The Costly Bargain of Trade Promotion.

Autor: Buzzell, Robert D., Quelch, John A., Salmon, Walter J.
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Zdroj: Harvard Business Review; Mar/Apr90, Vol. 68 Issue 2, p141-149, 9p, 1 Chart, 2 Graphs
Abstrakt: Over the last decade, power from manufacturers to wholesalers and sellers has shifted in retailing of frequently purchased packaged goods. Much of the power over how the goods are marketed and sold today is in supermarkets, drugstore chains, warehouse clubs, and discounters like K mart and Wal-Mart. One result has been a decline in the share that advertising takes of the marketing pie, with a proportionate increase in the share given to consumer and trade promotion. With the tide of trade promotion has come a number of practices that stir corrosive resentment among manufacturers toward distributors--slotting allowances, forward buying, and diversion. These practices, costly to manufacturers as well as in some respects to retailers (and eventually to consumers, who absorb the extra expenses in product prices), place an extra burden on producers already shouldering the administrative costs of promotion programs. In examining the issues, the authors single out forward buying in the grocery trade. They offer evidence of the costs or this practice to the distribution system as a whole. Finally, they suggest a policy that is catching on, everyday low purchase price, which is designed to smooth the peaks and valleys of demand and reduce the costs in the distribution system. The calmer negotiation atmosphere is also likelier to build collaboration and develop trust among the parties. The authors also offer suggestions to manufacturers carrying on trade promotion programs. [ABSTRACT FROM AUTHOR]
Databáze: Complementary Index
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