What are the pull and push strategies?

Answer 1

A push strategy in marketing is used when there has been developed or improved 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 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 Ref: Wikipedia