May 29, 2011

I went to COSTCO today. By constantly rotating products in and out of the store, they create a real sense of buying urgency. My COSTCO adventure had me reflecting on a recent Wall St. Journal article by Eric Felton, author of the new book Loyalty: The Vexing Virtue. Eric explored Disney’s famous vault marketing theory, in which Disney constantly take popular videos off the market (back in the vault) for selected periods of time.

In the article, Sanjay Sood, who teaches marketing at UCLA’s Anderson School of Management, stated that removing a product, so it is not there all the time, generates excitement. But Eric argues that the purpose might be to create fear. Prof. Lattin of the Stanford Graduate School of Business stated that many behavioral science studies show that if a supermarket wants to move a stack of soup just put up a sign that says “Limit 12 per customer.” Felton asks the question, “Are we really suckers for such obvious manipulations?” Well, my trip to COSTCO gave me the answer. Yes! Bottom-line: If you want to sell something, as I point out in my book (www.powershiftmarketingbook.com), it helps if people believe there is a limited supply of your product or service.


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