products on the shelf unless they receive more trade-promotion money, whereas the
brand managers want to spend the limited funds on consumer promotion and ad-
vertising. Because the sales force knows the local market better than do the brand
managers sitting at headquarters, companies have given substantial funds to the sales
force to handle.
Manufacturers face several challenges in managing trade promotions. First, they
often find it difficult to police retailers to make sure they are doing what they agreed
to do. Manufacturers are increasingly insisting on proof of performance before pay-
ing any allowances. Second, more retailers are doing forward buying—that is, buying
a greater quantity during the deal period than they can sell during the deal period.
Retailers might respond to a 10 percent off-case allowance by buying a 12-week or
longer supply. The manufacturer has to schedule more production than planned and
bear the costs of extra work shifts and overtime. Third, retailers are doing more di-
verting, buying more cases than needed in a region in which the manufacturer offeredpart five
Managing and
Delivering Marketing(^602) Programs
Major Consumer-Promotion Tools
TABLE 5.9(cont.)
Product Warranties: