PharmaSim MANAGING YOUR RETAILERS Advanced Marketing Management Marketing 6202

Managing Your Retailers STRATEGY Push vs Pull Strategy Retailers are the focus of a Push strategy, bypassed in a Pull strategy PULL Manufacturer Retailer Consumer PUSH

Managing Your Retailers WHAT RETAILERS DO FOR YOU Distribution Shelf Space Quantity Quality Retail Price Discounts Cooperative Advertising Displays

Managing Your Retailers RETAILER DIFFERENCES SMALL Most Independent Drug Most Convenience “Mom and Pop” Grocery Smallest orders Value merchandising support MEDIUM Most Grocery Most Chain Drug Some Mass Merch Medium orders Value turnover and allowances, some merchandising support LARGE Most Mass Merch Most Wholesale Some Grocery & Drug Larger orders Focus on turnover and allowances

Managing Your Retailers MARKETING MIX Your marketing mix decisions affect retailers’ incentive to “push” your products Manufacturer PRICE PROMOTION Place Product Retailer Margins Merchandising Turnover Demand

Managing Your Retailers PRICE Suggested Retail Price – affects demand and retailer margins Volume Discount – affects retailer margins Promotional Allowance – performance includes price reduction

Managing Your Retailers TRADE PROMOTIONS Promotion Allowance Co-op Advertising Point of Purchase Promotional Spending Product Sales Co-op Ad? Promo Allowance? Point of Purchase?

Managing Your Retailers SALES FORCE Number and distribution of sales people affects retailer response Merchandisers are valued differentially by different retailers Detailers only affect retailers by stimulating demand Merchandisers Distribution Channel A Channel Sales Distribution Channel B Sales Force

Managing Your Retailers MEASURING SUCCESS Trade Rating - Product Promotion Report % Participation - Product Promotion Report Sales - Income Statement and Product Contribution Reports Income - Income Statement

Managing Your Retailers OTHER INFORMATION How are trade promotions affecting my costs? - Product Contribution Reports What are my competitors doing? - Sales Force Report; Promotion Report; Operating Statistics How are my competitors doing? - Operating Statistics; Shelf Space Reports What are the distribution trends? - Channel Share Report; Marketing Update

Managing Your Retailers SUMMARY Marketing mix decisions affect not only consumers but retailers as well: Margins Merchandising Provide retailers with incentives to “push” your product to consumers Turnover Demand