Cadbury - Wrigley’s Trade Promotions

Yim Fu Tin 14034942D

Trade promotions in 2013

        As we all know, trade promotions are used to build demand, it always good for end customers, for example “buy one, get one free”. However, trade promotion is one of the most important factors of earning profit for manufacturers. Eddie Yoon (2012) said that trade promotion can be a profit treasure trove of a profit landmine to manufacturers and retailers.

It is clearly that Wrigley’s trade promotions are flawed in 2013. From the Mondelez International official report, one of the main competitors to Wrigley, Cadbury has a positive annual growth. However, Wrigley has zero value growth and loss of market share in 2013. To evaluate the promotions schemes, there areas should be discussed are schemes execution, design of schemes and relationship between consumer, sales and trade promotions.

Schemes execution in Wrigley promotions

        Trade promotions including special pricing, sales incentives, discounted display fixtures, demonstrations and no-obligation gifts, additional shelf-space usually provided as incentives to companies. However, Wrigley provides incentives in a different way. It provided merchandise equipment and merchandise items such as posters and banners instead of paying for shelf space.

        In case of Wrigley providing merchandise equipment and merchandise items as incentives, distributor’s sales men become the major interface between Wrigley and retailers. They were offered additional incentives for sales attained, this create excitement among distributor’s sales men.

        In order to maximize the sales from distributor’s sales men, Wrigley has no provision to communicate the schemes to retailers. Distributors can procure gifts of their choice from markets and manage the promotion themselves. Benign competition is create between distributors and result in wide assortments of trade schemes.

        To sum up, execution of the schemes are mainly depends on distributors, and there are plenty of promotions and activities among distributors sales men for create excitement. Therefore, good efficiency of schemes execution is ensured.

Design of Trade schemes

        For a successful trade scheme, flexibility and concentration are two main important factors. For flexibility, Wrigley’s trade schemes cover diversity of promotions including gifts, discount, free display fixtures, sales incentives, lucky draw, TV show and website. It ensures the trade schemes attract people with different interests. For concentration, Wrigley provides extra discounts for high margin products, and a special trade scheme for the best-selling product. It promotes the product with the most potential and enhances its growth.