What next for Trade Marketing?

In it's simplest form, Trade marketing for the Consumer Goods and Electronics industries in the Philippines can be understood to be the link between marketing and sales. This concept is inward-looking and vague by global standards and does not include the shopper perspective. Yet, it is not a surprising to find different organizations have varied Trade Marketing models and are at different stages of it's evolution. I have had the opportunity to witness and engage with several of these structures. The labels range from Trade Marketing, Customer Marketing and Shopper Marketing. However, there is one common denominator that links all three, and that is flawless execution in the Trade.

I've seen the role evolve from a purely execution arm of marketing folk to a full-on Channel and Shopper-centered department dishing out three-year strategic plans and fighting internally as the voice of the customer. There are structures that report to marketing, those that stand-alone as a unit, and the most common of course, one that is tucked under the sales team.

Is there a right Trade Marketing structure? It's a question I've been asking myself ever since I set-up a Trade Marketing model for one of the companies I had been working for 8 years ago.

Well let's see... essentially, Trade Marketing deals largely with Trade Execution either through the sales teams (Customer / Business Development) or third party agency (Merchandisers). Basically, someone has to translate the brand strategy into Tactical Guidelines for Product Assortment, Pricing, Placement, Point of Purchase Materials, and Promotions. Once consolidated these are then passed-on to the front-line to be acted upon and then monitored. More importantly, there is also the matter of trade funds which needs to be allocated by channel and at a later point by customer.

In-contrast, The model I had set-up stood on five five pillars; Shopper Insight, Channel & Category Management, In-store Activation and Funds Management. To fill-in the boxes for each pillar, I was given the opportunity to hire externally, which meant I could bring-in what I deemed to be top caliber individuals. It was literally a Trade Marketing team on steroids. I had hired talent from the country's Top MNC's to support the structure and re-define Trade Marketing not only for the sales force but the entire organization.

And why not invest in Top talent?! In terms of workload, we had a mountain to summit. To paint a picture, Trade Marketing and Sales were at odds with each other; plans were cascaded ad-hoc, Marketing was dipping their hands into sales operations, funds were out of control, to make matters worse, merchandiser attendance was spotty and in the store we looked terrible on-shelf.

Back to the question, "Is there a right structure ?" Perhaps for some. But for me, what matters more is that the ideal structure is one that evolves depending on the needs of the organization. Usually every 3-5 years as this is broadly how long it takes for a company to achieve it's vision

Looking back, I can say with confidence that the structure worked and brought us closer to our TM vision. We established commercial alignment, 5P's guidelines were cascaded timely, shopper insights were generated for the category and channel strategies drawn from them, category management established and projects initiated, promotions were evaluated, merchandiser services revamped and capability upgraded, in-store execution was measured then improved, all while saving the company a ton of money and driving growth.

Now given the advent of digital marketing and how it is changing the playing field coupled with the fast pace of the industry, I have to admit the curiosity lingers in my mind. I wonder: "how will TM be impacted by all these developments?". I just finished a stint in the consumer appliance industry and let me tell you that "Trade Marketing" over there, although still linked to execution, is literally sales force management via third party.

It has almost been a decade since I set-up that ideal Trade Marketing structure and I have been told some tweaks have been done but most of the pillars still stand. While my current TM understanding may already be somewhat outdated in today's retail environment (I must be honest!), I'd like to end this blog entry with a discussion; "What are your thoughts on where Trade Marketing will go? How do you see the role evolving?"