Next-gen consoles: The push and pull strategies

Marketing the next-gen consoles demands a certain amount of shrewdness on the part of the manufacturers. From the gamers’ standpoint, it will always be a war between the giants Microsoft and Sony, with Nintendo pitching in each time they get the chance. These marketing strategies often fall into two categories: the “push” and the “pull”. Push encourages retailers to promote a product by giving them a higher profit margin. Pull lets the manufacturer resort to massive advertising, so that consumers will demand and retailers are no longer required to promote the product (consequently, they have lower profit margin).

An anonymous employee from  CompUSA has blogged about the supposed marketing strategies of both Microsoft and Nintendo. Apparently, Nintendo will push and Microsoft will pull. Nintendo will sell the Wii system by the bulk at $ 237.50, giving the store $ 12 profit for every Wii system sold at $ 249. Microsoft, on the other hand, will sell the core system by the bulk at approximately $ 292 and the full 360 at approximately $ 385. The retailer earns $ 8 on the core system and $ 15 on the full 360.

Microsoft “pulling” means it would have to spend more on advertising and attracting customers – a more secure tactic that won’t have to rely on retailers to do the promotion. Obviously, Microsoft has proven that this is a workable marketing strategy. Nintendo doesn’t seem to run short of advertising gimmicks, either. It’s just a matter of time before the sales of these next-gen consoles will tell whether “pushing” is really better than “pulling”, and vice versa.

Marketing the next-gen consoles demands a certain amount of shrewdness on the part of the manufacturers. From the gamers’ standpoint, it will always be a war between the giants Microsoft and Sony, with Nintendo pitching in each time they get the chance. These marketing strategies often fall into two categories: the “push” and the “pull”. Push encourages retailers to promote a product by giving them a higher profit margin. Pull lets the manufacturer resort to massive advertising, so that consumers will demand and retailers are no longer required to promote the product (consequently, they have lower profit margin).

An anonymous employee from  CompUSA has blogged about the supposed marketing strategies of both Microsoft and Nintendo. Apparently, Nintendo will push and Microsoft will pull. Nintendo will sell the Wii system by the bulk at $ 237.50, giving the store $ 12 profit for every Wii system sold at $ 249. Microsoft, on the other hand, will sell the core system by the bulk at approximately $ 292 and the full 360 at approximately $ 385. The retailer earns $ 8 on the core system and $ 15 on the full 360.

Microsoft “pulling” means it would have to spend more on advertising and attracting customers – a more secure tactic that won’t have to rely on retailers to do the promotion. Obviously, Microsoft has proven that this is a workable marketing strategy. Nintendo doesn’t seem to run short of advertising gimmicks, either. It’s just a matter of time before the sales of these next-gen consoles will tell whether “pushing” is really better than “pulling”, and vice versa.