Executing the Scarcity Tactic in Marketing Can Do Harm

I can understand a company wanting to generate the buzz that Apple has been getting with their product scarcity tactic, but it’s getting out of hand. But the past couple of days, there’s been a major instance of a product release coming when stores aren’t even open or the product is not available online and in only one store in the country in daily limited supply. Both products have strong stories to tell, but they’re not stories that consumers are actively seeking out – like they do for Apple products. When there is a demand for 4 million units in the first weeks of a product release (New iPad) you can deal with some folks being upset they can’t get their hands on the product.  When there is very little demand, you can’t risk people being upset that the product is not available. As such, the scarcity tactic does more harm than good.

The bigger fail of the two is AT&T’s launch with Microsoft of the Lumia 900 Windows 7 phone. They supposedly spent $150M to promote the product’s launch date on April 8th. That would be fine if the 8th was not Easter Sunday. Did they think that people would separate from family to buy products – even if stores were open?  The NY Times did their own research to find that there were just no units to be found in the few Manhattan stores that were open. I personally don’t buy that it was smart marketing to launch a big product on a commercially dead day. There certainly is not any buzz that’s coming from the lack of found product.

They had to have spent a pretty penny on the Nicki Minaj performance in Times Square.  It’s too bad they couldn’t have drafted any of that into sales through the weekend at those 30+ stores within five miles of Times Square.

Nike also did something weird with its marketing schedule. They launched a video yesterday on YouTube that stands as their key video campaign element for the Nike+ FuelBand product. The “Make It Count” campaign centerpiece conveys a great Nike spirit:

Whether the production was as clandestine as they would lead you to believe – with the director, Casey Neistat, taking the entire budget to travel around the world with his best friend – doesn’t really matter.  With nearly 150K views in just over a day, they are doing pretty nicely from a numbers sense. It is a great long form piece if you want to capture the Nike Brand, but I don’t know if it does a great job at conveying what the FuelBand actually is.  When I went to the site to find out, its features made me interested but there was no price and they didn’t have any in stock.  They do point out that stock is updated on the site as it becomes available and each morning the NYC Niketown gets an extremely limited quantity.

I don’t know that I would be interested in checking back regularly for this product as I don’t have to have it and can stand to wait for a while. But I would imagine both Nike and AT&T/Microsoft/Nokia dearly hope that people will feel they must have it in order to drive the opening weekend numbers.

The problem in both instances is that they have executed big bangs for the product launches with no way to leverage the excitement to drive conversions to purchase. I know I’m being cynical when comparing the scarcity “theory” between these products and Apple products, but I just can’t get my head around the fact that there is such a huge disconnect between marketing decisions and distribution capabilities. If this new marketing phenomenon is all about a press release, then it certainly will do harm to many bottom lines.

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