Clique Pens

a) How are the objectives of MDF different from trade discount?

Market Development funds (MDF) are directed towards creating consumer awareness via channel
partners or advertising channels whereas the trade discounts are incentives given to the channel partners
in order to motivate to push the companys product.
MDFs main objective is to create pull in demand via consumer oriented promotions on the other hand
Trade discounts whole objective is to create demand via push strategy. MDF is designed to achieve longterm brand building by directly conveying value to the customer via different channels. Trade discount is
used to reduce the companys inventory and increase sale in the limited period of time via channel
stuffing.
MDF can be viewed as a part of marketing concept if implemented well and Trade discount can be viewed
as the selling concept.
MDF calculation is derived by the size or penetration of the promotion whereas the trade discount is the
percentage of amount of sales that a channel partner makes.
b) Should clique be more concerned with retailer need or consumer need?
Clique should be concerned about both retailer needs & consumer needs depending on the sales &
distribution channel (SDC).
If you consider big multi-brand retail channel like Walmart, their bargaining power is higher. They also
account for huge bulk orders which are necessary for the company and to cover the fixed costs. (Retailer
Needs)
Whereas small indirect retail channels have relatively lower bargaining power & consumer needs are of
vital importance over here. Since the consumer walking in is brand aware and also has a preference
mindset before purchase. This consumer segment ensures the profitability of the company. (Consumer
needs)
c) How should Ferguson manage push/pull conflict between Marketing and sales department?
Ferguson should Formulate the concept of MDF but the allocation of MDF should be entrusted to Sales
or Marketing depending on the distribution channel.
Case clearly mentions that Big Retailers like Walmart & Walgreens would not be interested in dealing
with Clique if they arent incentivized well so they should be handled by Sales departments approach of
Push.
It is mentioned in the case 85% of people walk in to stores with preferred set of brands that they would
like to buy but are influenced by the retailer, but still Small retailers and office retail stores should be
handled via Pull approach. Since this is essential to ensure the long-term brand building or sustainability
along with profitability.

IIM Indore PGP at Mumbai

Group 9

Mehta Akshay/ Natasha Gautam/ Jonny Paul