ITPEC FE Morning April 2019 Question 69

Predicting what customers want before producing it — in a push strategy the manufacturer decides what to make and pushes it toward the customer.

A push strategy starts from the seller: the manufacturer forecasts demand, produces the goods in advance and moves them through the distribution channel with sales promotion to wholesalers and retailers. A pull strategy starts from the customer: demand, often created by advertising or expressed as orders, draws the product from the maker. Producing on a forecast before any customer has asked is the push side.

Answer (b)

Why not others:

• •(a) — ranking customers by profitability and serving the profitable ones first is customer profitability management, part of CRM; it says nothing about the direction of the flow
• •(c) — making a customer's own version on request is production driven by customer demand, the pull side (build to order)
• •(d) — close one-to-one contact with each customer to shape new products is one-to-one marketing, again led by the customer

Key rule: Ask who starts the flow: the maker producing on its own forecast is push, the customer's request or demand drawing the product is pull.

Business Strategy Management · AI-written, may contain errors