The name of the chapter is Promotion through the Marketing Channel and this question is about Special Promotional Deals and Merchandising Campaigns.

Can you please explain in simple words and shorten it, focusing more on the key concepts (Ex: Trade loading, forward buying, or channel stuffing)?

Please explain by focusing on the fact that special deals and merchandising campaigns are in such widespread use does not mean that most manufacturers are happy with them. On the contrary, a great deal of concern exists about their value as a promotional tool. Indeed, research has shown that these kinds of trade deals can (1) erode consumer brand loyalty, (2) foster deal-to-deal purchasing by channel members, (3) fail to provide pass-through saving for consumers, and (4) encourage the diverting of merchandise to other retailers and wholesome instead of being sold at discount to consumers.

I have copy-pasted from the textbook to have a clearer idea. Just the main

Special Promotional Deals and Merchandising Campaigns Special promotional deals and merchandising campaigns comprise a catch-all category. It includes a variety of push type promotional deals such as discounts to channel members to encourage them to order more products, favorable offers to consumers to foster larger purchases (for example, buy one and get one free), percentage or cents-off offers, rebates, coupons, prizes, and premium offers. These kinds of trade promotions are especially popular in grocery and drug product categories but have also become common for consumer electronics, home improvement products, and apparel. Promotional deals and merchandising campaigns may overlap one or more of the six promotional strategies previously discussed. For example, a promotional deal on a cereal product may require the retailer to use a special display to feature the cereal prominently in the store in exchange for a promotional allowance. Promotional deals and merchandising campaigns have been very heavily used in recent years. For example, some 60 percent of supermarket sales were estimated to involve items that were put on deals, and as much as 90 percent of soft-drink products were sold on deals. The fact that special deals and merchandising campaigns are in such widespread use does not mean that most manufacturers are happy with them. On the contrary, a great deal of concern exists about their value as a promotional tool.37 Indeed, research has shown that these kinds of trade deals can (1) erode consumer brand loyalty, (2) foster deal-to-deal purchasing by channel members, (3) fail to provide pass-through saving for consumers, and (4) encourage the diverting of merchandise to other retailers and wholesalers instead of being sold at discount to consumers. Even more worrisome for manufacturers, special deals have increased the already fierce competition for channel members' shelf space. Thus, manufacturers find themselves having to offer more and more inducements in the deals to meet the competition to keep their products on store shelves.38 Finally, and perhaps most worrisome of all, are the increased costs of special deals and merchandising campaigns. As the "ante" keeps increasing in terms of what channel members are demanding, so do the manufacturers 'costs of meeting these demands. Nevertheless, an entire "culture" built on promotional deals and merchandising campaigns has become the norm in consumer-packaged goods' channels. This culture, in which manufacturers induce retailers and wholesalers to buy far more products than they can sell in a reasonable period, is usually referred to as trade loading, forward buying, or channel stuffing. The result is that at any given time, $75 to $100 billion of merchandise is in the channel, stacked up in-retailer and wholesaler warehouses as well as in trucks or railcars. This gridlock of excess inventory slows down the distribution process so that it takes an average of 84 days for a product to travel from factory floor to retail shelf. It is estimated that only 30 percent of the trade promotion discounts offered by manufacturers are actually passed through to consumers in the form of lower prices. Of the remaining 70 percent, 35 percent is lost in inefficiencies and the other 35 percent goes directly into retailers' and wholesalers' pockets.39 Figure 12.6 provides an illustration of what typically happens in promotional deals involving trade loading. Unfortunately, there is no simple solution to the problems created by such promotional deals. As we pointed out previously in this chapter and earlier in this text, retailers are becoming larger and more powerful. Hence they have the capacity to be very aggressive and demanding in regard to special deals and merchandising campaigns. They expect, and are able to get, very favorable terms. Manufacturers such as Procter & Gamble, which are attempting to escape from this deal treadmill by reemphasizing product brand development through renewed stress on advertising to build consumer brand loyalty, face a tough challenge. However, the availability of social media sites in recent years, especially Facebook and Twitter, that enable manufacturers to communicate more directly with consumers may help to offset the demands of powerful retailers' constant pushing for more special deals. Kraft Foods, for example, has developed advertising campaigns specifically for Facebook for three of its most popular products: Wheat Thins crackers, Oreo cookies, and Crystal Light flavored beverage. 40 Pepsi Co. has followed a similar path by developing special Facebook advertising campaigns for its Mountain Dew soft drink41 and Procter & Gamble has designed campaigns for its Olay skincare products, Tide detergent and Ivory Soap for YouTube, Twitter, and Facebook.42 All of these manufacturers believe that connecting directly with consumers via social media helps to reinforce the value of their brands and fosters brand loyalty. Strong consumer loyalty can serve as an antidote to intense price-oriented retailer promotions that seek to get consumers to buy any brand product that happens to be on deal at a given time.

FIGURE 12.6 Channel Member ABC Foods (a manufacturer) offers a special Behavior Resulting promotional deal by giving an extra 25% off from Promotional list price on its "Oatcrisp" cereal. This Deals Involving Trade reduces the case price by $10. Loading XYZ Supermarkets (a retailer) orders 5,000 cases of "Oatcrisp" at the reduced price saving $50,000. These are shipped to XYZ's warehouse. XYZ Supermarkets distribute 2,500 cases to its stores for immediate sale at reduced prices, thereby passing on to consumers the lower wholesale price it paid to ABC Foods. XYZ retains the remaining 2,500 cases in its warehouse. One week later, XYZ sells 1,000 cases of "Oatcrisp" at a very small markup of $1.00 per case to another supermarket chain that had not taken advantage of ABC's original offer. Two weeks later XYZ distributes the 1,500 cases of "Oatcrisp" remaining in its warehouse to its stores for sale to @Cengage Learning 2013 consumers at the regular higher price