trade-off

(noun)

A trade-off involves a sacrifice that must be made to obtain a certain product.

Related Terms

Examples of trade-off in the following topics:

  • The Marketing Exchange

    • The exchange process allows the parties to assess the relative trade-offs they must make to satisfy their respective needs and wants.
    • For the marketer, analysis of these trade-offs is guided by company policies and objectives.

  • Defining the Business Mission

    • A well-crafted mission statement is useful as a means of resolving trade offs between different business stakeholders.

  • Channel Member Characteristics

    • However, the trade-off is in how widely available the company wants its product.

  • Trade vs. Consumer Promotions

    • Trade promotions are targeted toward retailers while consumer promotions are targeted toward consumers.
    • Trade promotions are targeted toward retailers while consumer promotions are targeted toward consumers .
    • Trade promotions are marketing activities executed between manufacturers and retailers.
    • Price deals are temporary reductions in price, such as 50% off an item.
    • Differentiate between trade and consumer promotions relative to a product's marketing mix

  • Sales Promotion

    • There are two types of sales promotions; consumer and trade.
    • A consumer sales promotion targets the customer while a trade sales promotion focuses on organizational customers that can stimulate immediate sales.
    • Commonplace techniques include price deals that offer a temporary price reduction while cents-off deals offer a brand at a lower price, usual as a percentage marked on the package.
    • Wholesalers, retailers and other organizational groups are offered a wide array of sales promotion devices such as trade allowances or short term incentives to encourage retailer to stock up on a product, dealer loaders incentivizing product purchase and display, trade contests for selling the most product, point-of-purchase displays to create impulse buying and spiffs or bonus commissions on certain products and trade or functional discounts paid to distribution channel members for conducting sales and special events.

  • Discounting

    • Electric power companies use the logic of seasonal discounts to encourage customers to shift consumption to off-peak periods.
    • Trade discounts, also called functional discounts, are payments to distribution channel members for performing some function.
    • Trade discounts are most frequent in industries where retailers hold the majority of the power in the distribution channel (referred to as channel captains).
    • Trade discounts are given to try to increase the volume of sales being made by the supplier.
    • Discounts, such as 75% off, are used to draw customers to purchase items.

  • Trade and Globalization

    • Countries engage in international trade for two basic reasons, each of which contributes to the country's gain from trade.
    • The World Trade Organization (WTO) was formed to supervise and liberalize international trade on January 1, 1995 under the Marrakech Agreement.
    • If a government removes all trade barriers, a condition of free trade exists.
    • In 2008, China's two-way trade totaled US $2.56 trillion.
    • In 2001, it also joined the World Trade Organization.

  • Trade Allowances

    • Manufacturers with the best trade allowances will get the best displays in the hair salon.
    • Trade discounts are given to try to increase the volume of sales being made by the supplier.
    • A trade rate discount is offered by a seller to a buyer for purposes of trade or reselling, rather than to an end user.
    • A seller supplying both trade or resellers and the general public will have a general list price for anybody, and will offer a trade discount to bona fide trade customers.
    • Other trade sales promotion methods include trade contests, which are contests that reward retailers that sell the most products, and point-of-purchase displays, which are used to create the urge of "impulse" buying.

  • The Common Market of the Southern Cone (MERCOSUR)

    • The program also proposed the Gaucho as a currency for regional trade.
    • Intra-Mercosur merchandise trade (excluding Venezuela) grew from USD 10 billion at the inception of the trade bloc in 1991, to $88 billion in 2010; Brazil and Argentina accounted for 43% of this total.
    • Trade within Mercosur amounted to only 16% of the four countries' total merchandise trade in 2010, and trade with the European Union (20%), China (14%), and the United States (11%) was of comparable importance.
    • Merchandise trade with the rest of the world in 2010 resulted in a surplus for Mercosur of nearly $7 billion; trade in services, however, was in deficit by over $28 billion.
    • It is the fourth-largest trading bloc after the European Union.

  • The World Trade Organization (WTO)

    • The World Trade Organization (WTO) was officially formed on January 1, 1995 under the Marrakesh Agreement, with the goal of supervising and liberalizing international trade between participating countries.
    • General Agreement on Trade in Services was established in 1995 to extend the multilateral trading system to service sector, in the same way as the General Agreement on Tariffs and Trade (GATT) provided such a system for merchandise trade.
    • Agreement on Technical Barriers to Trade ensures that technical negotiations and standards, as well as testing and certification procedures, do not create unnecessary obstacles to trade.
    • The WTO has managed international trade negotiations among its members since 1995.
    • Review the purpose and status of the World Trade Organization (WTO)