Push V Pull Strategy

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 movement 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] Push production is based on forecast demand and pull production is based on actual or consumed demand. The interface between these stages is called the push-pull boundary or decoupling point.[5]

[edit] Marketing [edit] Push strategy 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 is 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 less expenditure on advertising than pull strategy [edit] Pull strategy In a marketing "pull" system the consumer requests the product and "pulls" it through the