What are market development funds?
Market development funds (MDF) and co-op funds are manufacturer money that pays channel partners for marketing — how they are claimed, and how ClaimDS settles them.
Market development funds (MDF) are money a manufacturer sets aside to pay channel partners for approved marketing and demand-generation activity — advertising, in-shop branding, dealer boards, joint promotions and events. Co-op (co-operative advertising) funds are the closely related, usually accrual-based version, where the fund a partner can draw grows with what they buy or sell.
The two are often used together but differ in how the pool is set: co-op funds accrue as a percentage of purchases or sales, while MDF is typically discretionary — allocated by the manufacturer for a specific campaign or partner.
How an MDF claim works
An MDF or co-op claim runs through a short lifecycle: the fund is allocated, the activity is pre-approved, the partner executes it, then claims reimbursement with proof of performance (dated photographs, the tax invoice, the pre-agreed plan), and the manufacturer settles — in India, usually by credit note. Funds that skip pre-approval or lack proof are where money lapses unclaimed.
How ClaimDS handles it
ClaimDS treats an MDF or co-op reimbursement like any channel claim: it captures the claim and its evidence, validates it against the agreed terms, and settles it through a reconciled credit note with a full audit trail — so approved spend is paid and unclaimed fund exposure stays visible.
Read the full guide: MDF and co-op claims in India — allocation, claim process, proof of performance and utilization.
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