Date of Award

1992

Document Type

Thesis

Degree Name

Master of Science

Department

Business

First Advisor

Michael Castro

Second Advisor

Carole Knight

Third Advisor

Carolyn Scott

Abstract

This study, The Importance of Trade Promotions in the Marketing Mix: Effectively Managing Retail Promotional Allowances and Rebates, explores the critical role trade promotions play in contemporary marketing strategies, particularly within consumer packaged goods industries. Authored by Barbara van Fleet, the research delves into the historical evolution, strategic objectives, and challenges associated with trade promotions such as retail allowances and rebates.

The paper begins by contextualizing the emergence of promotions within the marketing mix, examining how early 20th-century manufacturers engaged retailers through incentives and in-store marketing to influence consumer purchasing. As the marketing mix evolved, trade promotions became vital for gaining shelf space, influencing retailer behavior, and ultimately driving short-term sales.

Van Fleet reviews extensive literature and expert insights, highlighting the mechanics and strategic purposes of trade promotions. These include increasing product distribution, managing inventory levels, combating competition, and responding to consumer price sensitivity. The document critically assesses the balance between trade and consumer promotions and contrasts their effects with traditional advertising.

Furthermore, the study analyzes problems inherent in trade promotion management, including rising costs, diminishing brand loyalty, ineffective execution, and retailer misuse. It discusses approaches to improve promotional efficiency, including stricter budget controls, enhanced performance metrics, account-specific strategies, and the use of analytical tools like SPAR (Sales Promotion Analysis Research).

The thesis emphasizes the growing need for integrated promotional planning and retailer cooperation, especially in light of evolving retail environments and consumer behaviors. Concluding with recommendations from leading marketing scholars, including John Quelch, the paper offers a comprehensive guide for marketers seeking to optimize trade promotion strategies in a competitive and cost-sensitive marketplace.

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