Jun 22, 2022
In General Discussion
When Bill Clinton was campaigning for the presidency against George HW Bush in 1992, Clinton campaign strategist James Carville Image Masking wrote three slogans on a whiteboard in the "war room" of their campaign headquarters in Little Rock, Arkansas. Principles of Economics This is Economics Stupid Clinton War Room 1992 Fear and slogans on the '92 campaign trail The slogans were meant to keep Clinton's campaign team focused on the issues that matter most in this election. A slight variation on the most famous of these phrases - "The economy, stupid" - has become one of the most Image Masking definitive political campaign slogans of modern times (and arguably helped Clinton win the presidency), and which still resonates with voters and political hopefuls alike. Now you might be wondering what this has to do with marketing. Although marketers have a lot to think about, the economy as a whole often takes precedence over more Image Masking immediate concerns. However, understanding the principles of economics – and how people respond to them – is essential for marketers in today's highly competitive business environment. Simply put, "It's the economy, stupid." In his best-selling 1998 textbook, The Principles of Economics , Greg Mankiw identified 10 defining principles of modern economics. In today's article, we'll look at some of these principles, the psychology behind them, and how you can leverage these principles in your marketing campaigns. Principle 1: People Image Masking must compromise Unless you studied economics in college, you might not be familiar with the term “opportunity cost.” Principles of the Economic Opportunity Cost Explanation However, you've probably heard the expression, "There's no free lunch." In case you were wondering, the phrase is believed to have originated in the late 19th century, when saloons often offered customers "free" lunches of savory food in order to entice people to buy drinks. The Image Masking principles of economics are not such a thing as a free lunch David Caruso says it as it is. Opportunity cost is the concept that in order to acquire something we want, we usually have to give up something to get it. For most marketers, the most common type of opportunity cost to overcome with their marketing plans is known as explicit cost; if you charge $250 for a one-year subscription to a software service, the prospect faces the explicit Image Masking opportunity cost of not being able to purchase other goods or services with the $250 they spent on getting subscribe to your software product. Luckily for marketers, this is one of the easiest economic principles to exploit. It's the positioning, stupid Since the explicit opportunity costs of doing business are something all consumers are aware of, leveraging this Image Masking principle and overcoming potential hesitation is as simple as making the customer feel like they are getting the best deal.