Will retailers allocate manufacturers' budgets

Date of publication: June 14, 1978

Author: Georg Gramse

Abstract:

The budgetary allocation of many product groups is made long before the responsible advertising managers have decided on the allocation of sales promotion and advertising expenditures. This is the case with branded articles. With such goods both retailers - who prefer sales promotions - and the manufacturers - who prefer classical advertising - influence the budgetary allocation. With branded articles the stronger influence is obviously to be found with trade since two thirds or more of the total turnover of such products depend on such promotion activities. This paper will try to answer the following question: what is the economic situation of the retailers? why do retailers prefer promotions? what advantages do retailers actually receive with a power-shift to their advantage? what does such a power-shift imply for the industry? what advantages does brand advertising offer? what is the consumer’s attitude towards branded articles?

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