File Name: push and pull marketing strategy .zip
The business terms push and pull originated in logistics and supply chain management ,  but are also widely used in marketing   and in the hotel distribution business. Walmart is an example of a company that uses the push vs. With a push-based supply chain, products are pushed through the channel, from the production side up to the retailer.
There was a time, about 40 years ago, when manufacturers of packaged goods themselves determined the marketing strategies behind their products. Making use of the power of their brands, these companies—producers of food, tobacco, beverages, toiletries, and health and beauty aids—sought to motivate consumers to buy their products through the then-passive trade distribution system. This […]. The price premiums these franchises permitted yielded the funds necessary to maintain large advertising and promotion budgets as well as sizable product development budgets.
They were considered the most sophisticated of the bunch, largely because they seemingly controlled their own destinies. Two other factors abetted the development of pull marketing. The other was network television, the golden medium for reaching a mass audience quickly, cheaply, and effectively. Now, however, this formula of brand differentiation, in-store communication, and mass advertising, predominant in American life since the end of World War II, is drastically losing ground.
The distribution system is assuming a much bigger role. The results are intensive price competition, a weakening of the franchise that brands have heretofore enjoyed, and reduced margins for the producers of packaged goods. Unless they reverse this trend, they will risk crippling their marketing productivity.
Beer is a prime example. Segmentation by life-style of most mass advertising media. Today, only network TV is a truly mass medium, but more viewing options partly as a result of cable, syndication, and VCRs are causing audience fragmentation here too.
The smaller audiences have caused steep rises in media delivery costs, so advertisers no longer see TV advertising as the efficient primary marketing tool it once was. In prime-time network TV, moreover, the cost of a major schedule is simply beyond the means of most national brands. Technology—computer-integrated manufacturing is a good example—has reduced the advantages of scale and made production innovation less proprietary. The net result: most brands lack distinctiveness, which leaves price as the chief indicator of consumer value.
Consolidation through merger and acquisition like much of business generally in the retail packaged goods trade. They expect the manufacturers to support their marketing strategies. In the grocery business, witness Super Valu stores in Minnesota, once strictly a wholesaler, now a big retailer.
Since profit margins permit only a certain amount for marketing, large trade-deal expenditures reduce the funds available for franchise-building mass advertising. The unfortunate focus of many businesses on short-term results. This stems partly from flat markets and partly from Wall Street pressure for fast earnings growth.
Price promotion is far more reliable than advertising for producing quarterly volume—though advertising may be more efficient in the long run at building the business. These forces and trends have shifted a great deal of market power to the retailers, who can now use allowances and coupons for their own purposes and, in the process, reduce their dependence on the manufacturers.
For manufacturers, competition through price promotion reduces the wherewithal for research and development, for packaging, and for advertising to maintain brand distinctiveness. After 15 years, these trends are now institutionalized among national marketers and the national trade; change will be difficult to bring about.
Makers of national brands have two options for dealing with this predicament. It requires the manufacturer to become a low-cost producer while continuing to use trade allowances and price-off coupons as defensive marketing tools.
This option is likely to suit brands whose market shares rank number three or four. To be a low-cost producer and marketer is difficult, if not impossible, for a major manufacturer with a culture and organization built on success in mass marketing and with an overhead that can be pared only so much. This would mean application of fundamental marketing verities to the altered marketplace, especially the verity that the role of marketing is not to undercut the competition but to create and keep customers.
The manufacturer following this strategy would acknowledge the importance of making the product fit the heterogeneous market. This means constant effort to make it somehow fit better—in packaging, preparation, use, storage, or purchase. The superiority can be as readily identified with the maker as the product, but different it must be or price will inevitably become decisive.
It is usually far more effective to improve and differentiate established brands than to add new ones, if only because so few new entries are successful. The manufacturer would continue catering to particular market segments.
The country is so big and diverse, and product categories so thoroughly penetrated, that variety, not standardization, is what consumers want. The manufacturer would strongly back these differentiated products with brand advertising. To have leverage, the advertising must convey a message relevant to consumers: what the advertising says about the brand is far more important than how it is said.
The manufacturer would try to improve both its message and its media coverage in market segments and local markets. As markets become more segmented, media prices escalate out of proportion to audience growth. The old methods of valuing the media may no longer apply.
Media cost per thousand packages sold, say, may be more useful than audience CPM. Through better point-of-purchase material, decor, or events, for example, the manufacturer may be able to help the merchandiser build the kind of traffic receptive to the purchase of the brand. A slew of executives normally participate in decisions about resource allocation, including advertising and promotion.
They do not all reach for the same goals, nor do they have the same values or even similar experience with which to gauge the expected results.
Salespeople like trade money; it makes their jobs easier, and their reward system is tied to volume. Brand managers like coupons because they help bring in the quarterly volume. Most brand managers are heading for general management, and their tenure in brand marketing is short-lived; they have less interest in an extended franchise of the brand.
Senior managers, responsible to stockholders for earnings performance, may choose action that appears to shift the priority away from franchise development. In this way they can offset the damage push marketing inflicts. You have 1 free article s left this month.
You are reading your last free article for this month. Subscribe for unlimited access. Create an account to read 2 more. Pulling Away from Push Marketing. This […] by Alvin A. Achenbaum and F.
Kent Mitchel. A version of this article appeared in the May issue of Harvard Business Review. Read more on Marketing or related topics Product development and Branding. Alvin A. Achenbaum is a principal of Canter, Achenbaum, Associates Inc.
Formerly he was with three advertising firms—among them J. Walter Thompson, where he was executive vice president and director of corporate planning and marketing services. He recently retired after a year career with General Foods, where he was vice president, marketing staffs. Partner Center.
By QuickBooks Canada Team. When it comes to promoting your product there are many strategies that you can put into place to get your product in front of your customers. There are two main strategies, push and pull, that will help you sell your product. Depending on the infrastructure and type of small business you own, each strategy has its benefits. A push promotional strategy, is a marketing strategy that sees companies take its products to its consumers. These are the most common push promotion strategies used today:.
Companies, both B2B and B2C, engage in a range of marketing strategies to get their message and product to customers. One way these strategies are categorized are as Push and Pull or Outbound and Inbound marketing. Simply put, a push strategy is to push a product at a customer, while a pull strategy pulls a customer towards a product. Push strategy is a quick way to move a customer from awareness to purchase, while pull strategy is about creating an ongoing relationship with the brand. Both serve a purpose in moving the customer along the journey from awareness to purchase, however pull strategies tend to be more successful at building brand ambassadors. While some companies decide to adopt one or the other it is important to find a complementary balance between the two. Choosing your marketing strategy and tactics should be done carefully and with a thorough understanding of your business, current brand awareness, and target audience.
There was a time, about 40 years ago, when manufacturers of packaged goods themselves determined the marketing strategies behind their products. Making use of the power of their brands, these companies—producers of food, tobacco, beverages, toiletries, and health and beauty aids—sought to motivate consumers to buy their products through the then-passive trade distribution system. This […]. The price premiums these franchises permitted yielded the funds necessary to maintain large advertising and promotion budgets as well as sizable product development budgets. They were considered the most sophisticated of the bunch, largely because they seemingly controlled their own destinies.
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The two promotional strategy which is applied to get the product to the target market is Push and Pull Strategy. The two types of strategies differ, in the way consumers are approached. The term is derived from logistics and supply chain management, however, their use in marketing is not less.
The primary difference between push and pull marketing lies in how consumers are approached. In push marketing, the idea is to promote products by pushing them onto people. For push marketing, consider sales displays at your grocery store or a shelf of discounted products. On the other hand, in pull marketing, the idea is to establish a loyal following and draw consumers to the products. Push marketing takes the product to the consumer, whereas pull marketing brings the consumer to the product. Push marketing is a promotional strategy where businesses attempt to take their products to the customers.
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