What is Trade Marketing

Hi FMCGers, 

Disclaimer:
I'd like to start by a small disclaimer: "the blog is intended for FMCGers and that's why some terms, functions definitions and structures can be a bit difficult for non FMCGers but I will try my best to make it easy to understand"  

BackGround:
I have been thinking of what my first post should be about specially if i wanted to target FMCGers in Saudi Arabia focusing on Trade marketing, in the process I faced the same issue I kept on facing any time I wanted to get any resource about Trade Marketing; there is no clear definition of it in the Saudi FMCG industry, every company has it unique understanding (if any). 

On the advanced FMCG markets you can find much better understanding and case studies on Trade Marketing and customer marketing but that's about it !!, even in universities (despite the booming trend toward Trade Marketing) there is no true Trade Marketing major / courses and the training institutes are focusing on the marketing front (I refer to it a out-of-store consumers communication) or the direct sales function (the distributer model in KSA). 
It is very difficult to find a good Trade Marketing/Customer courses, but again the truth is that Trade Marketing is not a guidebook kind of learning or skill, it is mainly by the market understanding (experience) and applying certain FMCG management knowledges. For example, it would be very difficult for a non-saudi-market-expert trade marketer to shine in the Saudi market if he has no knowledge about the channel/region/customers dynamics "which takes some time to understand given the huge diversity we have in the Saudi market" 

I will try to briefly share what is my understanding of it based on the different references I found and my experience in the matter.  

So what is Trade Marketing?
Trade Marketing is not sales. However, most companies in KSA have the Trade marketing Function (again if any) under the sales umbrella, there are very few exceptions though . The truth is that the word Trade in the term "Trade Marketing" is a bit misleading and that's why most FMCGers refer to it as a sales function.

In some companies the Trade marketing / customer marketing is a channel or customer based, meaning the person title will be for example " Key Account Channel Trade Marketing Manager" if this how is naming structure is than the function should be under the sales or customer development department, if the trade marketing position is brand or product based and the title is similar to "Brand ABC Trade Marketing Manager" the function should be either with the marketing function or a separate function all by it self.  

I know companies who still refers the merchandising team as the Trade marketing team :) 

Again what is Trade Marketing ?

The best definition I could find with minor changes from my side to fit the Saudi market it the following:
      "Trade Marketing is  a marketing discipline that relates to increasing demand with both the shoppers (in-store Marketing) and the supply chain partners, such as distributors, wholesalers and retailers, rather than at the consumer level."

From here we can see why there a confusion about the Trade marketing and why companies place the function differently within its structure: let's take a close look as this will help us to strengthen our understanding of the function and how can companies better structure it. we have 3 options for the function:

1. Placed with sales team (most companies): these companies' trade marketing team is/should focus on the 2nd part of the definition; the customers, with minimal (if any) focus on the shopper side (customer based not brand/product based, the success driver is linked to customer development and growth.
2. Placed with the marketing Team: (or the responsibility is part of the marketing team a.k.a brand management team ) are focusing on the shopper side and the in-market marketing aspects (brand based), the success drivers here are linked to brand strategies (shares growth, upgrading consumers, competitor blocking, etc.)
3. Placed as a separate function all by itself:  have a mix of customer based and brand/product based and their success drivers are generated from and based on the brand's strategies and Sales department strategies. 

Such different placements and responsibilities can cause a lot of confusion between the sales machine and brand teams, hence, synergizing the plans between the sales and marketing is a key responsibility for the Trade Marketing team and it's the is main pillar toward delivering on the above definition and the company vision.

I will not discuss with placement is the ideal or the best as there is no such thing; every company has it is nature and needs and the leaders of the companies should place the function accordingly, however, the difficult part is to the set the right KPI's and expectation from the functions based on it is placement. ( I will have a later blog about the right KPI's and expectation given the different placements).

I really hope you enjoyed this blog and found it interesting and informative, I'd really appreciate if you can leave a comment on any part or share an experience in the matter, also, since this my first blog I would be happy to hear what you think and how to make it better. 

In the next couple of blogs I will be writing about the trade marketing different sub-functions, the right KPI for the main function and the sub-functions, the Saudi market different dynamics and distributer management for 

Hasan Bashammakh

Follow @HasanBash

FMCGers