Posted in Technology

The Initial Supply Marketing

How would you define the hotness of a new Product? Would it be hot because of the latest technology it uses, or would it be because a lot of people seem to be wanting it or would it be both?

In Today’s business, it is both. Sure, the product can have all the latest technology crammed into it, But if it doesnt sell on the first day, then it is not hot. When you bring a new product to the market, you are playing a risk and you want as much marketing power as you have to make your product succeed and minimize the risks involved. Some would also call it Risk Mitigation on the fate of a new product. Let’s take some practical examples:

Consider Playstation 3. PS3 was the latest gaming console out of Sony’s den. It had the latest and greatest Blu-Ray disc player along with an improved and latest technology to quench the need for realism and High definitionness in Gaming. Let’s say sony had a 100 PS2 users before the PS3 launch and let’s say that out of that number, about 50% wanted to upgrade (so 50) and half of them wanted to upgrade now (so 25). Let’s say Sony estimates to see 25 converts (users of other Gaming consoles) ready for the PS3 plunge on Day 1. So here it is, Sony has an estimated order of 50 PS3 units for the first day. So to meet the estimated demand for 50 units, would Sony ship 50 of them on the first day? or just ship 40 units on the first day and leave 10 shoppers out in the cold waiting for the next batch?

Sony would do the latter because, it creates the hype. It creates another artificial layer of hotness around the already existing “Latest technology” Hotness. Sony fans would line up for the console at stores from as much as a week back to get their hands on the supply-limited (not limited supply) gadget first, Never mind that you can be patient for the next few weeks or a whole month for the supply craze to fade out. People will now want the gadget even more, because all the gadget news columns will blink with headlines – “PS3 sold out in the first hour”. What has happened is Risk Mitigation of a Risk of a Product’s success, along with that several million dollars of free marketing generated from news columns and all this by just tweaking your initial supply. It is free because Sony wouldn’t be paying a news station to talk about the hotness, but the news station itself would want to talk about it, in order to get their own ratings high.

Apple did this with iPhone. 6 Months before it arrived, all the news stations, blogs, tech news were full of iPhone. People who had not heard about it, who didn’t know about it, easily knew it, without Apple spending much on those Initial Marketing. The tightened first day supply also helped the marketing because, a product that is considered hot will only become hotter if a sense of more people wanting it is left in the play field.

Sprint is doing this with the Samsung Instinct and many more Technology and Tech-related companies continue to do this. This is what I wanted to call as the “Initial Supply Marketing”. I am not a business oriented person or an MBA and I don’t know an exact book word to call this phenomenon, but I guess these 3 words describe the act quite well. If you know the marketing term and more info on this, please do share it with me.

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Author:

I am a Software Engineer by profession. My interests are in Computers, Science, Technology, Movies, Music, Photography and Writing. I love to do a lot of things, but am still searching for the ultimate thing that I can love to do. You will find here all the volcanic outbursts of my creative side as I explore the world through my perspective. Well, mainly fun, what's world without any fun!

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