How Shumpterian as can be!

Rick Giles's picture
Submitted by Rick Giles on Mon, 2006-03-27 10:53

Joseph Shumpter was a funny old sod, also a very clever economist. An Austrian Economist actually, broadly speaking. Austrian Economics is a school of economic thought, as is Marxism or Monetarism or Classicism or Keynesianism for example. The reason this way of thinking about economics is called 'Austrian' is because its origionators hail from Austria. Go figure.

One of Shumpters economic ideas was that of the product cycle.

It goes a little something like this. When a new product first comes into being it is only sold to a handfull of pioneering consumers, rich folks who can afford it probably. New Zealand is a good test market for things like this it is said. If we like the new cheesburger or softdrink or mobile phone accessory then that's a sign it's worthwhile investing more in the product and and offering it to a larger market.

Next stage, the product goes mainstream and satiates demand.

Next, the product becomes standardised and cheep. The people who were holding out now buy the product, thus the producer wrings the last few sales dollars out of his product- milking it for all it is worth.

Next though, clever manufacturers and marketing agencies work to postpone the day when the product has become yesterday's fad, yesterday's cool, yesterday's news. Even after this happens they will try to revive it, bring it back into fashion. Somehow they manage to do this over and over again. They make old sunglasses from the 1920s cools again, they make 1960s bell-bottoms cool again. They revive ABBA. They make 'retro' into a virtue. Put your out-of-fashion clothing at the back of the wardrobe and wait around long enough, it'll all come back into style again- just ride out the product cycle!

For as long as anybody can remember, hoolahoops, and yo-yos and marbles have stormed the school playgrounds. Then the fad dies, time passes, the toys are discarded. Next thing you know some clever marketers have found a way to make them cool again, as cool as ever- and you have to buy them all over again.

In New Zealand at this very moment it is happening again. Not a yo-yo craze (give it time) though, no. Marbles are back in style! I got a call from a mate back in Auckland asking that I send over some of these new B'daman toys please, because the kids are mad for them but they're not yet avaliable in stores. Well they are now, within the last couple of weeks they have hit the shelves at Kmart stores if not elsewhere.

And what's a B'daman? I don't really know! But any 8 year old Kiwi will explain it to you. Last time I looked it was 'Pokemon' that "my" Auckland kids knew back-to-front. Pokemon is just a game of cards- another fad that rises and falls with the product cycle. The B'daman merchandise is marbles though, plain and simple.

How did the entrepreners make kids extatic and get parents paying big bucks for glorified marbles? Well, at 3:35pm on TV2 there's a TV show all about it for one thing. And for another it's not just glass spheres- there are plastic doohickies and rules and stories to learn. However, at the end of the day it is just marbles.

It's always just a hoola-hoop, just card games, just marbles, just a yo-yo, or whatever. It's as Shumpterian as heck!

I wonder which of the old favorites it'll be next, and I wonder how they'll manage to make it popular again. Rest assured, an entreprenerial imagination is already working on the solution.

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