Trade promotions: A call for a more rational approach

Power retailers have come to dominate the retail competition in recent years. A new class of merchants, they not only have begun to rule their tier of the channel, but they are also e:<erting tremendous influence over their suppliers. Nowhere is this more evident than in the packaged goods industry, where retailers have l teen able to demand trade deals from manufacturers previously believed to rule the distributive trade with an iron hand. Manufacturers ha tie responded by engaging in what seems to be 3 neyer-ending escalations of promotional and price allowances aimed at buying their way onto the retailers’ shelves.