Rarity, Product Differentiation, Species and Brands

When you read or hear,

• The waitlist for Rolex Daytona is minimum five years and may go up to ten years
• Almost a similar thing went on for Hermes Birkin. You couldn’t simply go to the store, walk up to payment counter and walk home with a Birkin. It was even difficult to get on to their wait list.
• Ferrari shipped only 7200 cars in 2011 which stood at about 12000 cars in 2021. Ferrari Purosangue’s waiting is two years.
• Even a mundane sneaker like Nike Dunk SB Low Staple NYC Pigeon and Nike Air Force 1 Low Kith are traded on Stock X simply because they are not available
• The Montblanc Taj Mahal is retailed at about $2 m as it’s a work of artistry, exquisite material and limited edition
• Watchmaker H Moser & Cie’s produces about 2000 timepieces in a year and price ranges between Rs 14, 34, 000- 2, 77, 20, 000

It is easy to spot the commonality across these brands. First, they command astronomical prices. The dictionary explanation of the word command is connected with authority and control stemming from higher position. It is about giving order or getting someone into subservience or devotional surrender. The brands in question get their customers into parting with something precious akin to sacrifices made in religious orders. Second, these brands or products are highly restricted in availability and are in short supply and restricted to a chosen few. The lesser beings shall never be able to commune with the higher order.

So, what’s going on? These are instances where economics and psychology intersect to create an extraordinary value.

Economics: Simply put, shortages or scarcity create price increases. The scarcity could be natural (something that’s not available) or artificial (by controlling supply). Consider diamonds.  Are they scarce naturally or is their supply  artificially restricted. Rare earth materials are short in supply but have wide applications in electronics. How about aged whiskeys or wines? Long period of storage renders them scarce andthat results in high  prices. The Macallan 1926 sixty-year-old rare Scotch was sold at an auction for $ 1.9 m. Let us look at the working of rarity principle in the following cases:

•  Monalisa by Leonardo da Vinci
• A watch made of steel obtained from Titanic wreck
• A visit to depths of ocean on Ocean Gate

Scarcity or rarity is the price pusher. Abundance is a desire killer. Owning something rare is not purely about possession. It is about transformation. In a world where DNA of any two individuals on this planet is identical to the extent of 99.6 percent imagine the forces that would be at work for people to express themselves as different species than the one they are surrounded by. The rarity of things psychologically seems to create this sensealbeit in imagination. Uniforms are disgusting. So, students typically use other means to set themselves apart- bags, pens, hair styles and tiffin boxes.  Variety in supermarkets is nothing but gateway to differentiation at the base level.

Psychology: Why do people want to obtain what is rare? There is a definite pull of what can’t be had or is very hard to get. The desire is inversely related to availability. Owning something rare (gem, design, antique, craft)  gives a route to break away from what everyone has fueled by a desire to set oneself apart from the pack. The strategies could be many:

• Power and status: Expensiveness of an artifact may confer power and status. Consider a pen hand crafted and made of precious materials. A Montegrappa or Van Cleef& Arpels pen can cost upwards of $500000. Only a few can afford luxury yachts because of their prohibitive prices (JP Morgan had a yacht, ‘The Corsair’) and it is this association of the vessel with wealth that shifts its meaning from a motor boat to a class marker.
• Taste: Uniqueness stemming out of rare workmanship may act as signifier of tastethat sets you apart. It is a nuanced way of creating distinction. Not everybody is educated or encultured to have an evolved sense for appreciation of finer aspects such as the music of Mozart or the melting clock by Dali or intricate craftsmanship of Harry Winston. The connection between craftsmanship and exquisite master creations in fields like painting, jewelry, furniture, watch, saddle is chronicled in histories of kings and nobles. Taste is a class or social construct and is a powerful driver of distinction. It signifies higher aesthetic sense found in a few with the right cultural antecedents. So if you have taste you may settle for a Breguet for its history and craftsmanship.
• Pride:Rarity is exclusionary. Only a few chosen ones can own rare pieces. This sense created by limited editions has a catapulting effect by which an object is transformed into reward or prize ortrophy. One experiences pleasure and deep satisfaction upon winning or achieving something that’s out of bounds. The nation feels pride when an athlete wins gold medal at the Olympics. It is deeply gratifying. It confers honor, satisfaction, respectability. Brands thus become resources in identity construction and signification. A medal on the chest of a soldier is not only signifier of rank and achievement but also a boost to his idea of self. A brand of televisions promoted itself on the proposition, ‘neighbor’s envy owner’s pride’. The idea was its technology produced better picture quality consequently fanned envy amongst other TV brand owners.

• Self reward: Consider brands calling out to their customers: ‘You come a long way baby’ (Virgina Slims) , ‘Have a break, have a Kitkat’, ‘ Because you’re worth it’ (L’Oreal). Common to these slogans is the inducement of underlying motivation of self reward. A Reward is acknowledgement of achievement but by others . School rewards you when you get the best score. Self rewardinginvolves self to self gifting upon achieving a milestone. It may be humble coffee or a chocolate. The Cadbury Bournville said, ‘Eat it if you have earned it’. It is an important means of self care, self encouragement and fuels motivation. Will the nature of reward change from humble chocolate to something rare if the achievement is remarkable and exceptional? The reward shall correspondingly need to be correspondingly rare in equal measure. So if you have won an Oscar, the wrist shall adorn a watch as rare as the trophy.

Product differentiation or unique selling proposition is a tried and tested tool that brands use to create inequality in order to stand out from the pack of competitors. Rarity is not about product differentiation. It is about creating differentiated customers or shall we say a different species.