AST1 - Task 1
Strategies for Motivating Intermediaries
Higher Margins – Offer higher margins to dealerships to incentivize promoting our new line.
Special Deals – Extended terms for stocking inventory
Premiums – Tiered discounts for volume unit purchases.
Cooperative Advertising Allowances – Subsidizing a portion of the dealership’s local advertising cost.
Display Allowances – bonus payments for premium floor space in high traffic areas. Sales Contests – Incentivize the dealer’s sales team to promote our scooter over the competition.
Advantages and Disadvantages
Higher Margins – This has the advantage of offering a higher return to the dealership and/or the salesperson. However, the difference of a percent or two of…show more content… These are often for local newspaper ads. The downside to the supplier is that their competitor may also offer an advertising allowance and receive a more desirable location within the ad. This is something that would have to be clearly negotiated.
Display Allowance – Investing in this promotional strategy can he very effective as it can guarantee that the scooters are displayed prominently in a high traffic area of the store. The disadvantage is that the supplier has no control over the placement of competitive products in relation to their scooters.
Sales Contests – Sales contests can be very effective. The contest keeps the featured product line in front of mind with the sales team members as the status of the contest is generally discussed at the team meeting every morning. Sales people can be very competitive and work very hard to outperform their contemporaries. The downside of a sales contest is that the cost of the reward, be it a vacation cruise, a flat screen TV or a gift certificate, is committed to prior to the contest and not dependent on the results. The scenario can evolve where the increased profit from the contest is insufficient as a return on the investment of the cost of the reward.
Evaluate Effectiveness of Strategies
Higher Margins – I would measure the sales results on a weekly basis to ascertain whether the incentive is effective.
Special Deals – I would monitor sales on a weekly basis to