Trade Marketing – What do we mean by Strategic Trade Marketing?

It is a question that comes up frequently. When I talk to General Managers, CEOs, and sales leaders:  “All is good, but my trade marketing team is a little tactical – what should I do about it?” Sometimes they substitute shopper marketing team, or category development team for trade marketing, but the message is still broadly the same. The trade marketing team are bogged down doing tactics (which for most means promotions) and are not being ‘strategic’ enough. So what practical advice can I give to a manager who wants their trade marketing team to be more strategic? The first step is to define what you actually mean by strategic trade marketing!

Define what you mean by “Strategic Trade Marketing”

If we want to achieve something, it’s probably a good idea to make sure we are clear by what we mean. Strategy is a word which gets thrown around a lot (a bit like insight), and most people nod sagely when they hear it. Yet strategy is a strange amorphous word, which can be attached to pretty much anything to make it sound a bit clever. That’s all very well in the world of soundbites, but if we’re looking to change the role of a team, we’d better be a bit clearer by what we mean.

And there isn’t a single answer as to what ‘strategic’ means. Dictionary definitions are well-meaning but lack context. One helpfully suggests that a marketing strategy is ‘a plan’ (no – that would be a marketing plan!). But there are a few common themes which seem to contribute to making something ‘strategic’ in the marketing sense.

Strategic trade marketing must take a longer term view

Firstly, the view is long term. I know, long term means different things to different people, but in the context of trade marketing, my view is that we are talking beyond a year. This quarter is tactics, this year is planning, beyond that is strategy. So strategic trade marketing efforts should have an impact that would go beyond a year. Note that doesn’t mean that strategy can’t impact in the short term too, but if all your team is doing is thinking about what happens next week, there is a good chance that they are not being strategic.

Strategic trade marketing must create significant change

The second common element to most definitions is that strategy, or being strategic, makes a fundamental shift in the operations of the business. What might that mean in the context of trade marketing? What it certainly doesn’t mean is maintaining the status quo and doing the same activities with the same retailers are were done last year. Strategic trade marketing would create fundamental shifts in some or all of the following areas:

• Channel focus – A strategic trade marketing team would look more carefully at which channels were fundamental for long term growth of the company’s brands, and look to focus resources there.
• In-store activities – A strategic trade marketing team would thoroughly review and shift the emphasis of the in-store marketing mix away from activities which serve the short term goals of the company and/or the retailer, towards activities which serve the long term goals of the company (and the retailer).
• Retail focus – Most consumer goods companies invest in the same retailers – typically their largest customers. This serves the short term goals of the company, be preserving and protecting the largest sources of short term business. But in this world of changing shopper behavior and retail disruption, this approach to retail investment is likely not to work in the longer term. Strategic trade marketing teams should consider with the longer term trade investment direction, and grapple with the challenges of balancing investing for future growth as well as protecting business today.

Strategic trade marketing should create competitive advantage

The final element in many definitions of strategic marketing is the concept of competitive advantage. That is all very well, but what does it mean in the context of trade marketing?

Competitive advantage for trade marketing acts on two levels. Firstly, how to achieve competitive advantage, in the marketplace, with shoppers (how can we beat our competitors to the sale, if you will). And secondly, how can we create competitive advantage with priority retailers, such that we gain support from them ahead of our competitors?

The key to both of these lie in understand shoppers, and ensuring that the activities of your trade marketing team (and indeed the sales team) are shopper-led. This doesn’t, I repeat doesn’t, necessarily mean that this requires a huge amount of shopper data and insight (though that can help enormously!) but it does mean that the team, and increasingly the business, must think shopper.

It is probably obvious how this helps deliver competitive advantage ‘at the shelf’ (be it a physical or digital shelf), but it is also the key to competitive advantage in the buyer’s office. Genuine shopper-led activities which help retailers win with shoppers is the best ammunition to curry favor with retailers.

A definition of strategic trade marketing

So where does that leave us? What is a meaningful definition for ‘strategic trade marketing’. Well – here is my best effort – let me know what you think.

Strategic Trade Marketing is a shopper-led approach to channels and retail which delivers fundamental shifts in the company’s performance by creating competitive advantage with shoppers and retailers.

What do you think? It’s a work in progress so I’d love your input – please share in the comments below.

And if you are thinking: “That’s all very well, Mike, but how on earth do I actually make that happen?” – well that’s a fair question, and it will be covered in my next post. In the meantime, take some time on this first step and be really clear what you want to achieve. Then subscribe to this blog, so you don’t miss the next post on how to make your trade marketing team more strategic!