Sales Promotion

Short Term Trade Allowances

This promotion offers channel partners price breaks for agreeing to stock the product.  In most cases the allowance is not only given as encouragement to purchase the product but also as an inducement to promote the product in other ways such as by offering attractive shelf space or store location, highlighting the product in company-produced advertising or website display, or by agreeing to have the retailer’s sales personnel “talk-up” the product to customers.

Allowances can be in the form price reductions (a.k.a. off-invoice promotion) and buy-back guarantees if the product does not sell in certain period of time.

Sales Incentives or Push Money

Since sales promotions are intended to stimulate activity that leads to meeting promotional objectives, it makes sense that these can also apply to those in a channel member’s organization who also affect sales. Thus, a marketer may offer sales promotions to their reseller’s sales force and customer service staff where they are used as incentives to help sell more of the marketer’s product. Sometimes called push money, these promotions typically offer employees cash or prizes, such as trips, for those that meet sales requirements.