Matt Powell’s recent trip to the Glastonbury festival proved an unlikely source of inspiration for his next Thursday Night Insight. As Matt was to witness, the economic forces and marketing techniques which play such an important role in the success of huge multinational corporations around the world, can be just as relevant to entrepreneurs in rural Somerset…
A few weeks ago I made my annual trip to the Glastonbury festival in Somerset, England. For those that are unfamiliar, Glastonbury is one of the oldest, and largest, music and arts festivals in the world. It was founded by a farmer, Michael Eavis, in 1971, and is still run by Eavis and his daughter on their farm some 25 years on.
Each year 170,000 people make the pilgrimage to Worthy Farm to soak themselves in a diverse range of music and art and, of course, to be soaked by the rain. Over the 5 days that the festival runs, the farm owned by Mr Eavis turns into a chaotic bustling town (Europe’s most densely populated area for the days that it is running), with its own values and economy, and then packs up and goes home, leaving nothing but some muddy footprints and a few rogue tent-pegs.
This year, I noticed how Glastonbury offers quite an interesting and simplified insight into economics and marketing. Indeed, Glastonbury seems to have its very own mini-economy. From the wellington boot seller who hikes up his prices when the heavens open, to the way that spare cans of beer and packs of cigarettes replace £GBP as the currency of choice by the end of the 5 days.
The first time I noticed this microcosm of marketing and economics in action was when I was sitting opposite a row of stalls at this year’s festival. Two of these stalls, that were side-by-side, both sold doughnuts. One of the stalls had a large row of people queuing up outside it, whereas the other didn’t have a single customer. “How can that be?” I wondered. Surely no-one could have been to both of the stalls previously and found one of the stalls’ doughnuts to be more exemplary than the other? And both of the stalls had the same prices for their doughnuts. Then I noticed the stall names. The empty stall was branded “Doughnuts”. Fair enough. However, its more successful neighbour was dubbed “The best doughnuts in the world”. I’m quite confident that they weren’t the best doughnuts in the world – probably far from it – but the owner had a message that resonated with his target market, and given the choice, why would anyone choose ‘doughnuts’ over ‘the best doughnuts in the world’? Amusingly, the next day the ‘doughnuts’ stall was having a new sign installed (though I didn’t get to see what it said, I would hope it professed to at least be providing the best doughnuts in the universe) – its owner had realised that its marketing message had to be changed, and responded accordingly.
The second most notable bit of economics and marketing in action that I saw was to do, again, with a battle between two stall owners; a battle that highlights the influence of supply and demand quite well. One stall owner sold rubber wellington boots, the other sold summery hats and sunglasses. On one day the glorious sunshine had people flocking round the sunglasses and hats stall whilst the boot seller sunbathed on the grass outside his empty stall (that was sporting a ‘reduced’ chalkboard price sign). Later that evening, however, the inevitable deluge struck, and as the heavens opened, the sunglasses stall owner ran for cover, whilst the boot stall owner kept increasing the price of his boots as his stocks started to deplete due to the high demand. Of course, although both these vendors enjoyed high periods of sales, what they both really wanted was a steady stream of custom rather than the chunks of intense sales.
The next day the rain had stopped, but the mud still remained. The boot sellers of Glastonbury no longer had the hordes of people running to them waving their damp £20 notes above their heads; their market had dried up (pardon the pun). This didn’t stop one clued-up boot seller. The skies were blue and there was no sign of rain – so he knew he had to take his existing products to new markets. He took some rubber boots to the crowds of people in front of the music stages – the places that were still swamped with mud from the night before – and started successfully selling his product to his captive market. After selling his initial quota of boots, he returned a while later with more, and with a colleague in tow, who was carrying a box full of fold-out chairs. Now his customers could keep their feet dry, and rest their legs! Not only had the seller taken his existing product to a new market, he had diversified his product range and brought a new product to a new market.
All of the above can be summarised quite neatly in the model of the Four-Ps. The basis of the Four-P’s was devised in the early 1950s by Neil Borden, and was refined to the most well-known version by Jerome McCarthy in the late 50s. The Four-Ps is widely used in marketing to assess and streamline the marketing mix in order to meet organisational objectives and create a higher value relationship with customers. The Four-Ps are indicated below:
So how can we explain the Four-Ps in relation to the microcosm of activity that I witnessed at Glastonbury? Well:
- Product – Both the stall sellers had quite different products that were in high demand in polarised weather situations – one helped protect from the rain, one helped protect from the sun. Maybe next year they will offer a mix of products so they have an offering whatever the weather???
- Price – When the rain came lashing down the boot seller took note of the increased demand and raised his price accordingly. Likewise, when the sun came out and his demand dropped, he lowered his prices to ensure his product still sold.
- Promotion – The power of advertising was there for all to see as the bog-standard doughnut stall lost out to his ‘best doughnut in the world’-providing neighbour. In reality, aside from the large signs above their stalls, the product offerings will have been pretty much exactly the same.
- Place – When the demand for the boots diminished along with the rain, the boots-seller took his products to the areas of the festival site that were still muddy. If he had stayed at his stall he would have missed out on the new business that he found by taking his products to new markets.