Tuesday, November 22, 2005
Frenzy Marketing…Using Fear to Get Consumers to Purchase
Lately the American consumer has been getting the shaft economically. Recently it was high gas prices, then high heating oil/natural gas prices and now Microsoft’s XBOX 360. The last few days of television has included numerous reports on the new gaming system XBOX 360. It isn’t surprising since its Christmas buying season and Xbox fans have been waiting more than 2 ½ years for the 360.
What I find appalling is the method in which each of these bastard companies ExonMobile, Questar Gas, and Microsoft has promoted their product. These companies have used fear to sell product and make record profits. The oil companies used the fear of terrorism and natural disasters to boost profits to stratospheric levels. You might argue that these companies weren’t responsible for either terrorism or natural disasters and you are right but they certainly didn’t do anything to dispel the myth that we were running out of gas. Gas prices were raised due to perceived decrease in production and perceived increase in demand due to fear. Average Joe Consumer thinks well if I don’t buy gas today by tomorrow it will be more expensive or there won’t be any so I better buy today because I have to get to work. Suddenly inquires by the government and prices miraculously go down.
Questar did the same thing in Utah. They started announcing that there would be considerable shortages of natural gas and that their suppliers were going to raise prices. Questar then convinces the Utah Utility Commission that we need another rate increase. For those who don’t know that is 2 rate increases in 4 months for a total increase of 45%. FYI: Questar is only dependant upon the market for 18% of its natural gas supply.
Xbox 360 is now being marketed the same way. Microsoft is creating frenzy among its buyers by creating demand by inventing an artificial lack of supply. Utah stores have not been allowed to release supply numbers but many news sources have come out saying that Wal-Mart who is a majority supplier only has 15 units at each of the Utah stores. “Microsoft has conceded that an ambitious plan to launch the console worldwide within a few weeks will mean fewer consoles initially in North America.” MSNBC. Microsoft is manipulating supply to boost press coverage. The shortage has become headlines for papers and top news on television. This coverage is free to Microsoft and is creating for more demand. You cannot convince me that Microsoft wasn’t prepared for this release. The date of the release has been public for more than a year. The system was announced almost 3 years ago. Microsoft has plenty of Xboxes waiting in warehouses and as we get closer to Christmas more of it will be released. Bill Gates didn’t become the world’s richest man by being stupid. He knows business. This is manipulation of the market that I think is wrong. On last nights news a clip was shown of two women fighting over a Cabbage Patch Doll back in 1985 when there really was a supply problem of the hottest Christmas toy. Check eBay for the exorbitant prices people are buying and selling Xbox 360’s. My point is how can business ethics allow companies to market and sell products solely based on fear. Fear from being able to get to work, fear from being able to heat their homes, fear that little Johnny will be disappointed on Christmas. Maybe its shame on America for allowing companies to market and sell to us as though we are sheep.
Now damn it were can I get my Xbox?
Lately the American consumer has been getting the shaft economically. Recently it was high gas prices, then high heating oil/natural gas prices and now Microsoft’s XBOX 360. The last few days of television has included numerous reports on the new gaming system XBOX 360. It isn’t surprising since its Christmas buying season and Xbox fans have been waiting more than 2 ½ years for the 360.
What I find appalling is the method in which each of these bastard companies ExonMobile, Questar Gas, and Microsoft has promoted their product. These companies have used fear to sell product and make record profits. The oil companies used the fear of terrorism and natural disasters to boost profits to stratospheric levels. You might argue that these companies weren’t responsible for either terrorism or natural disasters and you are right but they certainly didn’t do anything to dispel the myth that we were running out of gas. Gas prices were raised due to perceived decrease in production and perceived increase in demand due to fear. Average Joe Consumer thinks well if I don’t buy gas today by tomorrow it will be more expensive or there won’t be any so I better buy today because I have to get to work. Suddenly inquires by the government and prices miraculously go down.
Questar did the same thing in Utah. They started announcing that there would be considerable shortages of natural gas and that their suppliers were going to raise prices. Questar then convinces the Utah Utility Commission that we need another rate increase. For those who don’t know that is 2 rate increases in 4 months for a total increase of 45%. FYI: Questar is only dependant upon the market for 18% of its natural gas supply.
Xbox 360 is now being marketed the same way. Microsoft is creating frenzy among its buyers by creating demand by inventing an artificial lack of supply. Utah stores have not been allowed to release supply numbers but many news sources have come out saying that Wal-Mart who is a majority supplier only has 15 units at each of the Utah stores. “Microsoft has conceded that an ambitious plan to launch the console worldwide within a few weeks will mean fewer consoles initially in North America.” MSNBC. Microsoft is manipulating supply to boost press coverage. The shortage has become headlines for papers and top news on television. This coverage is free to Microsoft and is creating for more demand. You cannot convince me that Microsoft wasn’t prepared for this release. The date of the release has been public for more than a year. The system was announced almost 3 years ago. Microsoft has plenty of Xboxes waiting in warehouses and as we get closer to Christmas more of it will be released. Bill Gates didn’t become the world’s richest man by being stupid. He knows business. This is manipulation of the market that I think is wrong. On last nights news a clip was shown of two women fighting over a Cabbage Patch Doll back in 1985 when there really was a supply problem of the hottest Christmas toy. Check eBay for the exorbitant prices people are buying and selling Xbox 360’s. My point is how can business ethics allow companies to market and sell products solely based on fear. Fear from being able to get to work, fear from being able to heat their homes, fear that little Johnny will be disappointed on Christmas. Maybe its shame on America for allowing companies to market and sell to us as though we are sheep.
Now damn it were can I get my Xbox?
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