Explain The Tools of Trade Promotion


Trade Promotion

Trade Promotion Tools:

Manufacturers use a number of trade promotion tools. A higher proportion of promotion budget is devoted to trade promotion tools (49.9%) than to consumer promotion (27.9%) with media advertising capturing the remaining (25.2%)



  • Dealer stock display contests:

It is a type of point-of-purchase advertising which uses the show windows of the dealers for providing exposure to the sponsor’s products. Dealers participating enthusiastically & creatively are awarded.


  • Dealer sales contests:

Where participating dealers are invited to compete in terms of the sales performance.


  • Sales Promotion Letters:

Many large companies use the medium of letters for sales promotion. Sometimes these letters are used to give information about the company’s products or sometimes they are reminders to buy a particular brand.


  • Discounts:

Other than normal trade & cash discounts.


  • Catalogues:

The catalogues carry essential information on the products by the company.


  • Trade Allowances:

These are temporary price reductions/ reimbursement of expenses incurred by dealers in full or in part, its varied types are as under.


  • Trade or buying allowance:

Offer of price reduction on purchase of specified quantity of a product.


  • Buy-back allowance:

A secondary incentive which offered certain seem of money to trade for each additional unit bought over & above the deal.


  • Count & recount allowance:

When a specific amount of money is offered after ascertaining the number of units sold during a specific period.


  • Merchandise (display) allowance:

An allowance to trade for providing desired sales promotion & product displays.


  • Co-operative advertising & promotion allowance:

Wherein a manufacture shares at an agreed rate the advertising & promotional cost incurred by the dealer in the promotion of manufacture’s product.


  • Trade fairs & Exhibitions:

It is one of the oldest practices in sales promotion. ‘Seeing is believes’ is a concept behind large scale exhibitions. Trade fair is mostly trendy & effective sales promotion tool in case of high cost industrial products.


  • Dealer Gifts:

Offer of useful articles and attractive gifts to dealers for his personal, family or office use.


  • Premium or push Money:

When an additional compensation is offered to trade or sales force for pushing auditioning a specific product or product line.


  • Coupons:

Coupons are certificates that offer price reductions to consumers. Coupons serve as an inducement to the channel for maintaining the stock of the items.


  • Merchandise deals:

Wherein additional quantity of the same or the same manufactures another product is offered to trade. May be offer jointly by non-competing manufactures.


  • Point-of- purchase:

Those special display, racks, banners, exhibits that are placed in the retail store to support the sale of product.


  • Demonstrations:

When the companies come up with a new product they resort to product demonstration for sales promotion. There are various types of demonstrations. They are as under:

  1. Demonstration at retail stores.
  2. Door-to-Door Demonstration.
  3. School Demonstration.
  4. Demonstration to key people.


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