The concepts ‘push’ and ‘pull’ Free Essay

Push and Pull Policy in Market-Driven Management

It is useful to characterize two concepts of marketing strategy – a push-strategy and a pull-strategy. The main difference between the two is the role of the reseller. In the push strategy, the reseller plays a very active role, in a pull strategy, its role is rather passive. In a pull strategy, the manufacturer assumes the main responsibility for creating demand at the level of end customers through promotional activities and personal sales aimed directly at the end customer. In the push strategy, personal sales are used to stimulate demand at all levels of the marketing channel – from the manufacturer to the reseller and from the reseller to the final customer, among which there may be several levels of resellers. In a push strategy, a reseller is responsible for creating demand, and in a pull strategy, it is responsible for serving demand. Before continuing to examine the differences between push and pull strategies, it should be noted that this is usually not a complete opposition to each other, but rather some preference for either a push strategy or a pull strategy (Smith & Petersen, 2011). A typical manufacturer’s marketing strategy includes elements of both approaches.

Need Help Writing an Essay?

Tell us about your assignment and we will find the best writer for your paper.

Write My Essay For Me

The features of these two concepts can explain the choice of individuals to become self-employed and start up a business. For example, pull method assumes that “The buyer comes for the product.” New businesses (start-ups) do their business mostly in this way. Pull promotion methods work well for products that are in the early stages of the life cycle when opportunities for learning needs and segmentation of consumers are limited and difficult. Pull includes marketing communications that are aimed at a wide audience. In such communication, the company-manufacturer of goods or services focuses on the features, advantages and distinctive properties of its products in comparison with competitors (Corniani, 2008). In the expectation that due to the wide coverage, marketing communication will capture those consumers who are especially interested in the product properties described in the communication, and these consumers will declare their interest in the product themselves and find an opportunity to purchase it. In the push strategy, all elements of the marketing mix should be adjusted so that the emphasis is placed on the active role of the resellers. Prices and margins should be adequate for resellers to play this role. The promotional mix, which includes promotional activities, personal sales, and the development of a compensation program for sales staff, should be structured to reflect the important role of resellers and the need to support them. Push strategies are usually accompanied by selective distribution. A characteristic feature of pull-out strategies is intensive distribution. In a pull strategy, advertising and sales promotion measures often dominate the marketing communications budget, and in a push strategy, one of the main means of product promotion is personal selling (Sarbjit, 2017). In a push strategy, a reseller may be responsible for customizing the product so that the latter meets the requirements of individual customers. With the help of a pull strategy, the finished product is usually promoted, without modifications. Push-strategies are most actively used in industrial markets, and the consumer sector, as a rule, is a “battlefield” for competing pull-strategies.

In order to understand the factors that influence the decisions of self-employed individuals, it is reasonable to consider the advantages and disadvantages of these concepts with the case examples. Strategy push occurs through a developed network of intermediaries (Ndung’U, 2018). Naturally, no one bothers you to sell yourself, but the main sales go through various agents, intermediaries, representatives. The task of intermediaries is to provide start-up business with a stream of clients. Your task is to manage them. In which cases it is better to use: your product is massive and does not imply deep casting and other “individual approach”. For example, you have a very useful browser plugin or a script that performs a specific narrow task. The best example here can be a business organization in McDonald’s: a standard menu, and if you want a hamburger without a chop and mustard, go to a restaurant. Start-up individual is a new person in the market. In this case, you can “lend” the reputation of the intermediary, because It is he who bears the main risks to the end customer. The main thing is to do your part well and the untwisted intermediary brand will take care of the rest. You are not going to stay in this market segment for a long time and the release of this product is temporary. For example, you have written a program that can collect statistics on matches for the FIFA World Cup. This program will be relevant only during the championship, but you need to sell it quickly and as many copies as possible. You do not have time to build your own network of sales sites. The reputation of a middleman is nice, but nobody frees you from having to advertise your own product. In this case, the money spent on advertising and promotion, partly “eaten” by the intermediary. By advertising your product, you advertise and broker. Agree that after seeing the advertisement of Windows 7, you will go to the nearest store selling software, rather than go to a thread in the central Microsoft store where is the thread in the US. Having transferred the main sales to intermediaries, you are in no way exempt from the costs associated with sales. We are talking about a developed system of discounts for intermediaries, various contests, loyalty programs, providing them with various promotional materials, seller training, etc (Nicholas, 2018). At the same time, nothing keeps the intermediary from breaking the contract. With this strategy, it is quite difficult to control and predict sales. You find yourself in a certain dependence on agents who always pursue their own interests, and God forbid that they always coincide with yours. Do not forget that breaking a contract with a key agent can almost completely block the flow of new customers.

Strategy pull (attraction) ensures maximum customer loyalty. The cases when it is better to apply: in the business “serious and for a long time.” The individual is going to release a lot of services and software products under own brand. Google’s services would be a perfect example. Now everyone knows that if Google came up with something, then it is worth at least a look. When you have a certain amount of time during which you can suffer losses due to weak customer activity. The product is unique, exclusive and VIP. New business is going to position the product as an element of prestige and service for the elite. In this case, it is desirable to sell yourself, because “elite customers don’t go to the supermarket for elite cucumbers”. As an example, it is reasonable to cite a comprehensive service for creating an online store for a particular manufacturer’s thread, starting with the development of a unique engine, its filling, promotion and holding top positions for the right keywords. When you want to attract foreign investment to business. Investors are investing money in a firm, and not in a finished product that is sold on the counters of intermediaries. Any investor understands that no matter how cool the product is, its money will burn if the company goes bankrupt due to stupid management. When you want to get a more effective capitalization of advertising costs. The individuals have invested money in advertising, the price of their brand has risen, they have made a premium on the product and began to “return” the money spent without affecting the turnover. Well, do not forget about more effective sales control and a more stable return on investment in sales. It is better to do/train and promote the own sales platform than to do the same indirectly for the agent. As a disadvantage, the implementation of such a strategy requires a lot of financial and time costs, which not everyone can afford. Usually, minor projects of large corporations or those who have a solid “financial stratum” can afford such luxury. For example, you can take Google services, which for the most part can afford to remain unprofitable for a long time due to the huge profits from the systems for the sale of contextual advertising. Your business is highly dependent on your own reputation. Here you need to understand that at stake is the prestige of your company, investment in which may exceed the value of the company itself. At the end of this consideration, it is reasonable to note that the ideal option is always to find the perfect combination of these strategies, because individually, their use is rarely justified (“Combining push and pull strategies for greater scale and poverty outreach”, 2014). Your task is to clearly assess your capabilities and distribute your efforts in such a way as to keep sales at a sufficient level while minimizing the impact of the disadvantages of both ways of promoting your product.

In explaining the factors that influence the decisions of individuals to become self-employed and/or start up a business, it is worth to underline the features of concepts and the cases, when it is reasonable to apply them, especially for new business.

Push assumes the signs that differentiate from competitors. In this case, the signs do not affect the actual needs and values ​​of customers, often impose them (Kelley, 2012). The main disadvantage is most likely not the possibility of promoting advertising budgets without strong resources. The advantage of this approach is the low level of research intensity. The possibility of starting a company without detailed analyzes, environmental assessments, segmentation, and so on. The brand is positioned only during the advertising campaign. This strategy is best applied in the following cases: the product is designed for the mass market and does not require a detailed study of the market; the product is not going to stay in any particular market segment for a long time and the production of the product is temporary.

Pull assumes creation of brand on the basis of actual needs and values ​​of customers, and, entering the market, it finds demand without massive advertising. The brand is positioned when creating a name and visualizing a brand. The main disadvantage of this approach is the high technology intensity. The advantages include the possibility to refuse large advertising costs, the impression of a strong brand close to the consumer, a high sales start. This strategy is best applied in the following cases:

• the product is going to stay in business for a long time and with full “seriousness”;
• when business has time and is ready to wait out some stages of weak consumer activity;
• business wants to attract foreign investment, it is known that investors are investing in a strong and stable, stable company, and not in an idiotic product, of which the mass is in stalls and transitions;
• business wants to get a more transparent and efficient capitalization of advertising costs.

In this case, the brand becomes attractive to the consumer, it may have rational or emotional advantages compared with competitors. Rational (functional) means that the benefits of products are meaningful and understandable for the consumer (price, volume, composition, ingredients, convenience, usefulness, action, etc.). For example, it is tea product. Emotional way is based on values, life style of the consumer, image characteristics of the brand, close to the target audience. For example, it is sweet Sneakers.

It is impossible to single out any promotion strategy. There are certain tools and knowledge that allow to take into account and use the complex, combine pull and push, with proper distribution and choice strategies in the “general” can be achieved decent heights, shares, segments, profits. Thanks to the concept of push and pull strategies, an important analytical distinction can be made between the active and passive roles of the reseller serving the manufacturer and the end customer. This makes it possible to understand the changing role of industrial resellers in the marketing strategy and the difference between the industrial and consumer markets.

References

Combining push and pull strategies for greater scale and poverty outreach. (2014). Retrieved from https://www.marketlinks.org/sites/default/files/resource/files/Push_Pull_Track_Synthesis.pdf

Corniani, M. (2008). Push and Pull Policy in Market-Driven Management. Retrieved from https://www.researchgate.net/publication/227600123_Push_and_Pull_Policy_in_Market-Driven_Management

Kelley, B. (2012). Push or Pull Marketing for Innovations?. Retrieved from http://bradenkelley.com/Push-or-Pull-Marketing-for-Innovations.pdf

Ndung’U, K. (2018). Effectiveness of push and pull strategies in sales and marketing. Retrieved from http://erepository.uonbi.ac.ke/bitstream/handle/11295/103224/Kariuki_Effectiveness%20of%20Push%20and%20Pull%20Marketing%20Strategies%20in%20the%20Sales%20and%20Marketing%20of%20Over%20the%20Counter%20Healthcare%20Products%20by%20Large%20Pharmaceutical%20Distributors%20in%20Nairobi.pdf?sequence=1&isAllowed=y

Nicholas, K. (2018). The push and pull of innovation: A start-up case study. Retrieved from http://www.aabri.com/manuscripts/121100.pdf

Sarbjit, S. (2017). Study on Push/ Pull Strategy Decision Taken by Organizations for Their Products and Services. Retrieved from http://www.hrpub.org/download/20171130/UJM4-12110535.pdf

Smith, K., & Petersen, J. (2011). Pull and Push: strengthening demand for innovation in education. Retrieved from http://pahara.org/wp-content/uploads/2012/12/pulll-and-push.pdf