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Copy of Push and Pull Strategy

ITC Class Sir Paragas IR 457

Ishan Sharma

on 18 April 2013

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Transcript of Copy of Push and Pull Strategy

Another meaning of the push strategy in marketing can be found in the communication between seller and buyer. A “push” promotional strategy makes use of a company's sales force and trade promotion activities to create consumer demand for a product. A “pull” selling strategy is one that requires high spending on advertising and consumer promotion to build up consumer demand for a product. In a marketing "pull" system, the consumer requests the product and "pulls" it through the delivery channel. PULL Push PUSH STRATEGY
(Personal Selling) VS PULL STRATEGY
(Mass Media)
Push marketing, as it applies in the legal industry, would be TV commercials and billboards that appear claiming to defeat your DUI or recover money for an injury.
Corporate firms also use push marketing with large advertisements in public areas, such as airport terminals. On the internet, Push marketing can be found in banner ads and “Sponsored Links,” which exist in major search engines. Marketing falls into two traditional categories: Push & Pull.
Pull marketing is when the customer voluntarily pulls themselves to your business. They come to you because you offer the credible information they desire. The business terms push and pull originated in logistic and supply chain management, but are also widely used in marketing.
Wal-Mart is an example of a company that uses the push vs. pull strategy. A push–pull system in business describes the movement of a product or information between two subjects. On markets the consumers usually "pull" the goods or information they demand for their needs, while suppliers "pushes" them toward the consumers. Push production is based on forecast demand and pull production is based on actual or consumed demand. The interface between these stages is called the push–pull boundary or decoupling point. "Push or Pull"? Marketing theory distinguishes between two main kinds of promotional strategy - "push" and "pull". The image shows a technology push, mainly driven by internal research and development activities and market pull, driven by external market forces.

The producer promotes the product to wholesalers, the wholesalers promote it to retailers, and the retailers promote it to consumers. A good example of "push" selling is mobile phones, where the major handset manufacturers such as Nokia promote their products via retailers such as Carphone Warehouse. Personal selling and trade promotions are often the most effective promotional tools for companies such as Nokia - for example offering subsidies on the handsets to encourage retailers to sell higher volumes. A "push" strategy tries to sell directly to the consumer, bypassing other distribution channels (e.g. selling insurance or holidays directly). With this type of strategy, consumer promotions and advertising are the most likely promotional tools. Depending on the medium used, the communication can be either interactive or non-interactive. For example, if the seller makes his promotion by television or radio, it's not possible for the buyer to interact with. On the other hand, if the communication is made by phone or internet, the buyer has possibilities to interact with the seller.
In the first case information is just "pushed" toward the buyer, while in the second case it is possible for the buyer to demand the needed information according to their requirements: • Applied to that portion of the supply chain where demand uncertainty is relatively small • Production and distribution decisions are based on long term forecasts • Based on past orders received from retailer's warehouse (may lead to Bullwhip effect) • Inability to meet changing demand patterns • Large and variable production batches • Unacceptable service levels • Excessive inventories due to the need for large safety stocks • Less expenditure on advertising than pull strategy If the strategy is successful, consumers will ask their retailers for the product, the retailers will ask the wholesalers, and the wholesalers will ask the producers. An example of this is the car manufacturing company Ford Australia. Ford Australia only produces cars when they have been ordered by the customers. •Applied to that portion of the supply chain where demand uncertainty is high
•Production and distribution are demand driven
•No inventory, response to specific orders
•Point of sale (POS) data comes in handy when shared with supply chain partners
•Decrease in lead time
•Difficult to implement

Why Pull instead of Push? What every business needs to know about pull marketing: Most businesses rely on marketing to help attract new leads and sales. Yet, too many companies continue to depend on traditional ‘push’ marketing approaches to achieve this. The benefits of pull marketing mean that there are some important things that every business-owner should know: 1.Pull marketing allows you to draw in leads and business with less effort, and at a lower cost than traditional marketing approaches.
2.Pull marketing changes the emphasis of marketing activities from a continuous drive to a more compelling draw for your potential customers
3.Pull marketing is increasing in value thanks to the rise of the internet, search marketing and social media. More and more people are using the web and social networking to make decisions about the products or services they want to buy. Pull marketing directly taps into this.
4.Pull marketing also taps into the growing number of social media communities by maximising your impact via online ‘word of mouth’.
5.Pull marketing done effectively makes it easier to attract prospects and convert them into customers.
Push Pull marketing Future Many media and music futurists have observed large changes within the music industry and predict larger ones to come. The introduction and success of social networking, along with the rise of digital music, has transformed the way music is marketed to the consumer; shifting from a push to pull strategy. The prior push strategy would feature a marketing campaign in total control of the message being sent out. The newer pull strategy has been viewed as a shift in power from advertisers to consumers, and so requires a more adaptive approach by marketers. With the increase of social networking platforms and users, social networking has become a major and focal part to music marketing adopting the pull marketing strategy. Pull marketing shifts the emphasis and attention onto the customer, trying to market in the correct places by knowing who the target audience is. Consumers are increasingly customizing to better suit their individual needs. Rather than relying on music companies or a DJ to pre-determine the mix of songs on a CD, an increasing number of music listeners are downloading individual tracks and assembling their own sequence of songs. This process is also being replicated with the creation of playlists through platforms such as iTunes, Spotifyand Last FM. Fan-built playlists and mixes are taking over the way people get their music. Playlists are inevitably becoming a pull marketing resource that marketing alliances must embrace, due to their ability to be shared via Peer to peer networks. People are choosing what they want to hear rather than having it pushed on them. As consumers gain access to a greater number of options and platforms, and more information about such services, the consumer will probably become more demanding on resource providers, requiring services to be made available on consumers terms, rather than when it is convenient for the resource providers to deliver them. In addition, consumers are demanding the ability to configure their own products from resource providers, leading to rapid growth in options and music services. To thrive in a broad market, digital music services attempt different models and features to find the optimum mix and ensure consumer satisfaction. Prepared By:
Navarro, Maria Angelica M.
Beroy, Marianne F.
Tatoy, Charmaine
Gonzalez, Maria Antonia
Biboso, Celso
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