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Trade Promotion Disconnect Between Manufacturers and Retailers

Dec 21, 2000, 12:01 PM
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ACNielsen U.S. today released the results of its Tenth Annual Trade Promotion Practices Study. The report shows continuing differences between consumer packaged goods manufacturers and retailers over issues of value and spending.

Asked to rate the value they receive from their trade promotion spending, nearly half of manufacturers reported an increase in trade spending in 1999. However, while most retailers (64%) acknowledged receiving measurably more trade promotion dollars than the previous year, the majority (70%) indicated that the amount is not enough. "Clearly, there are significant opportunities for manufacturers and retailers to work together more closely in order to maximize the value of trade promotions," said John Petrakis, senior vice president of marketing for ACNielsen U.S. "The fact that overall value ratings are moving up is encouraging, but there are still far too many manufacturers who are not satisfied with the impact of their trade promotion spending." One point on which manufacturers and retailers were in total agreement was that "Promotion Efficiency/Effectiveness" is the number one critical issue in their industry. Another major focus of the study was frequent shopper programs. Seventy percent of manufacturers said they participate in FSPs, while sixty-three percent of retailers report offering such a program. All of the retailer respondents who currently offer a FSP and 98% of manufacturers involved in such programs indicated that they would continue to offer or participate in FSPs in the future.

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