Answer to Question #154317 in Management for Prabhdeep

Question

Explain the difference between trade promotion for new products and existing brands

Answer 1

Trade promotions vary from, if the product is being introduced in the market for the first time and if it is an existing product. When coming up with strategies to promote an existing product the aim necessarily is to create brand awareness by reminding customers and in return increase on demand of the product by allowing consumers to prefer and prioritize the product. This is different from trade promotion of a new product since the consumers and the target market have never seen nor used the product and therefore they need to be convinced that they will fully achieve their satisfaction if they purchase the product. Techniques on promoting a new product need to be extensive and well financially planned as more samples will be given out for consumers to try out the product unlike an existing product where the consumers have an idea of the product.

This means that promoting a new product will be an expensive activity which when well invested up on the return is high. An existing product is already on the retail stores shelves and therefore promoting it is easy as one may offer discounts on them easily while a new product is difficult to promote as the manufacturer has to first, bring it to the retailers shop who may be afraid to purchase in bulk and will require stock given on accrued basis to pay later up on sale of the product, this is a risk since the product is being tested and its return is uncertain to the manufacturer. Promoting an existing brand may take a short time while a new product needs a longer time for it to be on consumers list of preferences in their purchases.