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Home » The Famous Blog » Cameos, McRibs and Controlling the Laws of Economics

Cameos, McRibs and Controlling the Laws of Economics

November 25, 2011 - Last Modified: November 25, 2011 by Eugene Farber

Laws of Economics

You don’t need to be Milton Friedman to understand the laws of supply and demand. You never really even had to have taken an economics class.

Intuitively we know that, for example, when gasoline is in low supply the prices will go up because, let’s face it, demand isn’t going anywhere any time soon.

Supply, demand and prices will always be intertwined in an ever-lasting relationship. Sometimes demand drives supply. Sometimes supply drives prices.

But what if you could artificially create demand by tinkering with the supply?

That is exactly what companies like McDonald’s and Starbucks do. And there is no reason you can’t do the same.

McDonald’s and Starbucks are Messing with Your Head

McDonald’s and Starbucks

Every so often McDonald’s releases the smothered creation they call “The McRib.”

In a similar fashion, Starbucks makes their “Pumpkin Spice Latte” available for a limited time (the difference being that this release is seasonal and predictable).

They are artificially creating scarcity!

Artificial Scarcity?

Let’s be honest. There is nothing that is actually scarce about either the McRib or a Pumpkin Spice Latte.

Is there something scarce about the “meat” that is used in the McRib? I don’t think so. The ingredients used in that work of art are regularly available.

Starbucks can claim that the Pumpkin Spice Latte is seasonal because pumpkins are. But are they using real pumpkins in their latte?

To be honest, I don’t know. But did you know that many companies use “natural flavors” to make their food smell and taste incredibly delicious no matter what they are made of? These chemicals are definitely never scarce.

This is a perfect instance of scarcity being a façade – induced by the company pushing the product.

What Came First?

This is the perfect case of “what came first.”

Do you want the Pumpkin Spice Latte because it is so seasonal and reminds you of fall? Or do you want it because Starbucks tells you its seasonal by only making it available for a limited time?

Even if you give Starbucks the “seasonal” argument, what makes a McRib so seasonal? Hmm…maybe that’s why their releases of the sandwich are so scattered and unpredictable.

So ask yourself why people really want these products.

So Why No Regularity?

If these products show such great success in the time they are available, why are the companies doing this? Why not just make these items a regular mainstay on their respective menus?

Well, that’s something you have to ask the companies. They both have huge marketing departments that most likely have their reasons.

But here’s a theory…

Maybe these items wouldn’t sell well in the midst of the other options on the menu without the artificial scarcity.

Maybe without the looming threat of disappearing yet again, the McRib would get no traction and just get destroyed by the Big Mac.

And the McRib isn’t the only sandwich that makes cameo appearances on the menu every so often.

These “cameos” on the menu are designed to create scarcity, drive demand and build a crowd.

I’d be lying if I said the commercials of people excited for the return of the McRib didn’t make me want to go get one just a little bit (and I haven’t been to McDonald’s in years).

If people go to buy the scarce item, and maybe come back a second time, and a third, eventually they become a regular customer – even when the ‘scarce’ item is gone.

Do You Have a McRib?

This tactic clearly works well. People inherently want what they can’t have. And making something scarce is simple. All you need to do is limit the supply, or limit the time that it is available.

This drives people to take action.

If you own a business, you probably have a standard set of products or services that you offer on a regular basis. These are your menu mainstays.

But are you creating “cameo” appearances for your menu? Something scarce. Something limited. Something that will take people to drive action!

Supplementing your regular offers with additional limited time, or limited quantity, offers can drive people to make a purchase.

And once the first purchase is made, it’s easier to make the second, and to eventually turn someone into a regular customer.

The Caveat

You have to do your homework and know your audience.

Some things are scarce, or are in limited supply because no one wants them.

Providing a limited offer that isn’t right for your target audience will accomplish one of two things.

It will not sell at all, and possibly worse – drive people away from your business.

Or it will sell to customers that aren’t your target audience – so they will not become regular customers for your “mainstay menu.”

Scarcity by itself doesn’t create demand; it has to be coupled with quality. Targeted quality.

 

So go ahead. Make an offer to your customers. And then take it away. Its amazing what a little scarcity can accomplish.

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Filed Under: Marketing, Money

About Eugene Farber

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Eugene Farber (@EugeneFarber) is a writer, entrepreneur and founder of Content Strategy Hub. If you are ready to take your content marketing to the next level, check out these 87 Ways to Dominate Your Content Strategy.

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{ 9 Responses }

  1. cate says:
    I agree with you Hesham, to me what matters most is the reaction of my customers, then the issue of sales later. This is because, have seen a friend use this strategy and made so much sale only for a short period becaose the people were not happy. It is a great strategy though, will try it and see the outcome.
  2. Noel Addison says:
    "Limited Edition!" tags always sell. This is a great strategy of tempting our customers/clients and buy from our business.
  3. Hesham Zebida says:
    Really interesting stuff Eugene! People always want what they "can not" get, and they are happy to finally find it :) - Maybe I don't want it but I will get one because it's here! - All my friends are having it, so why I will be left behind?! - All people are talking about it, then it must be good! - Let me try it anyways! If you succeed to get people's attention, this is great, but if you succeeded on getting Media's attention, this is perfect! Well.. This marketing strategy play well!
  4. Doug Rice says:
    Great article! All of us want something to look forward to. That's what makes the holidays so special. It's articifical scarcity! Smart marketers look for ways to provide special, out-of-the-ordinary experiences to their customers. Thanks for the insight!
    • Eugene Farber says:
      Thanks Doug. I think your use of "special" is dead on. Apple does a similar thing with its iPhone releases. They only send a limited amount of phones to stores and they get sold out within half a day. Then you have order them online. They know this is going to happen...it happens ever time. But it causes a frenzy.
    • Hesham Zebida says:
      Hey Doug, You remind me with Kohl's! They forced me not to be from other shops because they super discounts and offers, it's raining every month! However, not everything they sale is cheap, but still want to buy my stuff from them!
  5. Ileane says:
    Hi Eugene! I agree with this strategy and I think it will work best for me using extra discount offers. In fact I'm doing it right now by offering a special bonus to Thesis Awesome buyers who get an extra $10 off on top of the 50% discount during this hot holiday shopping season. Of course Hesham gets all the credit for the idea to run the deal for Black Friday and Cyber Monday. :) Nice way to bring this idea from the offline world and introduce it to the online affiliate marketers.
    • Eugene Farber says:
      Hi Ileane, That's a good strategy! I was actually just reading a bunch of consumer reports that were talking about how black Friday (or even Thursday this year) is almost all hype and that the sales are going to continue for the next couple of weeks. Going to be interesting to see if that's true.
    • Hesham Zebida says:
      I was not really planning it, but some how you pushed me to the right direction! I don't really care too much about sales compared to make people happy and help them making a purchase, from the other side I discovered that being part of such event spread the word about you! Really nice! Thanks Ileane, and I hope you make a lot of sales :)

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