Chapter 12
Promotion Through the
Marketing Channel
Objective 1:
Channel Member Support
• Why is channel member support one of the
major focal points of the manufacturer's
promotional mix?
– Most products are not sold direct to the final
consumer and thus must be supported by the
channel members in order to achieve the
channel manager’s distribution objectives
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Objectives 2:
“Push” vs. “Pull” Strategies
• Pull Strategies
– Building strong consumer demand for a product
to force members in to promoting the product
because it’s in their best interest to do so.
• Push Strategies
– Focus on mutual effort & cooperation in the
development & implementation of promotional
strategies by working directly with members in
order to foster support.
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Objective 3:
Promotional Strategies
1*
Pull Strategy
Push Strategy
Manufacturer
Manufacturer
2
3
Channel members
Final users
(consumer or industrial)
*Numbers indicate sequence
of flows
† Sequence of flows is
simultaneous
†
Channel members
Final users
(consumer or industrial)
Promotion flow
Negotiation flow
Product flow
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Objective 4:
Promotional Through
Channel Members
• Favorable reception of one’s promotional
strategy is enhanced when…
1. Promotional strategies used support members’
needs rather than simply focus on selling
2. Members are included during the
development & implementation of
promotional campaigns
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Objective 5:
“Push” Promotion
Research Findings - #1
• Ad-hoc, quick-fix, and frequently offered
push promotions do not foster high levels of
channel member support on a consistent
basis.
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“Push” Promotion
Research Findings - #2
• Push promotions should be viewed as part
of strategic channel management rather than
as a mere tactical action to elicit quicker
channel member response to sell more
product.
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“Push” Promotion
Research Findings - #3
• Given the wide range of factors that can
affect channel members’ responses to
promotions, manufacturers should study
channel members’ needs carefully before
launching major push promotions.
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“Push” Promotion
Research Findings - #4
• Post-promotion (i.e., follow-up) research to
evaluate channel member response to a
push promotion is needed if manufacturers
expect to make steady progress in
improving the effectiveness of future push
promotions.
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“Push” Promotion
Research Findings - #5
• Despite the manufacturer’s best efforts,
large and powerful channel members will
inevitably come into conflict with the
manufacturer over promotional issues
because their interests and goals will at
times diverge.
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Objective 6:
1.
2.
3.
4.
5.
6.
7.
Basic “Push” Promotion
Strategies
Cooperative Advertising
Promotional Allowances (i.e., “Monies”)
Slotting Fees
Displays & Selling Aids
In-store Promotions
Contests & Incentives
Special Promotional Deals &
Merchandising Campaigns
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Cooperative Advertising
• Typical Strategy:
– Sharing in the cost on a 50/50 basis up to some
percentage of the retailer’s purchases
• Administration:
– Administration is necessary to avoid abuses &
to help secure cooperation from members
– Must be sensitive to channel members’ primary
concern about this strategy
• Which is?
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Promotional Allowances
or “Monies”
• Typical Strategy:
– Offering members a direct cash payment or a
certain percentage of the purchases on
particular products
• Administration:
– Should conduct research to determine whether
it is getting its money’s worth in terms of
retailer cooperation and follow-through
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Slotting Fees
• Typical Strategy:
– Payments made to persuade the member,
especially retailers, to stock, display, and
support new products
• Administration:
– Joint sponsorship of research between retailers
and manufacturers on effects of slotting fees on
various topics could help alleviate conflict.
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Displays & Selling Aids
• Typical Strategy:
– Include point-of-purchase (POP) displays,
dealer identification signs, promotional kits,
special in-store signage, & mailing pieces
• Administration:
– Should make the effort to see whether the
firm’s selling aids and displays are serving any
useful purpose and/or are even being used.
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In-Store Promotions
• Typical Strategy:
– Short-term events designed to create added
interest and excitement for the manufacturer’s
product(s).
• Administration:
– Planning of a successful in-store promotion
should always include considerations of the
potential benefits for the retailers involved.
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Contests & Incentives
• Typical Strategy:
– Any techniques that are used to stimulate
channel member sales efforts for one’s
products.
• Administration:
– Must consider members’ views towards this
form of promotion when determining the type
of contest or incentive to run.
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Special Promotional Deals &
Merchandising Campaigns
• Typical Strategy:
– Includes a variety of push-type promotional
deals such as discounts to members to
encourage the to order more products.
• Administration:
– Must carefully develop strategies that are based
on knowledge of the member’s needs and that
take a long-term perspective on promotion
through the channel.
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Objective 7 & 8:
“Kinder & Gentler”
Push Promotions
• Include:
– Training Programs
– Quota Specification
– Missionary Selling
– Trade Shows
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Training Programs
• Wholesalers
– Help develop their knowledge & selling
techniques for customers they call on
• Retailers
– Help develop knowledge & selling techniques
so as to instruct customers on product usage.
• Pro’s and Con’s
– Can help offset costs of training, but
– Often little time for training
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Quota Specification
• Definition:
– Sales volumes that manufacturers specify for
members to generate during a certain time period.
• Pro
– Can amount to a substantial sum & can make a
major different in the dealer’s overall profit
• Cons
– If seen as coercive, it can produce ill will and
conflict
– Members may ignore quota if line is not a major
portion of their product mix
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Missionary Selling
• Definition:
– Manufacturer’s salespeople who are specially
assigned to supplement the selling activities of the
member.
• Pro
– Useful when members lack sales capacity to handle
tasks assigned to them
• Cons
– Expensive to implement
– Some members view these salespeople as intruding
on the time of their own sales force
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Trade Shows
• Definition:
– Annual events organized by associations in
particular industries
• Pros
– Opportunity for manufacturers to
• Sell existing & new channel members substantial
quantities on new products face-to-face
• Socialize with channel members
• Create a sense of pride & belonging within the
channel by its members
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