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How Can I Get Creative with my Trade Promotions Pricing?

Thu, Mar 15, 2018

Promotions are a necessary tactic these days to entice changing buyer behaviour of your product or service.

Promotional tactics are in need of a shake up!

The tactics behind trade promotions are the mechanics of how the promotion is structured - some tactics like a discount encourage the purchase of one product over another based on price alone. The discount is probably one of the most overused promotional tactics there is, and it’s an effective one.

Manufacturers and distributors need more than just an off invoice (OI) discount. Why? Well companies want to influence the following outcomes:

  • Encourage higher volume purchases
  • Encourage more of a wider brand range to be purchased
  • Encourage distribution of new products by tacking them on to better selling lines
  • Encourage conditions to the sale like delivery not pickup
  • Encourage no splitting of items out of their shipped quantity
  • Encourage a minimum order value

So how do promotional tactics influence the outcome of the promotion?

To get the results you want, you’ll need a pricing engine that has the capability and flexibility to cater for the different mathematics aligned to different promotional tactics. With the ability to include or exclude any product or customer, you then have true flexibility to design the following promotions:

  • Encourage higher volume purchases – Buy 10 get 5% discount, buy 50 get 15% discount, and so on
  • Encourage more of a wider brand range to be purchased – Buy 5 of product A, 5 of product B and 5 of product C and get a 10% discount
  • Encourage distribution of new products by tacking them on to better selling lines – Must include 5 units of product A in your order to get free delivery
  • Encourage conditions to the sale like delivery not pickup – If you get your order delivered get 1 of product A for free
  • Encourage no splitting of items out of their shipped quantity – Order quantity is 12, if you order less than 12 there will be an upcharge of $15
  • Encourage a minimum order value – must spend $1000 minimum – get $100 off

Think about the possibilities!

You should because your competitors might be. You don’t need to apply these types of promotions to every product, every customer all of the time. You can activate these promotions for every possible combination of customer and product you can think of, and any year, month week, day or hour.

All designed properly, you’ll yield a higher volume and better margin as a result of your promotions creativity. Say goodbye to boring trade promotions with Flintfox!

trade promotion tactics cheat sheet

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