The Branding Equation: Demand+Scarcity = Value
There’s no doubt that nothing creates demand like a line of customers waiting outside your store. A line not only tells potential customers that something inside is worth waiting for, but it also sends a message of urgency.Creating the perception of scarcity is a powerful formula for brands to remember: if a brand is in demand and people believe it’s in short supply, the value of the brand increases exponentially.
Table Of Contents
- Why Demand Creation Is Important?
- Bands Who Exploited Demand And Supply
2.1. How “The Who” Pushed Supply and Demand To Their Favor
2.2. Scarcity Utilization By Led Zeppelin - Lesson Learnt
1. Why Demand Creation Is Important?
Create the perception (or reality) that your product or service is rare then watch it’s value increase.
In 2006 and 2007, finding a Wii console around Christmas time was nearly impossible. When stores were rumored to be getting a shipment, the line would form days in advance. People were literally camping outside electronic stores waiting for the chance to buy a Nintendo Wii! Even into 2008, two years after they debuted, the Wii’s were selling as fast as retailers could order them.
The Wii has become the bestselling video game system of its generation, having shipped more than 70 million consoles worldwide. While buying one today is as easy as walking into a neighborhood electronics store, in the first two years after launching, it seemed impossible to find out.
By always keeping supply lower than the demand, Nintendo created urge and excitement over the Wii. That urgency was a key factor in allowing Nintendo to wait three years before finally lowering the price of a Wii console.
“Build the prisons and they will commit the crimes.”
― Brian Spellman
2.2 Bands Who Exploited Demand And Supply
When it comes to music, the demand for new content has always been high. As soon as we were able to produce media for mass consumption there was an immediate demand that the creative minds of the world continue to deliver fresh material on a regular basis. Radio introduced people to musicians and singers that they would then seek out at record stores or concert halls. Records and the memories created from concert experiences fueled consumer to consumer promotion, which created new fans for various acts who in turn also demanded new content. That process has continued to build audiences and develop talent for over half a century at this point, with social media and the age of streaming simplifying the process in ways people as recently as twenty years ago never could have imagined.The Who came along first. Led Zeppelin followed only a few years later. Each brought their own brand of passionate and powerful British rock to the world.
In the 1970s, Led Zeppelin single-handedly raised the art of heavy metal into the public consciousness. They were, arguably, the biggest act of the 1970s, touring the world on board their customized Boeing 720 nicknamed The Starship
2.1. How “The Who” Pushed Supply and Demand To Their Favor
Keith Moon, drummer at The Who, died in 1978 when he was trying to kick his alcohol and drug habits. He was prescribed Clomethiazole, a medication he was told to take whenever he felt the craving for alcohol. On the night of September 6, after having dinner, Moon felt that dreadful urge. He impulsively took the pills one after another. He died that night in his sleep.
The two members contined on through adversity even after the death of Keith. It takes dedication to the music to soldier on through the death of the entire rhythm section of the band.
Despite the challenges, The Who continued to grow and entertain fans. They even played the halftime show at the 2010 Super Bowl. But by continuing to go on tour and record new material, The Who has pushed the supply and demand equation out of their favor.
2.2 Scarcity Utilization By Led Zeppelin
Led Zeppelin lost Bonham, another one of the band’s drummer ,two years later. Bonham had been drinking heavily on the day he died, beginning with four quadruple vodkas for breakfast before rehearsals. He continued that pace until the evening when the band retired for the night at the nearby home of guitarist Jimmy Page. Bonham fell asleep and never awoke.
Led Zeppelin has brilliantly created scarcity. Supply of Led Zeppelin concerts is far below the huge demand. Their 2007 reunion show was the most talked about and anticipated concert in history, and fans around the world rushed to pick up tickets knowing it might be the only chance they would ever get to see Led Zeppelin in concert.
Demand for Led Zeppelin in concerts is very high because Led Zeppelin concerts are rare and that scarcity increases their brand value.
Demand for The Who concerts is also pretty high, but demand pales when compared to the demand for a Led Zeppelin show.
3. Lesson Learnt
If a brand is in demand and people believe it’s in short supply, the value of the brand increases. From the beginning, Nintendo intentionally kept supplies low which resulted in endless lines at stores that stocked the console and extremely high prices for units being offered for sale.
