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TERM
Trade Promotion
Marketing activity funded with retailers to boost an item’s sales.
Definition
A trade promotion is a short-term discount or merchandising event that a manufacturer provides to a retailer to increase product visibility and drive incremental volume.
How to Calculate
Estimate the value offered by comparing the promoted price or discount to the regular shelf price, then measure the uplift in units or dollars during the promotional period to quantify its impact.
Why it Matters
Improves short-term sales by increasing visibility and reducing price barriers.
Key Advantages
Strengthens retailer support, boosts item velocity during planned windows, and helps brands influence shopper behavior at the shelf.
Example
Regular shelf price is $4.00 and the promoted price is $3.00, so the discount is $1.00. During the promotion the item sells 12,000 units versus a baseline of 8,000 units, resulting in 4,000 incremental units driven by the trade promotion.
Use it to
Identify how much of the volume lift comes from the promotion versus what would have sold anyway, then adjust depth or tactics to improve incremental efficiency on future trade events.
