Sales: guns, meals, widgets
18/12/2012 § 7 Comments
In all the articles and posts I’ve read about guns over the last few days, I haven’t seen much on the economics. It is useful to remember that guns, bullets, and accessories — whatever they may symbolise — are also just products that are designed, manufactured, marketed, and sold. Economic theory about mythical widgets applies to guns, too.
I have read enough about the small-arms industry to know that I don’t know. So, let’s talk about restaurants.
Let’s say that you have a family restaurant in a medium-sized town. It’s a dinner restaurant, open only in the evenings. Thursday, Friday, and Saturday nights are your big days. The rest of the week, you are open more for show than anything else.
One day, you decide to increase business. Maybe you have a new child, maybe the rent has gone up — the reason doesn’t matter. What do you do?
First, it is important to remember that existing clients are more valuable than potential clients. You’ve got a bit of a capacity constraint — you couldn’t do more seatings on Friday or Saturday, and people can eat only one meal at a time. So, you try to get your existing patrons to eat out on Mondays and Tuesdays. On the menus, you place little notices: ‘Two-for-one Tuesdays!’, ‘Mondays are hard enough already — we’ll cook for you!’
Maybe that doesn’t generate enough business. So, you diversify. Wednesday nights become Quiz Night or Bingo Night or Open Mic Night — something different to appeal to a new market segment. These people wouldn’t usually go to a dowdy family restaurant, but Wednesdays are a bit quiet in town and it’s something to do.
Let’s say that this town still has blue laws and businesses are closed on Sundays. You spot an opportunity. Sunday is the one day that families are actually together; during the week they are rushing off to their own activities and can’t eat together. If you could get the law changed, you would have a new market. So, you petition the city council.
Now, what’s the pitch? Do you say, ‘Hey city council, I want to open on Sundays so I can make more money’? Of course not. That would be crass and grasping and socially inappropriate. How about, ‘We want to take the burden off Mum so the whole family can eat together’, or ‘Some people work on Friday and Saturday nights — they want a chance to eat out with their families, too.’ You position yourself as providing a service, as benefiting the community, as supporting family togetherness.
So it is with guns. Hunting is a declining activity in the US. It requires one weapon at a time. Maybe someone hunts a lot of different animals and needs a total of, say, three weapons. And guns, because of what they do (contain small explosions), need to be sturdy. A friend of mine used to use an 80-year-old .22 rifle from his grandfather. There’s not a lot of turn-over in that kind of market.
Self-defence! That represents diversification. Existing customers now need new products for a different use. New customers — people who have never hunted — can also be attracted. Bigger market, more sales.
But not everyone wants to walk around with a police pistol on their hip for all to see. Small, discreet pistols are a new product to appeal to a different group of customers. The problem, though, is that concealed carry isn’t always legal. Just like the restaurant in my story, the weapons manufacturers have an economic interest in getting the laws changed. Of course, they aren’t going to say it’s about markets and profits — that would be crass and grasping. So, instead, it is about freedom and families.
Whatever else guns are or represent, they are also products. The companies who make them are trying to increase their customer base, increase sales to new and existing customers, and make money.