How Disney’s Frozen and Jordans Are Similar

Image

One of the most fundamental principles of microeconomics is supply and demand.  As the demand for a product or service increases and the supply stays the same, it drives the price of what is coveted increases.  Nike’s Jordan  brand has made sneakers from someone who hasn’t dribbled a ball in eleven years more relevant than he ever was with this model.  As a kid, everyone loved Michael Jordan and his sneakers were king.  The original marketing plan for his sneakers while he was still playing was that anyone could theoretically buy the sneakers because they didn’t sell out and were available anywhere–they just cost $150 in the 90’s.  

Twenty years ago it was absurd to pay that much for a pair of sneakers.  However, the supply was there and if you really wanted them you shelled out the money for them.  After Jordan retired and Nike came up with the idea of selling his retro sneakers they came up with a new plan: the price point has only changed by $35 because or the times/inflation but made them exclusive by playing on the nostalgia of the people who wanted those kicks growing up but could not afford them at the time.  Since those who were youth at the time were now old enough to afford them to buy if they could get their hands on them fast enough.  The demand went through the roof as everyone tried to get their favorite ones that got stolen or they ran them into the ground during their formative years.

As the sneakers became more exclusive, there became a culture of collecting them and that really drove the demand up.  The internet made people who understood the principles of supply and demand quite savvy because they could sell their $150 sneakers online for nearly 300% what they paid for depending on the shoe and the crazy thing is people will actually buy them (I would if I had the disposable income for a couple of pairs). 

Disney has taken this same approach with Frozen.  For starters, they began to release trailers about a winter movie in July.  Just enough time to get children excited for the holiday season.  Then, they made a winter movie that takes place in the summertime.  Brilliant!  Why?

Disney knows when they have a movie franchise that will rake in a billion dollars in the box office, but will make even more money on the merchandise.  They are still selling stuff from Cars like the first movie wasn’t released eight years ago.  Frozen was a little different.  Since they made a movie about snow in the summer means that they could sell merchandise year-round.  When it’s cold kids will love all of the snow and stuff like what’s on the ground during the winter months wishing for the summer.  When it’s beach time, they can sell Frozen bathing suits, towels, and all of that (they insured this by making the talking snowman, Olaf sing a song called “In the Summer.”  

Around Christmas time if you looked in Toys R Us, that section had everything.  The kids loved the movie (mine included) but the merch didn’t catch on right away.  You could buy the stuff just as readily as you could anything else from them.  ‘Let It Go’ began to take steam once the movie was in select theatres.  All parents thought it was cute at first but then began to hate the song as their child sang it over and over and over again and wanted to be Queen Elsa who actually is the antagonist (another twist that is ingenious).  Starting around February when the Oscar buzz generated, everything Frozen sold out.  Cydney got her Elsa castle for her birthday right on time because by Valentine’s Day they were gone.

Disney’s Frozen merchandise is all about exclusivity.  I’m finally preparing for Cydney’s birthday party a month later because of my grandmother’s passing and I had a hard time finding Frozen anything.  The party supplies aren’t in store and are close to sold out everywhere online.  Most of the toys are out of stock even on Amazon, and the prices of what’s available are sky high.  The figurine playset that one would notmally find at the Disney Store for $26 is on Amazon for $49.99.  The $14 Elsa dress is now $45 and someone is selling them on eBay for $68.  People-myself included-are buying them because you have to have it.  You can’t disappoint the kids.  The marketing mavens at Disney know this too.  I went to the Disney store looking for Elsa’s dress and the manager told me that this one little pocket was all of the Frozen stuff they had.  It was pencils, Kristoff dolls, and bathing suits.  I asked him when they would have more and he said they don’t know because the Frozen stuff comes intermittently when no one knows which makes sure no one can wait around and keeps things on a first come first serve basis…Slightly advanced supply and demand microeconomics suggests that this keeps things exclusive. 

The DVD/Blu-Ray was released today.  Watch those sales go through the roof.  Within the next couple of weeks there will be more Frozen merchandise everywhere and you’ll see more and more of it being geared towards the summer.  And our children will be Ice Queens [who value family] year-round…even when it’s 95 degrees outside.  If you think about it that’s unbelievable.  

…Like a teenager who wasn’t alive when the Chicago Bulls went 72-10 wearing Jordan Bred or Concord XI’s which can be found on eBay for $800 and $500 respectively.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s