Marketing - Taking Advantage of Consumer's Weaknesses

Recently, or actually since last year. I had come across a forum which post numerous complains and voices plenty of frustrations with a company (actually it had since changed and formed a few other companies with similar business model) that initially promotes business opportunity through Water Vending Machine (AirXX). At the first glance, I saw some posting of people (investors) voicing their complains and frustration and suspect that this is actually a scam. As I follow the forum, I actually saw new posting from investor that had invested in the company then only the start to search for more information in the website, when they saw the earlier posting then only they start to feel that they had been scammed. (They should had conducted some research before decide to invest.)

In actual live, there are plenty of such companies out there, with different sales and marketing tactics to induce potential customers to take up their offering. Some would provide discounts, free gifts, a chance to participate in a contest with huge value gifts like car, house and travel package.

In Marketing, it is actually very easy to capture the market place if you understand the 2 basic consumer psychology, this is "Old School" it had been practised for many years, and it still works if you target it correctly.

The perfect marketing tactics will target consumer psychology and the weakness is 2 area :

1. The Fear Of Loosing Out - As many Singaporean puts it as "Gia Shu"
2. Greedy

Take a look around you, or just flip through your daily newspapers, how many advertisement that you could easily identify with any one (sometime even both) of the above tactics, whether it is just a time limited discounts or free gifts.

OK, lets go back to the original topic. The so call Water Vending Machine Business Opportunity. I had first encounter this company, a few years back, I still remember at that time they just started the scheme. I was invited to a business preview with my partner. We went to a virtual office some where in KL. At that time, they just started to operate with the 1st Water Vending Machine in Taipan. The PIC, (Young guy) show us some photos of the opening and people lining up to purchase water. Then he start to talk about their brilliant business plan with "Multiple Source of Income". As I am from a MLM (as a top management staff) company, I knows immediately that this sound fishy. We play along, and he starts to explain the many ways that you can earn from investing in a water vending machine.

1. Passive income from the profit of selling chilled filtered water.
2. Income from selling plastic bottles
3. Advertising income, where surrounding businesses will pay to place advertisement on the vending machine.
4. (can't remember)
5. Referral income. This is the main part that I would explain further. As through out his explanation, we are both not convinced with the potential income. At last, he told us that their company has the perfect plan to pay us, so called marketing commission RM6,000 per machine it we help them to introduce this "Wonderful" business opportunity to relatives and friends. He told us, (at that time the investment is only RM28,888) if we could refer to him 5 investors which invest in their water vending machine, they will pay us RM6,000 X 5 = RM30,000. This means that we get our water vending machine for FREE and the water vending machine will there after help us to generate profits from selling filtered water.

This company actually uses both the marketing tactics which I had mentioned above, in fact they executed it quite perfectly. Those that took the bate (please be honest) are all, 1st, Fear of Loosing out with this so called Once in a Lifetime chance to be rich and don't have to work for it. 2nd, Greedy.

Remember this, as marketers will continue to use these tactics for many years to come. Never be greedy, there is NO FREE LUNCH. If there is, I and many people are already a rich man.