The world's funniest economics stories

Chapter 17 Meeting Adam Smith in the Supermarket--Consumer Economics (1)
1. Why Napoleon used aluminum bowls instead of silver - conspicuous consumption

According to legend, the French emperor Napoleon III was a very showy person.History records that he was particularly fond of aluminum products.

According to legend, Napoleon at that time was often very happy, and he would often set up banquets to entertain guests from all over the world.Interestingly, every time at the dining table, the table is almost full of silver tableware, but the bowl Napoleon himself used is made of aluminum.The majestic Napoleon the Great does not use bright and noble silver bowls, but always likes to use dull aluminum bowls?Now we sound like this is a very ridiculous thing.But going back more than 200 years, Napoleon's actions are not surprising.

It turns out that in the Napoleon era more than 200 years ago, because of the long history of smelting and using gold and silver, silver products were everywhere in the court, but at that time, people had just learned to smelt aluminum and the technology was very backward, so aluminum products were in It was an extremely rare item at the time.Rare things are more expensive.It is said that aluminum ware, which was very expensive because of its rarity, was not only unaffordable for ordinary people at that time, but even ministers and nobles could only stay away from it.Therefore, Napoleon, who always liked to show off, used aluminum bowls to show his nobility and dignity.

In the era of Napoleon, aluminum products were very rare, but after the invention of electrolytic aluminum technology, the mass production of aluminum products made people feel that the use of aluminum products has become a very common phenomenon, so the price of aluminum has also dropped.Today, when the prices of gold, silver and other accessories are rising, no one pays attention to aluminum products, let alone shows them off.

Napoleon paid a high price to buy back aluminum products for his own use and display. This behavior is called conspicuous consumption in the field of economics.

The concept of conspicuous consumption was first proposed by Veblen in 1899 in his book The Theory of the Leisure Class—An Economic Study of Institutions as an important social and economic phenomenon.According to Veblen, goods can be divided into two categories: non-conspicuous goods and conspicuous goods.Among them, non-conspicuous goods can only bring material utility to consumers, while conspicuous goods can bring vanity utility to consumers.

The so-called vanity utility refers to the satisfaction brought by being respected by others through the consumption of a particular commodity.

It can be seen from this that the meaning of conspicuous consumption is that the purpose of this consumption behavior is not to lie in its practical value, but to show off one's own identity.In addition, research on consumer psychology also shows that the price of commodities has a very good exclusive effect, which can well show the level of personal income.Taking advantage of income, high-level people can often effectively separate themselves from low-level people through high-priced consumption.

For example, Napoleon used aluminum bowls to show off his identity, status and wealth at the banquet. Nowadays, driven by the craze of money worship and the concept of carpe diem, many people make a big splash by living in luxury houses, driving famous cars and wearing famous brands. Burn a lot of money.And most of these people have the title of "rich second generation". In the final analysis, it is a kind of "flaunting wealth" mentality at work.

In fact, abnormal conspicuous consumption can bring many adverse consequences.This atmosphere of comparison will inevitably lead to corruption such as power-for-money transactions.And the waste of resources caused by the conspicuous products produced by investing a lot of capital and consuming a lot of resources directly affects the strategic deployment plan for sustainable development.

Symbolic consumption contains two meanings: one is "a symbol of consumption".That is to express and convey certain meanings and information with the help of consumers' consumption, including consumers' status, identity, personality, taste, taste and identity.The consumption process is not only a process of satisfying people's basic needs, but also a process of social expression and social communication.The second is "symbolic consumption", that is, consumers not only consume the commodities themselves, but also consume certain social and cultural meanings symbolized by these commodities, including the mood, aesthetic feeling, atmosphere, style and sentiment during consumption.

2. Why Johnson’s Black Cosmetics sell well——Bundle sales

Johnson Black Cosmetics in the United States is no stranger to many people.But few people know what kind of hardships this series of cosmetics sales ranks in the forefront of the world today, when it started its business.On the issue of the initial sales of products, Johnson, who has always been well-known, once had a hard time as the general manager of Johnson Black Cosmetics.

At the beginning of his business, Johnson ran a small black cosmetics company.Since a large-scale exclusive cosmetics manufacturer almost monopolized the American market at that time, the sales share of black cosmetics companies was not large.

In order to expand the sales volume of the product, Johnson finally came up with a cleverly worded slogan after a long period of deliberation: "When you have used Foley's cosmetics, apply Johnson's powder cream again, it will Get unexpected results."

The emperor paid off, this move not only did not arouse the vigilance of Foley, but also made consumers accept his products quickly and naturally.In this way, all blacks who use Foley's cosmetics will accept this kind of cosmetics that are really good for them without rejection.

Later, with the sharp increase in product sales, Johnson seized this great opportunity in a timely manner and quickly occupied the cosmetics market. A series of related cosmetics.

After several years of hard work, Johnson's series of cosmetics has occupied most of the cosmetics market for African Americans.

When his own products were in a weak position in the market, Johnson cleverly used the cosmetic influence of famous companies to promote his own products, and finally opened up and occupied the cosmetics market.If you look at this event from an economic perspective, it involves the concept of bundling sales.

Do you often encounter such situations in your daily life?Buying an air conditioner gives you a free soymilk machine, buying a mobile phone gives you free phone bills, buying an induction cooker gives you a soup pot... I don’t know when it started, but bundled sales have gradually appeared in all aspects of our lives.So, what is a bundle sale?

Bundled sales are also called conditional sales, that is, a seller requires consumers to purchase another product or service while purchasing its product or service, and the consumer purchases the second product or service as part of its bundled sales. Conditions under which the first product or service can be purchased.Bundled sales expand their influence through the cooperation of two or more brands or companies in the sales process. It can be said to be a form of symbiotic marketing, which is valued and used by more and more companies.

Let's take a look at the main forms of common "bundle sales":

Bundling of packaging. Similar or different items are used in product packaging for unified packaging, such as the bundling of "Sanxiao" toothbrush and toothpaste, and the bundling of "Shulei" shampoo and shower gel and towels.This will benefit everyone and save resources.

Positioning bundling, under normal circumstances, is when new products are launched, they like to adopt this sales method, find a well-known brand to bundle themselves, position themselves, and achieve the purpose of promoting themselves at the same time.For example, Johnson bundled the black cosmetics produced by his company with Frey.

Bundling of information dissemination means bringing together related products for dissemination.In this way, it not only increases the overall dissemination efforts, but also saves a lot of money.For example, "Shufujia" is bundled with "Chinese Medical Association".

Sales bundling is to make several products into a unified package for sale.For example, selling toothpaste, toothbrush, soap, etc. in a packaging box, the price is relatively low, and consumers are willing to buy it because they get benefits.

In fact, bundling is the re-innovation and integration of resources.On the basis of the original resources, a more powerful model is created through integration, which is more conducive to consumers' acceptance and processing of information, and makes consumers change from passive to active.So, for bundling sales, if we can moderately grasp the degree of "bundling" and make some effective scientific planning, so as to avoid an offensive and irrelevant bundling, then such Scientific bundling may work wonders.

As a brand-new case system, bundling sale combines multiple factors such as publicity, sales, promotion, etc., in order to save resources and improve efficiency.But it should be noted that bundled sales are not discounted sales, let alone dumping, and are also very different from "buy one get three free".Reasonable bundling sales methods can bring good sales results to producers, and can also bring benefits to consumers.After understanding the concept of bundled sales, we should all work towards this double win in the specific planning and implementation.

Bundle pricing is also called price bundling strategy or bundling price strategy, which refers to bundling and selling two or more related products and setting a reasonable price.This kind of sales behavior and pricing method often appears in the field of information products, among which, the most famous example is "Microsoft bundles IE with Win XP browser and sells it at zero price".

3. Why Hu Xueyan, the "Red Top Businessman", became rich——Customer Satisfaction

The deeds of Hu Xueyan, a red-top businessman in the Qing Dynasty, who had a good attitude towards customers and thoughtful service, are still praised today.

Satisfying customers is the essence of this red-capped businessman's business.In order to practice this fundamental, he required that all medicines from Hu Qingyutang be genuine, and made "abstinence from bullying" a store rule that employees must abide by.He also requested that everything should be customer-oriented. When customers have questions or need to exchange goods, all shop assistants should not neglect in the slightest, and should do their best to satisfy customers.Whenever there is a problem of poor quality of medicines, Hu Xueyan will immediately recall the medicines that have been issued or sold.

Hu's Piwen Pill is a famous medicine of Hu Qingyutang.Once, a customer who came from afar came to the store and bought a box.Unexpectedly, when the customer paid to open it, he found that the medicine had a mixed smell.Disappointed, the customer asked for a return.After Hu Xueyan heard about it, he stepped forward to observe the pills carefully, and finally found that it was because the medicine had mixed smells in the newly replaced medicine cabinet.Knowing the cause of the odor, Hu Xueyan immediately apologized to the customer and ordered the clerk to replace the new medicine immediately.

Coincidentally.After searching for a long time, the clerk finally informed that Hu's Plague Pill was sold out.Originally, the guests had already given up any hope of getting the medicines, but in order not to disappoint the guests who came from afar, Hu Xueyan took the initiative to stay the guests at home and promised to deliver the medicines within three days.

Later, relying on the high-quality medicines and thoughtful service of the clerks, Hu Qingyutang became bigger and bigger, and became a famous store that is still famous at home and abroad.

A long-established brand store can survive for a hundred years because of Hu Xueyan's fundamental creed of customer satisfaction.As a well-known drug dealer of the first generation, Hu Xueyan passed on the secret of "satisfying customers" to future generations with his actions and beliefs.Similarly, the concept of "customer first" has become the only way for many outstanding entrepreneurs to succeed.In economics, "customer satisfaction" constrains everyone's behavior here.

Customer satisfaction, in essence, reflects a psychological state of customers, which comes from the comparison between the customer's feelings about the consumption of certain products and services of the enterprise and their own expectations.In other words, "satisfaction" is not an absolute concept, but a relative concept.Enterprises can't build a car behind closed doors and stay attached to their own subjective judgments on whether the service, service attitude, product quality, price and other indicators are optimized. Instead, they should examine how well the products and services provided match the expectations and requirements of customers.

Usually, after using the product [including tangible products and services], consumers will make a self-evaluation of the product based on their own consumption experience, and form an attitude towards the product on the basis of the evaluation, that is, they all feel satisfy.According to economists, this kind of satisfaction can also be evaluated and measured.Like life data such as Engel's coefficient and happiness index, satisfaction is also measured by quantitative calculation methods, and the result of this measurement is the customer satisfaction index.

After completing a commodity purchase, we all go through such a process, that is, before purchasing and receiving services, we first imagine an experience we should have, that is, an expectation.When we experience products and services in detail, we will have a feeling for the actual effect.In the process, if the effect we actually feel is much lower than our expectations, we will feel dissatisfied.On the contrary, if the effect we actually experience is similar to our expectations, and even feels a kind of unexpected surprise, then we will be satisfied or very satisfied.The formula we have experienced is: Satisfaction = Actual Effect > Expectation.

For customers, the higher the satisfaction index, the more they will recognize this product, and thus the greater the possibility of continuing to consume this product.Therefore, if an enterprise wants to develop for a long time, the first thing it should do is to pay attention to customer satisfaction, pay attention to customer loss, and pay attention to the development of new customers.

Potential customers are individuals or organizations that may become actual customers.Such customers may have purchasing interest, purchasing demand, or purchasing desire and purchasing ability, but have not yet entered into a transaction relationship with the enterprise or organization.

Potential customers include general potential customers and competitors' customers.The so-called general potential customers refer to customers who have purchase intentions but have not yet become any similar products or organizations, and customers who have been customers of an organization but have a relatively casual recognition of the brand when making purchase decisions; competitor customers refer to The customer groups owned by the company's competitors.

4. The Prince Charming That Can’t Be Grabbed——Commodities are Scarce

The fairy tale of Prince Charming takes root in every girl's childhood, and then in the best years of the girls, they are drawn by the plot of Prince Charming, and strive to look forward to and find their own Prince Charming.This is the root of the female Prince Charming plot.

Every girl has a princess-like dream in her heart, dreaming that one day, a handsome prince will marry her on a white horse, and then the two "lived happily ever after".Although the dream is romantic, the reality is very cruel.Although almost every girl has dreamed of "Prince Charming", although there are many white horses, not all of them are princes.In the face of the contradiction between the scarce "Prince Charming" and many girls, it is naturally very few people who can be married back to the palace by the prince.In contemporary times, Prince Charming refers more to the best man.But no matter in which era, Prince Charming is destined to be a scarce resource.

Interestingly, according to the scarcity of Prince Charming, many people put forward the opposite "cow and horse theory".The so-called cow here refers to a public man who is not as glamorous and attractive as Prince Charming, and is not as outstanding but honest and kind.

In fact, it is lucky for a girl to meet a cow, so please cherish it.However, "rare things are more expensive".The scarcity of Prince Charming makes girls more persistent when choosing.

Scarcity is also called finiteness, which means that relative to people's infinite desires, economic resources or resources to produce goods and services that meet people's needs are always insufficient.Any item that wants to become a commodity must have the characteristics of scarcity. Although air is important to people, it cannot become a commodity because it is readily available.

In economics, there is a very old story: Why are diamonds more expensive than water?In terms of use, diamonds can never be compared with water. Water is the source of human life. Without water, human beings cannot survive, but without diamonds, people's lives will hardly have any difficulties.The originator of economics, Adam Smith, answered this question because of scarcity.Because diamonds are very rare and rare, people are willing to pay a high price to obtain diamonds. However, water is everywhere, and people can easily get it, so it is naturally worthless.

(End of this chapter)