Posts Tagged ‘Supply and demand’

Saying You Can't Compete With Free Is Saying You Can't Compete Period

Free at Last album cover
Image via Wikipedia

This is some really good information on the “free” – “Non-Free” conversations.

Getting back to my series of posts on understanding economics when scarcity is removed from some goods, I wanted to address the ridiculousness of the “can’t compete with free” statements that people love to throw out. If we break down the statement carefully, anyone who says that is really saying that they can’t compete at all. The free part is actually meaningless — but the zero is blinding everyone.

I think if  we do as the post says and get back to some basic, fundamental economics we could look at the current marketplace – then make some decisions on supply and demand.  See that the price of what we’ve been offering is moving and we need to become more efficient at producing the product and maximize the areas we have the ability to make revenue.

Saying You Can’t Compete With Free Is Saying You Can’t Compete Period

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More consumer first talk & Squarts

Soda fountainImage via Wikipedia

As I posted the other day – I am engaged in a opportunity to work with a media company who is trying to move and create some new offerings on the web.  It has been fun working through and debating the different aspects of each.

One execllent debate came when we were speaking about how to “get the word” out about a new product.  One option was to use a differnt product this company already has to make a first splash.  I was really opposed to it – because the demographics are all wrong and I feel like it pollutes more than it adds to the appeal of the new product.

It reminded me of the early 1990’s when QT (QuikTrip) came out with the “squart”.  The Squart was a totally new container you would buy at QT and bring back for cheap refills.  But it was the shape of the container that was so cool.  It was the modern day sports water bottle – but no one had seen it before.  (It appears they may have brought the Squart out again!)

To get to my point – the marketing was the cool part.  They didn;t do any.  They didn’t need to.  It was the laws of supply and demand that skyrocketed the Squart into the marketing record books.  They couldn’t keep them on the shelves.  Kids would wait around hoping a new shipment would come in so they could get their hands an a squart container.

It wasn’t that this was that big of a deal – I think if they would of had enough for everyone, it probably would have died as fast it started.  But – because not everyone could get one…it was a frenzy.

That was my point with the new product we were discussing, we want this thing to be the BIGGEST secret in town.  Create the viral buzz the squart did – and they will be lining up to get their hands on their very own Squart – 2.0!

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