The push strategy is one of the primary models for achieving market penetration and sales goals. This approach involves actively moving the product through established distribution channels to reach the consumer. It relies heavily on trade partners to ensure the product is stocked and promoted at the point of sale, making the intermediary the initial target of the manufacturer’s efforts.
Defining the Push Marketing Strategy
A push marketing strategy focuses promotional efforts and resources on channel members rather than the end consumer. The manufacturer’s primary audience is the wholesaler, distributor, or retailer who will eventually stock and sell the product. The objective is to generate demand from the trade level, persuading intermediaries to carry and display the product prominently. Success is measured by the readiness of the trade to invest inventory and shelf space, effectively pushing the product toward the eventual buyer.
Mechanics of a Push Strategy
The success of a push strategy depends on a coordinated effort across all tiers of the supply chain. The process begins with the manufacturer directing promotional resources toward wholesalers, encouraging large initial orders. Wholesalers then utilize their own sales forces and trade programs to convince retailers to purchase and stock the product. This transfer of goods and promotional support creates a cascading effect, motivating each intermediary to move the product to the next stage. The retailer ultimately places the product on the shelf and uses in-store promotions to influence the consumer’s purchase decision.
Key Tactics Used to Drive Push Strategies
Manufacturers utilize several key tactics to incentivize intermediaries and ensure product movement through the channel:
Trade Allowances: These are direct price reductions or temporary discounts offered to the retailer based on purchases during a specific period, encouraging them to buy larger quantities.
Point-of-Sale Displays and Merchandising Support: Manufacturers provide retailers with materials designed to increase product visibility at the final purchase location, such as specialized shelving, signage, and product literature.
Co-operative Advertising: This involves the manufacturer sharing the cost of advertising with the retailer or distributor, often paying a percentage of local expenditures provided the ad features the manufacturer’s product.
Sales Incentives and Contests: Direct incentives are used to motivate the sales personnel employed by wholesalers and retailers, bypassing management to encourage frontline employees to recommend the item to consumers.
Advantages and Disadvantages of the Push Approach
One primary advantage of the push strategy is its ability to secure immediate distribution and shelf space, which is effective for new product launches. It grants the manufacturer greater influence over the presentation and placement of the product at the point of sale. This approach also results in faster sales cycles, as the product is already available when broader consumer promotion begins. A significant drawback is the high financial investment required upfront to fund trade allowances and incentives. The manufacturer’s success is heavily dependent on the motivation and cooperation of the channel members, who may prioritize their own private-label brands.
When to Employ a Push Strategy
Companies often employ a push strategy when launching a new product that lacks established consumer awareness or brand recognition. Since consumers are not yet asking for the item, the manufacturer must ensure its physical presence in stores to initiate trial and sales. This method is beneficial for products that require in-person explanation or demonstration by knowledgeable retail staff, such as complex electronics or specialized tools. When the goal is to achieve rapid, widespread distribution across a large geographical area, pushing inventory into the channel is the most efficient method.
Push Strategy Versus Pull Strategy
The push strategy is best understood in contrast to its counterpart, the pull strategy, which operates in the reverse direction. A pull strategy focuses promotional spending directly on the end consumer through tools like mass media advertising and social media campaigns. The goal is to generate high consumer demand so that retailers and wholesalers are compelled to stock the product to satisfy customer requests. The consumer effectively demands the product from the retailer, who in turn demands it from the wholesaler, thereby pulling the product through the channel. Many companies employ a blend of the two, using trade incentives to establish initial distribution and consumer advertising to maintain ongoing demand.