For many years Procter & gamble and other FMCG giants used special deals, merchandising campaigns as the mainstay of their channel management strategy. Special discounts, allowances, slotting fees, coupons, payment for display were used to get retailers and wholesalers to push their products. The main problem with this approach is that it can be expensive. It increases manufacturer’s promotion costs? Contrary to this, P&G offered its product to channel members at lower prices on an everyday sustained basis. P&G believed that this would reduce its own cost and enable channel members to pass on lower prices to consumers, also on every day basis.

• Comment on this strategy. Evaluate possible strength and weaknesses.
• Discuss from standpoint of view of manufacturer and channel members

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