Push–pull strategy
From Wikipedia, the free encyclopedia
The business terms push and pull originated in the logistic and supply chain management[2], but are also widely used in marketing.[3][4]
A push-pull-system in business describes the move of a product or information between two subjects. On markets the consumers usually "pulls" the goods or information they demand for their needs, while the offerers or suppliers "pushes" them toward the consumers. In logistic chains or supply chains the stages are operating normally both in push- and pull-manner.[5] The interface between push-based stages and pull-based stages are called push-pull boundary or decoupling point.[5]
Contents |
[edit] Marketing
[edit] Push strategy
A push strategy in marketing is used when there has been a development or improvement on a new product which is unknown to the consumer. As there is no consumer demand in the product launch, the product and the information are "pushed" to the consumer by distribution and promotion. An example of this is a perfume product. Women do not request to smell a fragrance they never smelled before; it is simply "pushed" to them, through the advertisement. Due to the information asymmetry the producer tries by signalling to reduce the information gap between the consumer and the product. This is reached by promotion or other services like personal dialog.
Another meaning of the push strategy in marketing can be found in the communication between seller and buyer. In dependence of the used medium, 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 are just "pushed" toward the buyer, while in the second case it is possible for the buyer to demand the needed information according to his requirements.
- Applied to that portion of the supply chain where demand uncertainty is relatively small
- Production & 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
[edit] Pull strategy
In a "pull" system the consumer requests the product and "pulls" it through the delivery channel. 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
[edit] Supply chains
With a push-based supply chain, products are pushed through the channel, from the production side up to the retailer. The manufacturer sets production at a level in accord with historical ordering patterns from retailers. It takes longer for a push-based supply chain to respond to changes in demand, which can result in overstocking or bottlenecks and delays (the bullwhip effect), unacceptable service levels and product obsolescence.
In a pull-based supply chain, procurement, production and distribution are demand driven so that they are coordinated with actual customer orders, rather than forecast demand.
A supply chain is almost always a combination of both push and pull, where the interface between the push-based stages and the pull-based stages is known as the push–pull boundary.[5] An example of this would be Dell's build to order supply chain. Inventory levels of individual components are determined by forecasting general demand, but final assembly is in response to a specific customer request. The push-pull boundary would then be at the beginning of the assembly line.
[edit] Push Pull Music Marking Future
Many media and music futurists are speculating upon the change within the industry. The introduction and success of social networking along with digital music has transformed and reshaped the way music is marketed to the consumer; shifting from a push to pull strategy. In media and advertising everything is switching to pull. Push Marketing is on its way out. There is an imminent difference between the consumer receiving information from a push strategy and a pull strategy. Push example; passive, the marketing campaign is in control of the message being sent out and how it is received by potential customers. Pull example; active, the recipient of the marketing campaign is in control of the message and their decision weather to act or not. Generally the shift from push to pull has been viewed as a shift in power to the consumer away from advertisers and so is bad news for marketers.
With the increase of social networking platforms and users, with emphasis to Facebook, social networking has become a major and focal part to music marketing adopting the pull marketing strategy. Pull marketing shifts them emphasis and attention onto the customer, the essential attribute is to market in the correct places and knowing where and who your target audience are. Get people’s attention by providing value and earn their love by engaging with them. This will naturally lead to increased website traffic and increased sales.
Consumers are increasingly customizing music platforms 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, Spotify and 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 share via Peer to Peer networks. People are choosing what they want to hear rather than having it pushed on them.
I conclude as consumers gain access to a greater number of options/platforms and more information about such services, the consumer will become more demanding on resource providers. Requiring services to be made available on consumers terms, when and where they want them, rather than when and where it is convenient for the resource providers to deliver them. In addition, as mentioned above consumers are demanding the ability to configure their own products from resource providers, leading to rapid growth in options and music services. Inevitably shifting music marketing from push to pull. As digital music services try out different models and features to try and find the optimum mix and consumer satisfaction.
[edit] See also
[edit] References
- ^ Martin, Michael J.C. (1994). Managing Innovation and Entrepreneurship in Technology-based Firms. Wiley-IEEE. p. 44. ISBN 0471572195. http://books.google.com/books?id=fnE7R732COMC&printsec=frontcover#PPA44,M1.
- ^ Edward G. Hinkelman & Sibylla Putzi (2005). Dictionary of International Trade - Handbook of the Global Trade Community. World Trade Press. ISBN 1885073720. http://books.google.com/books?id=vylCkqTg7H0C&printsec=frontcover#PPA144,M1.
- ^ Peter, J. Paul; James H. Donnelly (2002). A Preface to Marketing Management. McGraw-Hill Professional. p. 132. ISBN 0072466588. http://books.google.com/books?id=KhQjP6KZ9GQC&printsec=frontcover#PPA132,M1.
- ^ Dowling, Grahame Robert (2004). The Art and Science of Marketing. Oxford University Press. p. 266. ISBN 0199269610. http://books.google.com/books?id=DFduJaZ41MUC&printsec=frontcover#PPA266,M1.
- ^ a b c Terry P. Harrison, Hau L. Lee and John J. Neale (2003). The Practice of Supply Chain Management. Springer. ISBN 0387240993. http://books.google.com/books?id=xT8_GAaVl4YC&printsec=frontcover#PPA17,M1.
