Originally published in afaqs here
At B-school, our Marketing professor cautioned us against sins a marketer must not commit. In his Seven-Deadly-Sins like list for marketing, the deadliest was something he labeled, the ‘mahapaap of marketing’ – a marketer creating demand but unable to fulfil it. So while Amazon sold over 100 million items in its Prime Day shopping frenzy, the millions of eager shoppers jostling to enter during its opening hours caused a server outage, not unlike shoppers of yore bringing down doors. The good Professor Neelakantan may have described this Prime Day outage as a mahapaap, but is it really so?
Whenever I go home, to Bombay, I eat sandwiches at a particular roadside stall. If you visit the Stall late, say 10:30 pm, it’s unlikely you will find their specialty Cheese Chilly Toast; they would have run out of it by then. The fact that the sandwich runs out quickly, paradoxically adds to its allure. By nature, humans crave for things in short supply; the lack of something, ironically fuels our hunger for it. If you were to think of this in terms of the classical demand-supply curve, a sweet spot lies just under the intersection – where supply is slightly under demand. Here’s where demand becomes desire. Marketing magic happens here, where you are not simply servicing demand but satisfying desire. It offers pricing power, potentially higher margins with lower discounts and builds an inexplicable sheen on the brand. Of course, this is not necessarily true for all product categories especially where consumer involvement and cost of switching brands is low. And it goes without saying that brand and product proposition needs to be robust and of value to the consumer, after all, soda bubbles don’t last long.
Hence, media reports of the amazon Prime Day outage may have fueled even more consumer desire and frenzy. Stories of Prime Day offers so good that the website crashed may have drawn more consumers to log in and who may have ended up buying something they didn’t really need. The Prime Day outage may not have been a mahapaap, after all. In the automotive business, for instance, a short waiting time for a particular model or variant or color, may add to the allure of a brand or product – from the times of the Fiat Uno to the Ford Ecosport (subtle brand plug warning). Of course, the waiting time can’t be too much and consumers now demand to know how long it will be, else he or she will simply move on to something else.
Can getting to this sweet spot be engineered? Predicting demand becomes critical in industries with perishable products or complex manufacturing based industries with long lead time and implications on a long tail of suppliers supplying components. Unlike football with its Zoo full of predictors (an octopus to a hippopotamus to a parakeet) companies deploy advanced analytics and modeling techniques to predict consumer demand to keep production in tune with it. With consumers increasingly using the internet for research and purchase, many predictive models now involve signals and digital trails left by consumers. Newspaper reports of wait times on some products and massive discounts on others indicate that this job – crystal ball gazing, say some – is becoming increasingly difficult in a world that’s described as VUCA.
The mathematics helps marketers be better prepared, but instances of supply being just under demand – getting to the sweet spot – may be serendipitous, evolving from supply constraints intercepting unprecedented desire from consumers who see value in a genuinely good product & brand.
Marketing continues to be both science and art. The science helps project demand while it’s only the art that can stoke desire. And desire is innately human and the greatest brands are built on it. Ignoring this may perhaps be the only greatest sin; the mahapaap of marketing.