Trade promotions are widely practiced but sparingly researched. Retailers prefer trade promotions that provide short-term economic benefits; vendors prefer those that provide long-term, franchise-building benefits. This research develops and tests a model of trade promotion receptiveness by retailers, using data collected from senior executives from a broad swath of the retail industry. Both promotion satisfaction and relationship satisfaction with the vendor play important roles in trade deal receptiveness. Vendors could increase relationship satisfaction by emphasizing benevolence and enhance promotional satisfaction by improving their trade promotion management systems and processes
These conditions ensure that a retailer and vendor often end up working at cross-purposes for the selection of trade promotions. In hypercompetitive consumer goods markets such as groceries, retailers also often enjoy a much more
powerful position (i.e., a few retailers control 80 percent to90 percent of the market), so vendors cannot easily persuade
retailers to accept trade promotions that conflict with the retailers’ interests. The actual path for trade deal receptiveness depends on relationship satisfaction. Therefore, we suggest that vendors should try to develop relationship satisfaction; an import antway to do that is to improve the systems and processes pertaining to trade promotions and increase retailers’ trust by focusing on their own benevolent behavior.