PUSH and PULL© SOFT Student Handouts,

By, Sunil Talekar, Faculty, SOFT-Pune

What is Push?In push marketing, a company tries to push its products through the distribution channel. It advertises to intermediaries, such as wholesalers and retailers, who then try to generate demand from end users. Sometimes, companies may push information and promotional material directly to end users through email or fliers to generate demand

a

All private labels send mobile SMS for

any new offer and discount.

bPush marketing

reaches potential customers directly.

cA company could create an email

database of potential customers and send them product announcements

and promotions directly

Supermarkets often employ push promotional tactics by giving away samples of new products.

What is Pull?In pull marketing, the company tries to draw in customers through different kinds of advertising, such as TV ads, online banner ads and social media. Some companies use both push and pull marketing to generate demand.

a

A more creative pull marketing strategy might be to advertise in social media

literary forums and build online communities around

authors.

c

A company could create an email database of potential customers and send them

product announcements and promotions directly

b

Grocery stores often advertise leader items in the

weekend fliers to attract customers hoping that they would then buy some of the

higher-priced items.

d Online banner ads, and radio and TV ads are other forms of pull marketing.

Push BasicsPush marketing is so-named because suppliers effectively try to push their products through the distribution channel by inducing their buyers to purchase them for resale. Trade buyers generally want to buy at a low price, add a markup and resell to their buyers to earn a profit. When a manufacturer offers a wholesaler a sales promotion or a volume discount, it enables the wholesaler to earn a higher profit margin if it can resell effectively to retailers. Wholesalers can then offer similar inducements to retailers to give them profit advantages.

Pull BasicsPull marketing is so-named because marketers try to stimulate demand at the end customer level by promoting the benefits or value of products to consumers. This includes brand building advertising as well as consumer sales promotions that given consumers a better price for the same benefits. The premise is that if end customers demand products in the marketing place, all businesses in the distribution channel benefit because of strong demand and likely higher price points.

Push and pull marketing both rely on conveying benefits to customers.

Using Push and PullA company may use both push and pull marketing to drive sales growth. 1. A major commercial insurance company, uses

push marketing to create awareness in a new or existing product, and then targets banner ads to pull in customers when they search online for more information on the product. 2.

2. A pizza restaurant may use newspaper ads to pull in customers and fliers to push information about its menus directly into customer mailboxes.

What is pull marketing? Pull marketing is where you develop advertising and promotional strategies that are meant to entice the prospect to buy your product or service. Some classic examples are "half off!" or "bring in this coupon to save 25%" or "buy one get one free", etc.With pull marketing, you are trying to create a sense of increased, time limited value so that the customer will come into your store to buy.

What is push marketing? Push marketing is where you develop advertising and promotional strategies geared toward your marketing and distribution channels to entice them in promoting your product. As consumers, you rarely see this type of marketing when it is directed to the distributors. It might include wholesale discounts, kickbacks, bonuses, and other types of support. It's all designed to have the retailer promote your product to the end users over a different product.When companies encourage happy customers to spread the word to their friends and families, that's a type of push marketing. Or, when companies make ads that are controversial, cheeky, or downright shocking, they create a little buzz - that's another type of push marketing.

Advertising as Both Push and Pull

Retailers and manufacturers sometimes cooperate in joint advertising campaigns, utilizing both push and pull strategies. A manufacturer may push a new product, for example, along with a retailer by both agreeing to pay for TV and print ads promoting the new product as

Advertising can be viewed as both a push and a pull retailer strategy. Ads attempt to pull the customer into the store, ideally asking by name for the very products that appeared on TV or in newspaper ads.

But the technique also pushes a manufacturer's products directly to consumers. In addition, TV commercials that create buzz --- annual Super Bowl ads are a good example --- often provide good word-of-mouth push advertising while simultaneously creating a pull-advertising effect on recipients of such second-hand renditions. Retailers utilizing a push-pull strategy must divide their efforts and money between promotions and end-user advertising, according to "Marketing Help!"

"available at Retailer X now."

Difference Between Promotional Push Strategies & Promotional Pull Strategies?

Push versus pull are two prominent marketing strategies used by companies to market their products.

Pull marketing means marketing to end customers to create demand, while push marketing means enticing trade buyers to purchase and carry your product by offering promotions and price inducements that give them better profit potential.

Distribution Process

To understand the implications of push and pull marketing you need familiarity with the distribution or trade channel. This is the systematic process products typically go through as they flow from initial product and development at the manufacturing level to final purchase at the consumer level. Along the way, distributors traditionally buy products from manufacturers and resell them to retailers. Retailers then hold products in inventory and offer them for sale to the end customer.

1. A pull strategy has the communication directed at the end users — primarily consumers.2. a pull strategy directs promotion at the end consumer3. most consumer products would rely more heavily on a pull strategy where promotion is directed at the consumer to stimulate demand

1. A push strategy is directing the communication primarily at the middlemen that are the next link forward in the producer’s distribution channel.2. a push strategy directs communication efforts at channel members3. many products, such as business products, are promoted with a push strategy, involving personal selling and use of trade promotions

PUSH STRATEGY

PULL STRATEGY

Push and Pull Manufacturing

Push type" means make to Stock in which the production is not based on actual demand. "Pull type" means make to Order in which the production is based on actual demand. In supply chain management, it is important to carry out processes halfway between push type and pull type or by a combination of push type and pull type.

Push manufacturing

Pull manufacturing

Pull type production or Make to order

MTO (Make to Order) is a manufacturing process in which manufacturing starts only after a customer's order is received. Forms of MTO vary, for example, an assembly process starts when demand actually occurs or manufacturing starts with development planning.

Manufacturing after receiving customer's orders means to start a pull-type supply chain operation because manufacturing is performed when demand is confirmed, i.e. being pulled by demand. The opposite business model is to manufacture products for stock MTS (Make to Stock), which is push-type production. There are also BTO (Build to Order) and ATO (Assemble To Order) in which assembly starts according to demand.

Assembling after receiving a customer's orders is "ATO (Assemble To Order)" and starting with development designing is "ETO (Engineer To Order)". Construction by general contractors and plant construction by engineering companies are categorized as ETO.

From the viewpoint of supply chain management, it has been proven that those who can satisfy due dates promised with customers and can shorten lead times will have an competitive advantage. Even if the production quantity increases, if push-type products that are manufactured by MTS can be manufactured by pull-type production such as MTO and ATO models using SCM software or information technology, then there will be greater business opportunities.

ATO (Assemble to Order) of computers by Dell Inc. and production of sports bicycle by National Bicycle Industrial Co., Ltd. are examples of creating a new business model by matching the diversification of products with ATO, BTO, ETO, and with new-style marketing.National Bicycle Industrial Co., Ltd. says"We can deliver a custom-made bicycle to you within two weeks."Solectron Corporation says"We can assemble the computer you requested and deliver it within a week."These are examples of business models in which new supply chain models are created as marketing models.

Pull type production or Make to orderPull-type production, such as MTO, BTO, ATO, and ETO, is a business model of the assembly industry in which the quantity to produce per product specification is one or only a few. For example, construction, plant construction, aircraft, vessels, bridges, and so on.

Make to Stock: In MTS (Make to Stock); products are manufactured based on demand forecasts. Since accuracy of the forecasts will prevent excess inventory and opportunity loss due to stock out, the issue here is how to forecast demands accurately.

MTS (Make to Stock) literally means to manufacture products for stock based on demand forecasts, which can be regarded as push-type production. MTS has been required to prevent opportunity loss due to stockout and minimize excess inventory using accurate forecasts. In the industrialized society of mass production and mass marketing, this forecast mass production urged standardization and efficient business management such as cost reduction.

Manufacturer Wholesaler Retailer Consumer

Producer Wholesaler Retailer Consumer

PUSH STRATEGY

PULL STRATEGY

Product flow Communication effort

An Illustration

Push versus pull promotion strategy

ProducerProducer Retailer &

wholesalers

Retailer &wholesalers ConsumersConsumers

ProducerProducer Retailer &wholesalers

Retailer &wholesalers ConsumersConsumers

Producermarketingactivities

Resellermarketingactivities

DemandDemand

Producer marketing activities

Push strategy

Pull strategy

THANK

YOU !!!