Final exam essay principles of marketing analyzing push and pull strategy the real life xample cocoon

TRƯỜNG ĐẠI HỌC KINH TẾ THÀNH PHỐ HỒ CHÍ MINH TRƯỜNG KINH DOANH KHOA KINH DOANH QUỐC TẾ - MARKETING šš&›› FINAL EXAM ESSAY PRINCIPLES OF MARKETING Analyzing Push and Pull Strategy The

TRƯỜNG ĐẠI HỌC KINH TẾ THÀNH PHỐ HỒ CHÍ MINH

TRƯỜNG KINH DOANH KHOA KINH DOANH QUỐC TẾ - MARKETING

šš&››

FINAL EXAM ESSAY PRINCIPLES OF MARKETING

Analyzing Push and Pull Strategy The Real life xample: Cocoon

Lecturer: TRAN MAI DONG Student: NGUYEN DA TRUC QUYEN

Class: MRC01 – K48 Course code: 22C1MAR50300201 Student ID: 31220122621

TABLE OF CONTENTS

4 The combination of push and pull strategy 8

The rapid rise of technology and the establishment of many enterprises have created a need for managers to set up a clear strategy to run their businesses, especially strategies in Marketing or Logistics and Supply Chain Push and pull strategies are basic promotional strategies that can be used by Marketers to decide how the company approaches consumers Those strategies help a business become more well-known and fosters consumer connections However, push and pull strategies seem to have their own features and oppose each other This paper analyzes the push and pull strategy by giving the definition, pointing out the significant differences between them as well as the advantages and disadvantages Finally, the way Cocoon, a Vietnamese cosmetics company, utilizes the mix of both strategies will be demonstrated

I Push and Pull Strategy

1 Definition

The “push - pull” term in business originated from Logistics and Supply Chain management, however, it is used more widely in Marketing As the meaning of its own, the term describes the way companies approach their consumers “Push” strategy takes the product to consumers, “pull” strategy gets the consumers to the product

In detail, push strategy, also known as push promotional strategy, is the strategy which companies use to “push” their products onto consumers through marketing channels By using some promotion tools such as personal selling or trade promotion, the producer induces

often adopted by new businesses or adopted to acquire immediate results in sales to generate exposure for their products as well as create a retail channel When a new product is launched, businesses also use this strategy to stand out in such a competitive market

Lots of manufacturers use trade discounts to attract wholesalers and retailers to keep their products in stock Some common methods are consignment, partial or 100% payment, etc A skillful team is often founded in the company to help distributors with sales, supervision and local management Besides supporting these channels, the team is also responsible for gathering information about the market, competition or demographic segmentation which are important for companies to have suitable and prompt adjustments in their strategies and plans Regarding wholesalers and retailers, sales promotion, advertising, etc are widely used to induce the final consumers

recently in mono stores in Vietnam instead of launching official Apple stores Those authorized resellers are supported by Apple staff in store layouting, product insurance as well

as trade promotion

The first mono store that only sold Apple products was launched by Shop Dunk, an authorized reseller of Apple

The following mono store was TopZone

by The Gioi Di Dong which follows the

standard of Apple official stores

(Photo: Website of The Gioi Di Dong)

Pull strategy calls for attracting consumers by using lots of tactics such as advertising, sales promotion, digital media, etc A successful pull marketing strategy consists of five key elements: content, transparency, technology, resources, and a continuous improvement cycle Then, the consumers will demand the product from retailers This kind of strategy is usually used by enterprises that have been established for a fixed length of time In other words, companies using pull strategy focus on building long term consumer - manufacturer relationships, building brand loyalty and reaching potential customers

Using media such as newspapers, television, Internet, billboards, etc or word of mouth to advertise the product is a common method to directly induce consumers Another noticeable example of pull strategy is taking the advantage of event days or experience days that producers allow consumers to try out the product By using these tactics, manufacturers are able to increase the demand for purchasing

Shondo, a Vietnamese sandals brand, could be considered as an example of pull strategy The company has used celebrity endorsement to attract customers, especially teenagers Influencers on social media are given free sandals with the aim that they would introduce these sandals to their fans Word of mouth is also their strength since recommendation among students significantly help the business in increasing sales

2 Differences

(Based on: Philip Kotler, P., Armstrong, G., & Opresnik, M O (2017) Principles of Marketing Pearson.)

As mentioned, push and pull strategy could be primarily distinguished by how the producer approaches their consumers Push strategy mainly focuses on marketing through channels while the other involves direction of the final consumer There would be interaction and communication between manufacturer and end consumers in pull strategy but in push strategy, those activities seem to be unnecessary Considering tactics, push strategy primarily uses salesforce, trade promotion, money, etc to attract distributors, to promote and distribute the product to the final customer On the other hand, advertising, promotion and other types

of communication are taken advantage of in pull strategy to induce customers to purchase products from channel partners

Moreover, push promotion strategy would be more prevalent for companies that are new to the market and have not had any sale channels or loyal buyers The other is considered to be suitable for businesses that have established for a fixed length of time and had their own number of consumers Businesses use push strategies to acquire immediate sales and use pull strategies to achieve the goal of increasing customers’ engagement

3 Advantages and disadvantages

3.1 Push Strategy

Using only push strategies could bring about some advantages for companies Firstly, push strategy is considered to be useful for small businesses to establish a sales channel and find distributors for product promotion Secondly, when companies release new products push strategies would help test the product in the market as well as push the product to consumers Alongside that, push techniques are useful for creating product demand as well as increase consumer awareness about the product Other benefits of this kind of promotional strategy can be named are: Suitable for short - term sales and promotional campaigns and deal with inventory before a season is ended

However, there are also some downsides if the business only uses push strategies Firstly, consumer behavior has been changing and they have no longer responded to push strategies Instead of buying a product after reading a salesy message, the consumers’ purchasing process tends to be longer Secondly, this promotional strategy focuses on short-lived purchase behavior so it cannot build a strong relationship between manufacturer and consumers Another downside is that push strategy implementation might require a strongly dedicated sales force with the ability to reach distributors In other words, there could be difficulties in networking effectively with retailers and wholesalers for the company that does not have an experienced sales team, especially start-up companies or small businesses Poor negotiating position occurs when wholesalers and retailers are reluctant to buy the product for resale and it might be a considerable disadvantage since distributors play a crucial role in taking the product to the final consumer In spite of the fact that push techniques require an allowable expense, cost can also be an obstacle when using them since distributors can reduce price reductions with the reason of attracting consumer awareness

3.2 Pull Strategy

By putting concentration on consumers instead of the product, pull strategy can overcome

a range of problems of push strategy First of all, owing to the main concept of pull technique

is consumer advertising through social media networks, word of mouth, promotions, etc., it fulfills the desire of researching and gathering information about the product before making a purchase decision of the consumer The second advantage is that using pull strategy helps businesses access not only active but also inactive consumers Even though the consumer is not ready to buy the product, a relationship with the brand will be developed through social contents or communications Another significant benefit of this kind of promotional strategy

is that it allows enterprises to build long term trust as well as a return customer base and strengthen customer loyalty

Nevertheless, the pull strategy still has a few drawbacks such as an immediate result in sales cannot be seen if the company uses this strategy solely The reason is that it would take

a considerable amount of time for consumers to create such an engagement with the brand

As a consequence, the producer is required to make remarkable attempts in researching as well as building authority

4 The combination of push and pull strategy

After observing the pros and cons of both push and pull strategy when used independently,

it can be concluded that a balance between two techniques would be the key For long-term success, a mix of both push and pull marketing strategies is essential, because some customers react only to one type or the other (Fitz Villafuerte, 2018) In fact, the majority of large companies nowadays combine both, called mix promotion strategy

Based on the benefits and limitations of both and how companies want to approach consumers, they can figure out which type of strategy is more effective A combination of both is still considered as a worthwhile strategy Each plan or campaign of the business needs

to be defined clearly so that suitable strategies can be chosen to implement them Another way to successfully use these strategies is that the producer can initially use push marketing

to create the need or test the new product by the reaction of consumers Once ready, they can use the other to approach the consumer and induce them to buy the product Initially push marketing helps create the demand or need and pull marketing offers a way for users to satisfy that need (Kayla Carmicheal, 2022)

II Example

Cocoon is a Vietnamese vegetarian cosmetics company established in 2014 that provides body, face, hair and lip care products Cocoon's mission has always been to develop affordable, friendly and safe cosmetics that benefit consumers, especially women with healthy skin, hair, and body

The brand follows three main principles: 100% of ingredients that have clear origin and are safe for the user, 100% vegan and 100% of no testing on animals With these principles, Cocoon has not only succeeded in creating a positive perception of a green company in customers’ perspective, but has also assisted in developing a positive environmental value in users

Cocoon offers excellent prospects, however there are still some issues In terms of potential, users are now more likely to live sustainably, giving greater consideration to their health and the environment As a result, the market is quite promising for a vegan cosmetics firm that uses Vietnamese plants like Cocoon However, given that today's beauty care products are not only varied but also relatively simple to be counterfeited, the business still faces a highly competitive environment Therefore, it is clear that the enterprise's goal is to

develop business strategies that raise consumer awareness of its goods, grow the market for sales, get rid of rivals, and enhance product quality Cocoon has used a combination of push and pull strategy extremely efficiently to complete the aforementioned goal

Regarding push tactics, Cocoon focuses on establishing a long-term collaboration based on promises of cooperation and common objectives and attracting wholesalers as well as retailers all around the country The business has engaged in certain activities to strengthen the cooperative relationship based on the benefits of both parties including regularly sharing information about products, providing timely support, and keeping the support policy fair and reasonable The company helps distributors, specifically, in responding to customer feedback and helps train for sales advice as well as product preservation in the warehouse

In particular, Cocoon always supports advertising through various channels and generates ideal conditions for retailers to sell more conveniently Free banner graphics containing contact information, user guides, flyers, etc are always made available to retailers They are also allowed to take part in all Cocoon sales promotion activities and promotions and be updated about costs, information on products, policies, and goods,etc In addition to appropriate return policies, Cocoon offers treatment policies with a variety of attractive discounts or commissions dependent on the quantity of products imported by channel members in order to improve their relationship with channel members With such attractive supportive policies, Cocoon has successfully cooperated with many well-known retailers and wholesalers in the cosmetics industry such as Hasaki, Watsons Vietnam, or drug stores such

as Long Chau, An Khang, etc

(Photo: Website of Watsons)

In terms of pull strategies, Cocoon has done a fantastic job of promoting products on social media platforms like Facebook, Instagram, Tik Tok, etc with relevant, understandable, and appealing content Similarly, on e-commerce platforms like Shopee or Lazada, the business always ensures that products are quickly updated with prices and quantity Alongside eye-catching images as well as specific product information, discount offers are often used

by the brand to induce more customers

As a brand that emphasizes environmental factors, Cocoon often has events related to animal and environmental protection Most recently, the brand has collaborated with AF (Animals Asia Foundation) in ending elephant riding and protecting bears in Tam Dao National Park From each product that is sold, Cocoon will use 10.000vnd donating into AAF' Funds to protect these animals The campaigns were successful in attracting long-time consumers as well as potential customers with an interest in the environment The campaign has not only motivated customers to want to contribute by purchasing Cocoon products but has spread a positive value, raising people's awareness of animal protection, as well

(Photo: Website of Cocoon)

One of the other typical cocoon tactics is to use celebrity endorsements Cocoon prioritizes collaborating with influencers who have attention about nature issues or celebrating female beauty such as Vlogger Giang Oi, Trinh Pham, etc

(Photo: Giang Oi!)

Another significant campaign to attract Cocoon customers is the collaboration with a female rapper Suboi with a line of exfoliating products for skin and lip from Dak Lak coffee

(Photo: Website of Cocoon)

With eye-catching red packaging and a strong image of the rapper, the campaign has brought a very meaningful message that the beauty of each person, especially each woman, is unique and impossible to imitate Each person should be proud and love their body, the Queen version both outside and inside each of them