TL;DR A trade promotion is an incentive a brand gives its distributors, stockists and stores so they stock, display or sell more. Philippine sales teams usually call it a scheme. Common forms are an in-bill discount, free goods, a paid display and a rebate after a target. Run one against a baseline, check it at the store, pay claims against proof and read ROI on secondary sales.
You know the week. A scheme is signed off at head office in Metro Manila and the memo goes to the distributor. A month later, a rep in a provincial sari-sari store finds the tindera has never heard of it. The discount was taken, just not passed down.
Trade promotion meaning: who gets paid
A trade promotion pays the business between you and the shopper: the distributor, wholesaler, stockist, store or dealer. A consumer promotion pays the shopper. A raffle entry on a sachet or a coupon at the checkout is a consumer promo. One free case for a sari-sari store that orders above a set amount is a trade promotion. Most brands run both: the scheme puts stock on the shelf, and the consumer offer moves it.
Everything a brand spends on schemes is its trade spend. Brands run schemes to get a new SKU or sachet size into more stores, win a display, close coverage gaps on a route or load stores before the Ber months. A scheme works through partners, so it shows first in secondary sales: what your distributors sell on to stores.
Types of trade promotion, with Philippine examples
Pick the scheme from the goal, and agree before launch what the rep will check at the store. Other guides call an in-bill discount an off-invoice discount, and a supermarket listing fee a slotting fee.
| Scheme | What the partner gets | Philippine example | What to check |
|---|---|---|---|
| In-bill discount (temporary price reduction) | A lower price on the invoice for a set period | A launch price on a new sachet size for its first month | The store's shelf price matches the promo price |
| Free goods or bonus pack | Extra stock when the order passes a set size | One free case for every ten ordered | The store owner actually received the free cases |
| Period purchase scheme | A tiered payout on what a partner buys over a quarter or season | A higher payout for hardware dealers who cross a quarterly volume tier | Each dealer's purchases across the whole period |
| Display and visibility payment | A fee or free stock for shelf space or a display | A paid rack at the sari-sari counter, or a listing fee for a supermarket end cap | A dated photo of the display on every visit |
| Rebate after target | Money back once the partner hits an agreed goal | A rebate when a stockist gets a new SKU into its target stores | The goal met on secondary sales |
| Sales contest | Prizes for the stores or distributors that sell the most | A leaderboard for the most new stores billed this month | Sales confirmed store by store |
Where the scheme runs: sari-sari routes, supermarkets and dealers
In general trade, distributors, wholesalers and stockists serve sari-sari stores across Luzon, Visayas and Mindanao, many of them by van sales. The scheme rides on the distributor's invoice, so the risk is leakage: the discount stops at the distributor. Your control is secondary sales tracking.
In modern trade, supermarkets, convenience stores and chain drugstores agree promotions in a yearly promo calendar. The risk there is compliance: did the agreed price and display show up in every branch?
Set the review window to the buying cycle. FMCG schemes can often be read in a few weeks. Building materials dealers, such as paint and hardware stores, and agri inputs buyers order across a season. Judge their scheme after one month and you may cancel one that was working.
Trade promotion planning and execution: seven steps
Steps 1 and 2 are the plan. The other five are where the money leaks: a stockist keeps the discount, a paid display is never built, or a claim is paid on a Viber photo nobody can date.
1. Give the scheme one job and a baseline
Owner: trade marketing, with sales.
Choose one job, such as a launch or a slow month. A scheme with two jobs cannot tell you which one it did. Then write the baseline, what the same target stores sold in the same weeks last year. Skip it and every peso of growth gets credited to the scheme, even in December, when sales rise anyway.
2. Make the offer fit in one sentence at the counter
Owner: trade marketing, with finance setting the cap.
Picture your rep at the counter while the tindera serves a suki. If the offer needs more than one sentence, it is lost. “Ten cases this month, one case free” works. Three tiers with exclusions do not. Before sign-off, the plan should name the target stores, the offer and its dates, the spending cap agreed with finance, and the proof that releases payment.
3. Put it in billing, not in a Viber group
Owner: sales operations.
Load the scheme into your distributor management system, so it appears on the store's invoice, and into the rep's order app. Once billing applies the offer on its own, nobody can quietly skip it.
4. Brief every distributor and reach every target store
Owner: area sales managers and reps.
Brief distributors and stockists before day one, and say how you will check. The common leak is a distributor that takes the benefit on its own order and never passes it down. The first week of secondary invoices shows it: if one distributor's stores are billed at full price, call that distributor first.
5. Check each store on the visit
Owner: reps, with promodisers or auditors.
At each store the rep confirms four things: the display is up, the shelf price is right, the stock is there and the owner got the offer. A dated photo ends most arguments. Retail audit and display photo checks cover far more stores than a manager could visit. When one distributor's claims grow faster than its sales, pause the scheme there before the budget runs out.
6. Pay claims against proof, and pay quickly
Owner: finance, with sales operations.
Match every claim to its proof: invoices, display photos or purchase records. Pay the proven part, and pay it fast. A distributor kept waiting months on one claim will give your next scheme little push.
7. Read ROI on secondary sales, then review
Owner: sales and trade marketing.
A distributor's purchases from you can jump just because it stocked up, so read the result on secondary sales:
- Count secondary sales above the baseline, only in stores where the scheme really ran.
- Take off the dip after it ended. Stores that bought early did not buy more.
- Weigh the extra margin against the whole cost: discounts, free goods, display fees, rep and promodiser time, and claim handling.
Report incremental volume and cost per incremental case for every scheme. Drop the ones that do not pay and space out the rest. When schemes run back to back, stores learn to wait for the next one before they order.
When Excel and Viber stop being enough
Excel and a Viber group hold up for a few schemes. Past that, nobody can say which stores got the offer or how much budget is left. Choose a tool by where your money leaks. If it leaks in trade promotion planning, a planning and optimization tool fits. If it leaks between sign-off and the shelf, you need an execution tool. It should apply the scheme on the secondary invoice by itself, record proof on every visit and match each claim to that proof.
BeatRoute works on the execution side of trade promotion. Its distributor management system applies in-bill schemes when the secondary invoice is created, and moves claims through a workflow to payment. BeatRoute suits brands that run trade schemes across many distributors and outlets; if you only track a few schemes for one distributor, a spreadsheet may do.
On BeatRoute, a leading paints brand in the Philippines raised sales productivity by 30% (leading paints brand case study). That is a rep productivity result, not a scheme result: measure your scheme against the baseline from step 1.
Run a pilot: one live scheme, a few distributors, one cycle. Compare how many target stores got the offer, and how fast claims were paid, against stores run the usual way. To see one of your schemes run this way, book a demo.
Frequently Asked Questions
What is trade promotion management (TPM)?
Trade promotion management (TPM) is the process and software for running schemes, from planning to claims and ROI.
How is trade promotion management different from trade promotion optimization?
Trade promotion management runs each scheme. Optimization studies past schemes to predict which offer and timing will pay best, so it needs clean execution data first. Read more on trade promotion optimization.
Is a trade promotion the same as trade marketing?
No. Trade marketing is the wider work of winning distributors and stores over, through visibility and relationships as well as offers. A trade promotion is one tool inside it. See our guide to trade marketing in the Philippines.
