Out of the Box

Trade Advertising vs. Retail Advertising

By Menachem Lubinsky on June 22 2007

David, a start-up distributor of a new hand-held medical device that can be used by the medical profession or by patients at home, is in a quandary. He is in the process of deciding whether to use his limited marketing dollars to advertise his product in trade publications or take his case directly to the public. This isn’t a typical marketing dilemma as each of the approaches is a distinctly different avenue and has its advantages in the success of a product. Most often there is a clear reason why an advertiser would choose retail or trade.

The retail advertiser is clearly looking for the most direct means of communicating with his potential customer. The trade advertiser, on the other hand, is promoting his ability to serve the trade and ultimately is looking for status within the trade. This is, of course, a generalization, but the point is that it is seldom an “either or” situation, which is what it turned out to be for the medical device distributor.

There are today a myriad of trade publications in almost every field and the evidence is clear that people in a given trade read those publications to keep up with their industry. You can sometimes visit a business and find the trade publications in a waiting room or on the desk of a key executive. David was thinking trade to reach health care professionals, particularly doctors and other health care professionals to not only use the device themselves but perhaps recommend them to their patients.

On the other hand, thought David, he might have an easier sell going directly to consumers who would appreciate being able to monitor their condition with a hand-held monitor. In an ideal world, he reasoned, he probably should have done both, but given his limited resources at the moment, a choice became necessary, especially since he was a long way from widespread retail distribution.

David ultimately chose the trade route, since he was prepared to do the leg work to visit medical establishments and even doctor’s offices and because it would take a major effort to achieve widespread availability in places like drugstores. On one of his first visits to a large hospital, he was stunned at the question by the senior executive, “so what are you doing to promote the product with ordinary consumers?”

This question is very often on the minds of businesses. A salesman of a popular food item found that out when he tried to win shelf space for his product with a large grocery chain. The key buyer at the chain wanted to know how the product was being marketed but the salesman was prepared, bringing along a folder with ads, flyers, and a sheet that described the company’s marketing strategy.

It is fairly common for businesses to raise that question with salesmen of any product. They would much rather prefer a product that comes along with a marketing strategy than to have to do it themselves, cutting into their margins. Convincing a buyer that there is such a marketing program in place may spell the difference between acceptance and rejection.

Many trade ads actually show the consumer ads that they are using to win market share in the hope that a prospective buyer will envision making money on the product. One such consumer ad recently had the following heading: “When Your Customer Comes Looking for These Products, Will You be Speechless?” OK, I am not generally a fan of negative messages, but it certainly drives home the point.

A similar approach is frequently used at trade shows when exhibitors try to convince visitors that they are going the extra mile in marketing the product. They may have copy of ads or even marketing plans to show that the company is investing into the success of the product. I have even seen companies with loose-leaf binders of their marketing efforts.

Some companies totally ignore the trade component and pay dearly for it later. They advertise to ordinary consumers without taking into account that goodwill by the trade is absolutely essential. How often is it that a product is heavily advertised but not available in key retail stores where it should be on the shelf. If David were to advertise heavily but his product was not available in drug stores and surgical supply stores, how effective would his campaign be?

In some instances, it truly pays to allocate a limited budget to a more restricted but focused campaign. For example, one could advertise in a particular geographic area, but at the same time market to the businesses in those areas.

Like everything else in marketing, it is important to do the proper homework about the trade media. Some publications, are clearly the leader and are read by a significant number of people in the trade, while others are not. A good way to make sure that the publication meets the criteria is to speak to some key people in the industry and find out what it is that they are reading.

While the combination of a trade-consumer program is often ideal, sometimes it is not. If you are selling tractors, it is a certainly not for the consumer. On the other hand, if your products are already widely distributed, a good bet is to go directly to the consumer. Even then, it would be wise to allocate some funds to trade.

When it comes down to it, whether to advertise trade or consumer should never be a choice. It should be a well thought out strategic decision that will spell the difference between success or mediocrity and even failure!

Out of the Box is a collection of strategic marketing articles that Lubicom has published on various topics, trends and ideas in the marketing world. The articles have been published in the Hamodia weekly newspaper circulated on three continents to a readership of well over 100,000.

The name, "Out of the Box" is a term used frequently in business nowadays to describe creative thinking that is not the norm. It is meant to help a business pull away from the pack or separate oneself from the competition. It is to some extent fraught with risk, simply because it is not the run of the mill thinking, but it is at the same time the key to reaching the next opportunity.