In marketing, a push promotional strategy is a method of achieving sales that is driven largely by “taking” products to people through retailers or wholesalers. Manufacturers such as Nokia will offer discounts or subsidies on their products to retailers like Best Buy and Target, who then have an incentive to sell those products. When a seller contacts the buyer through any sort of promotional material or cold call, this is a push strategy.
On the other side is a pull strategy in which the buyers initiate contact with the sellers. This is often viewed as a more effective strategy because it relates directly to the real demand for your product. If a customer walks into a store and asks a sales person about your product, that customer is creating a pull on the supply chain from the retailer to the wholesaler or manufacturer. This requires strong advertising campaigns that get the word out about your product.
One example of a pull strategy was the Tickle-Me-Elmo craze that swept the country during the Christmas of 1996. Tyco was probably not planning on creating the buzz that their plush product generated, but they welcomed it. By advertising through television and print ads, the company was able to generate massive sales. Some reports indicated that the toy sold for as much as $1500.
Attaining the right balance of push and pull in your promotional strategies can be tough and while some argue that a ratio of 20 percent push to 80 percent pull will be the most effective, it is hard to justify a one-size fits all strategy.
Generally, you should consider a push strategy when:
- Consumers need to be educated about a product or brand’s finer points. A new organic soup company might want to use a push strategy so they can educated customers on why their organic soup is better than non-organic and organic competitors.
- The market is price-sensitive.
- You’re going up against a large company with a much higher marketing budget
- You’re looking to encourage customers to try your product on a trial basis in order to build product or brand loyalty.
Pull strategies are best utilized when:
- Customers have strong brand loyalty
- The product you are selling is easily set apart from competing products. Apple’s iPod is an example of this because of the way it easily fits into the Mac “ecosystem.”
- The marketing budget is large enough to finance a big advertising and marketing campaign.
Push and pull strategies can be very effective when properly utilized and when the conditions are right, but it is crucial to get the mix or push and pull right. It doesn’t matter what your company is selling, if the push outweighs the pull (restated: if the supply outweighs the demand) you’ll be wasting money on advertising and will probably end up with excess inventory.