Tuesday, October 03, 2006

Elmo ruins WalMart's rep!

Remember the Tickle me Elmo that came out nearly 10 years ago? How about all the fuss caused by the shoppers in hopes to get one of their own? Just last month, Fisher Price announced the development of a new toy, the T.M.X. Elmo. This toy laughes uncontrollably, bends at the waist and slaps it's knee when tickled. The date to set on shelves was September 19, however, the item is already scarce. As people lined the doors waiting for opening at a Walmart in Chicago, they bacame disappointed upon the discovery that this particular Walmart hadn't even been supplied the product. It is believed that the shortage was on purpose, to keep the demand on a rise, however, Fisher Price completely denies that is the case. The biggest problem comes from angry customers towards the retailers. Although Walmart isn't to blame for the shortage, it is most common that people "see them" as the bad guy in the case. Fisher Price is only dealing with the retailers, the retailers, however, are dealing with the mean people. Although this is a problem now, it is assured that Fisher Price will increase production of the new hit toy in order to meet demands for the upcoming holiday season.
Do you think it was Fisher Price's intention to produce a shortage? Other than maintaining demand up, are there any other reasons that this would be the case? I can't believe that it would be a logical raeson to limit production, unless it is a marketing tactic used to get the name of the product out there and more well-known before the big shopping season. Maybe with all the fuss, people will show even more of an interest when the product is more readily available for purchase.


BBechtel said...

From an article I had read previously, I know Mattel and the developers of the T.M.X. Elmo keep the project super secretive and built up a lot of hype before the product was released. The Elmo toy was kept such a secret no one was able to see the product until it hit the shelves on the 20th of September. It was a highly anticipated product that created a high demand. It was an intentional strategy on Mattel's part to create an uproar to rival the orginal introduction of Tickle Me Elmo 10 years ago. Although every year since the orginal a new Elmo is intorduced, none had been as successful as the orginal. T.M.X. Elmo is hoping to top the orginal Elmo's sales.

JP Clift said...

It is quite possible that Fisher Price's intention was, in fact, to produce a shortage, but why would this company decide to create a shortage? According to the idea of market disequilibrium, a shortage is defined as a position in which quantity demanded is greater than quantity supplied. If this is the case, then the company might reason that it would be more profitable to "fake" a shortage to try to increase the demand while raising the price at the same time, therefore maximizing profits for the seller. Deadweight loss is now a by-product of the company's greed, but who said economics was scrupulous anyways?