sales may see trade marketing as "the bank" that isn't allowing enough withdrawals, while marketing may view trade marketing as an overlapping resource. Proactively establish a planning session with the senior management of field sales and marketing. Come prepared with a position defining which organization participates in final decisions.

5. BUDGET CONTROL: We all know ultimate responsibility typically comes with budget control. Make sure you have clearly defined your areas of responsibility and secure your own "trade marketing budget" that's necessary to execute.

Jeffrey M. Hill is a managing director at Meridian Consulting Group, a sales/marketing consulting group focused on trade marketing, located in Westport, Conn.

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