Negative Effects of Push StrategyManufacturers can promote their products in two ways. First, they can employ a pull strategy, meaning they stimulate consumer interest in a product, which convinces retail stores to seek out the item. Second, manufacturers can employ a push strategy by promoting the product to wholesalers, which in turn promote the product to retailers. The push strategy, like the pull strategy, has advantages and disadvantages. Example of Push StrategyImagine a clothing manufacturer designs and produces a new type of raincoat. If the manufacturer employs a push strategy to promote the raincoat, it would contact wholesalers to generate interest in the product. If a wholesale company believes it can convince retail stores within its network to stock the raincoats, it would buy some. The manufacturer takes payment and leaves the promotional chain. The wholesaler then tries to sell the coats to retailers at a slight markup. A negative effect of the push strategy is that you might need a dedicated sales force to actively promote your products to wholesalers. Small businesses might not be able to afford the payroll of a permanent sales team, meaning less experienced employees will have to network and market to wholesalers. For example, employees would have to contact wholesalers, establish relationships, secure contracts and expedite shipping, all of which are activities experts could perform more effectively. Lack of InterestAnother potential negative effect of a push strategy is that the demand might not exist among wholesalers, retailers or consumers. The raincoat manufacturer would be left with a stockpile of coats but no means of distribution. To avoid this, manufacturers can use market research to forecast demand. But even this is not foolproof because consumers are fickle and markets shift quickly. Poor Negotiating PositionA wholesaler takes on risk when it buys a product for resale. If retail stores decline the product, the wholesaler might lose its entire investment. Consequently, manufacturers that employ a push strategy are in a poor negotiating position. The push strategy’s negative effects are why some businesses instead choose a pull strategy. For example, suppose the raincoat manufacturer decides to use a pull strategy to generate consumer demand. The manufacturer hires an advertising agency to promote the raincoats in magazines and at fashion shows. Intrigued customers begin to ask retail stores if they carry the raincoats. Sensing profit in the wind, the retail stores contact wholesalers to find out where they can buy the item. The wholesalers then contact the manufacturer, which is now in a powerful negotiating position.- Jupiterimages/Creatas/Getty Images