Winter 2007: by Brent Banda

Push vs. Pull Marketing

Children's toys are fantastic examples of how consumer demand can dictate what products a retailer will stock and sell. Every year there is at least one "Must Have" toy to purchase because of heavy advertising by manufacturers, directed at end users.

For example, in 1996 the unexpected popularity and short-term product supply of Tyco's Tickle Me Elmo toy forced retailers (and consumers who resold the product) to increase prices drastically from the original retail price of $28.99 USD to a few hundred dollars.

Determining which strategy to use will depend on your situation and what you are trying to achieve.

Some reports suggest that the toy fetched as much as $1,500 USD. Although Tyco's success was an extreme case in which Pull Marketing was used, most companies look at incorporating both Push and Pull marketing to build a sustainable marketing strategy.

When to Use Pull Marketing
Pull Marketing creates a situation in which consumers knowingly request a branded product and "pull" it through the distribution channel. For this strategy to work, manufacturers must build consumer demand through heavy (and often expensive) advertising and promotional campaigns.

A Pull strategy could arguably be more effective than a Push strategy because it is easier to sell to a consumer who has a strong positive view of the product. However, creating this positive impression often requires a high amount of exposure over a long period of time.

Often manufacturers look to use mediums such as:

• Mass advertising
• Word of mouth or buzz marketing
• Image advertising
• In-store advertising, sampling, demonstrations
• Viral marketing (getting decision makers and influencers to become advocates)

Although this sounds easy, it often takes considerable time and resources to build awareness for a product to the point where it is identifiable by consumers. Often manufacturers will look at incorporating a pull strategy when:

• Consumers want to purchase the product because of a strong affiliation to the brand.
• They have created a product that is easily differentiated and identifiable from competitor products.
• They have adequate funds to support a large advertising campaign.

When to Use Push Marketing
Push Marketing sounds much more aggressive than it actually is. It creates a situation within the retail environment where the manufacturer and the retailer work together to promote one specific product model or entire product line.

This strategy makes use of a company's sales force, trade promotion activities, and promotional relationships to create consumer demand for a product (i.e. sales incentives/spiffs, coupons or discounts, and heavy product training for retail staff).

With a Push strategy, the producer (1) promotes the product to wholesalers, the wholesalers to the retailers, and the retailers to the consumers, and (2) sets production levels based on the wholesalers and/or retailers' historical ordering patterns and product sales, and forecasted demand. Often it takes time for push-based supply to respond to changes in demand, as they are basing their inventory on historical data.

Often manufacturers look at incorporating a push strategy into their overall marketing efforts when:

• Consumers do not know their product's brand, benefits or how to use it and therefore need to be educated;
• Consumers are price sensitive;
• They are competing with an industry leader that has a large marketing budget; or when
• Their goal is to inspire trial with the hope of building long-term product loyalty.

Each Situation Is Unique...
Determining which strategy to use will depend on your situation and what you are trying to achieve. For instance, are you faced with the short-term challenge of moving a large amount of product quickly, or a long-term challenge of building sustainable demand and market share?

Push strategies are used to aggressively sell a product in the short term, and Pull strategies are used to build strong long-term consumer demand. However, businesses use a combination of both.

> Back to Latest Ideas & Research