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Chapter 12
PROMOTION TRHOUGH THE MARKETING CHANNEL
Teaching Notes
This chapter examines the various forms of promotions that are available to channel
managers. Students should be familiar with these various types of promotional strategies
Chapter Objectives
One of the major tools the manufacturer uses for implementing an integrated promotional
program is selling support by channel members. A manufacturer must carefully
administer promotional strategies to help assure a high degree of channel member
The chapter discusses each of these issues in detail. The success of these promotional
strategies is influenced greatly by the degree of cooperation the channel manager can
secure from channel members in the implementation of these strategies.
Learning objectives
1) Recognize that reseller (channel member) support is one of the major tools of the
manufacturer’s promotional mix.
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Chapter Topics
1) Basic Push Promotional Strategies in Marketing Channels
2) “Kinder and Gentler” Push Promotion Strategies in Marketing Channels
Chapter Outline
In recent years, the term promotion has increasingly been used as shorthand for referring
to all of the persuasive communications employed by businesses and other organizations.
These include advertising, personal selling, publicity, sales promotion, sponsorship, and
point-of-purchase communications. Some marketing texts use the term “integrated
marketing communications” to refer to the systematic use of several or all of these tools
in a coordinated effort to achieve maximum promotional impact.
Some manufacturers rely on promotion in the form of advertising to their target markets
to “pull” their products through the channel and hence indirectly secure channel
cooperation. The belief underlying this so-called pull strategy is that by building strong
consumer demands, the manufacturer will force channel members to automatically
promote the manufacturer’s product because it is in their obvious self-interest to do so.
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Basic Push Promotional Strategies in Marketing Channels
Promotional strategies emphasizing the push approach initiated by the manufacturer but
A) Cooperative Advertising
One of the most pervasive forms of promotional assistance offered by the manufacturer
to channel members is that of cooperative advertising. One of the most common is the
sharing of costs on a 50-50 basis up to some percentage of the retailer’s purchases from
the manufacturer.
Figure 12.2 shows some prepared newspaper advertisements offered by FRAM/Autolite®
to its dealers.
B) Promotional Allowances
The most typical strategy used for promotional allowances is to offer the channel member
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The availability of scanner data has made it feasible for manufacturers to measure the
effects of promotional programs more accurately.
C) Slotting Fees
Key Term and Definition
▪ Slotting fees or slotting allowances: Payments (either in cash or merchandise) by
manufacturers to persuade channel members, especially retailers, to stock, display,
and support new products.
win-lose situations.
D) Displays and Selling Aids
It is estimated that $25 billion is spent each year on displays and selling aids in all types
of retail stores.
E) In-store Promotion Events
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Most in-store promotions are short-term events designed to create added interest and
excitement for the manufacturer’s products.
F) Contests and Incentives
Contests and incentives sponsored by manufacturers to stimulate channel member sales
efforts for their products are another popular form of promotion.
Key Term and Definition
▪ Push money: Offering monetary rewards directly to channel member salespeople for
“pushing” certain products.
In the development of any contest or incentive program, the manufacturer should go out
of its way to determine the views of channel members toward such forms of promotion.
G) Special Promotional Deals and Merchandising Campaigns
Special promotional deals and merchandising campaigns comprise a catchall category. It
includes a variety of push type promotional deals such as discounts to channel members
to encourage them to order more products, favorable offers to consumers to foster larger
purchases, percentage or cents-off offers, rebates, coupons, prizes, and premium offers.
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4. Encourage the diverting of merchandise to other retailers and wholesalers
Key Term and Definition
▪ Trade loading, forward buying or channel stuffing: Occurs when manufacturers
induce retailers and wholesalers to buy far more products than they can sell in a
“Kinder and Gentler” Push Promotion Strategies in Marketing Channels
Other promotional strategies, whose ultimate purpose is also to get channel members to
push a particular manufacturer’s products, stress doing so using more finesse, subtlety,
A) Training Programs
Training programs aimed at improving the performance of the channel members’
salespeople can be one of the most effective strategies for building channel member
promotional cooperation. Such programs can demonstrate in a highly visible way the
manufacturer’s commitment to helping channel members in an area in which many of
them need help.
B) Retail Level Training Programs
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Training programs aimed at retail salespeople are useful for products that still need a
significant level of personal sales assistance. Sales training at the retail level should
emphasize:
C) Quota Specification
Key Term and Definition
▪ Sales Quotas: The sales volume that manufacturers specify for channel members to
generate during a certain period of time.
Manufacturers set quotas in the belief that they will spur channel members on to greater
effort in return for rewards offered for reaching or exceeding the quotas.
D) Missionary Selling
Key Term and Definition
▪ Missionary selling: This term was first used to describe the activities of
manufacturer’s salespeople who were sent specifically to convince distributors that
In the consumer goods industries, missionary salespeople can perform any of the
following activities:
• Checking wholesale and retail inventory levels
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In the business-to-business market, they are often involved in:
• Training distributor salespeople
The use of missionary salespeople in building channel member promotional support is a
two-edged sword.
On the positive side, missionary selling is a useful promotional strategy when the channel
member lacks the sales capacity or competency to handle all of the tasks assigned and
desires this kind of assistance.
On the negative side, several problems can exist:
• Using missionary salespeople is expensive
E) Trade Shows
Trade shows are usually annual events organized by associations in industries.
The main objective of participating in a trade show (aside from making sales) is to attain
the maximum impact and gain the widest recognition for the firm’s products – especially
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• It provides an opportunity to show channel members new products, strategies, and
promotional programs on a face-to-face basis.
• It offers a chance to socialize with channel members in ways that might not be
Answers to Review Questions
1. Manufacturers that do not sell directly to their final users are dependent upon
2. Many promotional strategies require a good deal of support from channel members to
work successfully. If the channel members do not offer this support, the entire
3. The main point of this question is to focus attention on the inadequacy of “hit or
miss” or ad hoc approaches to promotion in the marketing channel. Those
promotional strategies that work best are the ones that are part of an overall
4. The objective of this question is not to have students reiterate the text explanations,
pros and cons, and examples. Rather, this question makes an excellent outside
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5. The limited evidence that is available suggests that this is not true. If the channel
members see a manufacturer’s training program as merely another way of its seeking
6. The evidence available on the use of coercive power in the marketing channel
suggests that coercive power is not a good base to use in the development of channel
7. The use of missionary salespeople may foster conflict if a channel member perceives
the services performed by these salespeople as a step toward the manufacturer selling
8. Trade shows are a tremendous opportunity for manufacturers to solicit extra orders,
Commentaries on lanes for Discussion
1. Lowes used frequent updates on Facebook and Twitter to introduce new products
with discounts up to 90%, but only for those who entered their email addresses
quickly. Promotion via Facebook or Twitter (i.e., social networking sites) has proven
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As the result of the use of Facebook and Twitter, user groups and forums began to
emerge discussing the Lowes promotion. However, after a relatively short period of
2. The manufacturer of the fresh pasta was counting on the product being featured using
the special display in supermarkets. Without this display, the product could easily get
3. Many consumer product markets can be segmented based on the amount of service
customers desire – and are willing to pay for. For these product categories, a
continuum of retail service levels, including personal selling, will be successful.
4. The point of this issue is to show that no product or organization, no matter how
“highbrow”, can avoid the need for promotion. Whether promotion can really be
5. Challenges faced by manufacturers in designing sales contests and incentives aimed
at channel members incorporates two areas: (1) understanding what particular
incentives would be received by the channel members and (2) ensuring that whatever
Promotion through the Marketing Channel
6. Given the extreme seasonality of its sales, Aris Isotoner had little choice but to
become expert at gaining customers’ attention during the Christmas crush. Point-of-
Purchase displays can do this quite effectively. But, because it sells through
independent intermediaries, its POP can be only as effective as their placement by
7. Some have coined the Gillette app for the iPhone, the goofy brand-builder app.
Gillette’s iPhone app, uArt, is attempting to combine brand visibility with an element
.