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- Jul 15, 2006
FLINT XX2s...
Are those only for the all-star game?
Are those only for the all-star game?
WHAT BLOCK YOU ON!!
WE WILL BE THERE!
skateboarding
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I really wonder about the "glitch." Sure you want to believe that Nike is such a huge company and that they have so much going on that something like this could just "slip through the cracks." But you also have to consider that the Jordan XX2 is a HUGE release for them, especially on All-Star Weekend and MJ's birthday. Everyone saw how detailed the graphics and ads were; isn't it plausible that things were double and triple checked to make sure nothing was screwed up?
These supposed "Team Economics" dudes should know what I'm talking about. It's called reference dependent preferences (basic Behaviorial Economics, Kahneman and Tversky). Nike set our reference points at $175 for the shoe. Therefor, by reducing the price so much, disguising it as a "glitch" would make it seem like a big gain for us consumers. The result would be what happened--more people bought the shoe than what would have been. They have smart forecasters over at JB and they probably predicted that the shoe would not sell out and would eventually go on sale. But stay with me, I think I'm doing more than stating the obvious.
So when people get through for the few hours and get the shoe, not only does JB sell a huge stock that probably would have went on sale anyway and sold for that much a few months from now, they did two more things. One, for the people that missed out, JB raised their expectations of getting the shoe, creating an "attachment effect" which will increase people's interest and willingness to pay for the shoe (this effect is laboratory tested and car salesmen do it all the time). This will presumably create more sales. Second, they got some free advertising. Us who bought the shoes, who wouldn't have bought them before, will now have them to show to our friends and family, who presumably could become more interested and buy them when they wouldn't have before. We also might become attached to the XX2 model, buying other colors that come out (which presumably, a fraction of us wouldn't have done if we hadn't got the shoes now).
This all seems like a JB gamble, and of course it is dependent on the shoe actually being able to sell itself at some point, but I think it was a great marketing scheme--one that will ultimately earn JB more money off the XX2's than they lost today and would have earned otherwise. You can mathematically predict based on past data if it really "worked," and of course it can't be exact, but I have a strong feeling it did work. Just think of it like a quasi-free sample. My conclusion is that the "glitch" was no accident. They will say it was, of course, but that adds to the fun of it. The consumers will feel like they got a bigger gain this way and they'll be happier, more loyal, and more prone to check niketown.com for every release to come, at least until they forget.
PISSEDflintgrey - team am [email protected]/flintgreynt
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That is sound and all, but here is my argument to that....if I was a retailer like FNL/FTL/Champs/FA/whatever, I would be PISSED if JB/Nike did a promo like that. Sure, JB/Nike would make a killing doing so, but what about the retailers who are selling the shoe as well? Have all of them sell at retail while the manufacturer sells at discount?
You stopped too soon in your reasoning. The "attachment effect" to not only this model and the colors that will come out doesn't stop at NDC--it goes to those retailers you mentioned as well. If someone thought they were really going to get the XX2's for $125 and got so used to the idea of owning the shoe that they went ahead and bought it anyway, then presumably they might/could/would walk into Footlocker and buy them. Or for the people who did get the shoe and got attached, wanting to buy the future colors, presumably they could, would, and might do it at one of those specific retailers. When JB advertises, it doesn't just help them directly even with stunts like this--this was just a small, couple hour ripple in the ocean of retailers out there who will feel the results of the marketing ploy.
You can also take a different approach that JB was just being shady--say they are pushing this thing as a glitch even to retailers: retailers can't get mad. But realistically--it was only for a few hours and many people around the globe didn't even know, so it couldn't have hurt any retailers profit too much or even helped JB's profit too much. Like everyone is saying anyway, most of the people who bought the shoes would NOT have bought them if the "glitch" didn't occur--therefor they wouldn't have bought them from the retailers either. BUT the marketing effect for the next colors, or for late customers who now just got convinced to buy the shoes would presumably be distributed equally to both JB and retailers since they're charging the same price now.