ATL and BTL
ATL (Above The Line) is the first group of marketing expenses. These are the "brand image" expenses that are to improve band awareness, perception, and finally influence the intent to buy among the shoppers. To achieve it usually TV/radio/outdoor or the internet are the media used for communication.
Unlike for the manufacturers, ATL investments of distributors and retailers are usually focused much more on PR and price communication. The exception is the own brand, which should be communicated by the brand owner in the same way the manufacturers do, and has the same impact on the product sales. The general (non-brand) communication covers in the game:
- PR communicating the general values delivered by the business, e.g. quality, service, convenience, assortment range etc.
- Price communication telling about good price to quality ratio, and superior price offer as compared to competitors.
These two forms of ATL investments have quite significant impact on sales in case of retailers. If a product is available at a number of retailers, PR and price communication increase share of the stores in the overall product sales in the market (while the overall sales of the product reflects the brand investment).
For the distributors PR and price communication of their customers tend to buy every product from a number of suppliers - this investment increases share of the business in the product purchase.
BTL (Below The Line) - marketing activities at the point of sales, addressed directly to shoppers, and intended to influence their shopping decisions there. In practice Point of Sales materials (POSM) are used to improve product visibility and appeal at store.
In the game the BTL investment is to increase the shelf space occupied by the products in the market. It is to be the case for distributors/retailers who decided to use automatic shelf space allocation. If they decided to manually allocate the investment does not have to make any difference. However, since it is a fee that directly feeds the customer profit, it's good to use it in negotiating the trade terms, including the guaranteed shelf space.
Investment in BTL are made by the brand owners who sell their own product to other businesses for re-sale. Since retailers sell to end-shoppers, they do not invest in BTL. They manage their shelves independently. They can benefit from investment of other businesses. Distributors can both benefit from the manufacturers investments, and invest in BTL at their customers.