Push and pull strategy in the FMCG sector
Written by Rachel Ann Kreis ·
The idea behind push and pull strategy originally comes from logistics and supply chain management but has also been widely adopted by marketing departments to define two types of tactics. The stark difference between the two lies in how people from different target audiences are approached. Push marketing is a promotional strategy in which marketers take their products to where target audiences are. Pull marketing is just the opposite — customers look for products that fit their needs and the companies selling them make sure that their products are discoverable. However, for FMCG manufacturers, push and pull strategies vary significantly.
But, what are the differences between push and pull approaches for FMCG companies, and which kinds of marketing departments are responsible for each type? We are going to take you through some examples…
Push tactics in trade marketing
Even though FMCG brands are B2C, there are many different “target audiences” the products must appeal to before ending up in a shopping cart. This is where the intersection of marketing and supply chain management meet, through the art of trade marketing. These professionals are in charge of pushing the brand’s products down the supply chain. Their goal is to attract different segments from their target markets made up of distributors, wholesalers, retailers (and sometimes consumers). With so many actors involved, marketing to each of these supply chain counterparts is quite the complex process. A trade marketer will use push tactics the following ways to promote their products:
- Promotions at trade show events to increase demand from supply chain members
- Negotiations with retailers to stock products in their establishments
- Attending or hosting showrooms as a form of direct selling to consumers
- Packaging design to capture consumers’ attention while passing by the products
- Limited-time display promotions in retail stores to boost sales
Unilever, trade show savvy
Unilever is a world-renowned FMCG manufacturer with approximately 400 brands under its corporate umbrella that are used by more than 2.5 billion people every day. Apart from employing a sustainable business plan that seeks to reduce their carbon footprint with locally sourced products, Unilever pays special attention to their supply chain segments. While participating in the BWG Trade Marketing Show at the Convention Centre Dublin, Unilever made more than €130,000 in overall turnover. However, in order to make those sales, the company also handed out around 1,000 samples to retailers in attendance so they could try their new products before making bulk purchases.
See how Unilever’s trade marketing team creates an inviting experience for their supply chain partners in this video:
Location Intelligence bonus: Push channel strategies can be made more efficient when trade marketers understand how different people in their target markets are scattered within a given area. Geolocation data provides this kind of information which in turn can help FMCG manufacturers sell their products to their supply chain partners more easily. When a trade marketer knows where people are located within their target audiences, this information can be relayed to different segments of the supply chain to support the sale.
Screenshot showing the level of dispersion of women between 20-30 years old in London
Pull tactics in brand marketing
Pull strategies in the fast-moving-consumer-goods sector are all about creating demand for products at the consumer level. When a consumer wants a product, retailers want to have it in stock, and so the demand works its way up the supply chain naturally. These types of strategies require a brand to have a high level of visibility in order for consumers to be aware of the products and want to purchase them. The FMCG’s brand marketing team ensures this happens by launching several different types of initiatives:
- Collaborating with influencers for word-of-mouth referrals
- Advertising and mass media promotional campaigns
- Customer loyalty programmes with exclusive discounts
Philips, marketing the benefits
Another FMCG manufacturer that launches pull strategies to boost consumer demand is Philips. With approximately 74,000 employees working for the corporation, the brand is present in more than countries. This company forms part of the healthcare technology niche and their products are focused on helping customers achieve better outcomes across the well-being continuum. When creating marketing collateral used for pull marketing strategies, their brand marketing team crafts messages that are highly benefit-focused. Once their target audience understands how a certain product will positively impact their lives, they find the retail stores that sell them (or ask why they are not in stock).
Watch how Philip’s brand marketing team creates demand from their consumers by featuring the benefits obtained by their products:
Location Intelligence bonus: Brand marketing teams that rely on geolocated data can identify rises in demand for certain products in specific areas. As many FMCG companies have different items in their portfolios, knowing which products sell better where is an excellent way to launch geomarketing campaigns to capitalise on those opportunities with a targeted pull strategy.
Screenshot of consumer transactionality behaviour for a specific postal code
Location Intelligence, a smart balance of push and pull strategies
For an FMCG manufacturer to become a globally-recognised company, such as Unilever or Philips, there is no denying the need for a balance of push and pull tactics. This fluidity between both push and pull is what helps these brands to reach not only macro levels of production but also macro audiences. Nevertheless, when operating on a macro level, FMCG companies are tasked with managing large amounts of data between all of their different supply chain partners, points of sales, customers, product portfolios, etc. This is what makes it key to find ways to centralise this data and make sense of it all. But what solutions are available on the market to solve the meaningless data challenge of the status quo?
Some FMCG brands are turning their attention towards Location Intelligence because of its ability to compile this kind of macro data (known as big data) and extract value from it. By adding a location component to big data, FMCG marketers can immediately understand the unique market conditions that affect the performance of their products in different areas. It’s no longer enough to act based on previous experience or intuition. Having accurate data that supports those decisions is essential to promote growth. This is where employing big data insights into the creation of push and pull strategies becomes a competitive advantage. Marketers can use this information to craft their campaigns and intelligently connect with both supply chain members and customers through a data-driven approach. With Location Intelligence, it’s easy to capitalise on demand from the top of the supply chain all the way to the final consumer. Because when you know the story behind the numbers, marketing potential is really unlimited.
Would you like to learn how Location Intelligence can help your FMCG company get the most out of big data insights? Ask for a demo and we will be in touch shortly to show you how.