When talking to my kids about money, I love telling them about clever marketing techniques. In this short blog, I share one technique that is being used to get us to spend more money every day.
Teaching Children Mindful Spending and Business Skills
I believe sharing marketing techniques/stories with kids helps them to better manage their money in two ways:
Mindful spending: Once they understand a marketing tactic is being used, they are more likely to consider if they really want to buy the item (rather than just spending due to the marketing) - which will hopefully lead to less wasteful spending
Nurturing Young Entrepreneurs: I'm a big believer in kids trying to start their own businesses. As part of that, they need to learn how to sell and consider what marketing tactics they want to use. If they know more tactics, then they can potentially earn more money.
READ MORE: Learn why I believe it is so important for kids to learn to sell in my blog: Why and how to teach your kids to sell
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Marketing Technique: The Two Cola Machines Example
A local entrepreneur purchased a Coca-Cola vending machine and placed it near his office. Every day, he sold approximately 100 cans from this machine.
Then, he made an intriguing decision – he bought a Pepsi machine.
What was really peculiar was that he positioned the Pepsi machine right next to his existing Coca-Cola machine.
How many cans do you think each machine sold each day?
Most people, including my own daughters, assumed he would sell 50 of each or maybe 60 Coca-Cola and 40 Pepsi cans. They believed he was increasing his costs without boosting sales.
However, the reality was quite different.
Both machines sold well over 100 cans each, every day - materially increasing his overall profit.
Why did this happen?
When people see one Coca-Cola machine, they focus on:
"Do I want a Coke or not?"
When people see one Coca-Cola and one Pepsi machine, their brains switch to a different question. They now focus on:
"Do I want a Coke or a Pepsi?"
This means more people end up buying a can than when there was only one machine.
The tactic seems counterintuitive but it works. This is why you see many similar shops next to each other. Being close to the competition can actually increase sales for both.
READ MORE: If you want to teach your kids about more marketing tactics, check out my blog: McDonald's Secret Sales Tactics
Kids, Money and Marketing: Getting your kids using this marketing technique
As I mentioned at the beginning of this blog, sharing these marketing techniques not only helps your kids avoid impulsive spending but also equips them with valuable skills to earn more money if they start their own mini-business.
For example, rather than your kids setting up a lemonade stand on their own, encourage them to get their friends to set up a rival orange juice stand next to them.
More passers-by might stop to consider which drink they prefer to drink, rather than if they want a drink at all.
(And I'll venture to guess that some people will buy both to support both groups of kids).
By sharing these stories and techniques, you can empower your kids to make informed money choices and become budding entrepreneurs who understand the magic of marketing.
The other important message from this blog is that if we (as guardians) don't teach our kids what to do with their money, the marketing companies will gladly step in and show them how to spend their money quickly.
What are you going to read next to help your kids grow up wealthy?
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