Scarcity Marketing Research Paper

Scarcity Marketing: Less is more

Abstract

Scarcity is a pervasive aspect of human life and is a fundamental precondition of economic behaviour. Marketers have been using various scarcity appeals to persuade the customers. Lot of research has already been done that how scarcity affects the consumer decision making process, perception of consumer about the marketed product or service, relationship between perceived scarcity and perceived expensiveness etc. Various theories of economics and psychology are also been written to explain the concept of scarcity and its effect. However very few studies have been done on how scarcity marketing (techniques) can be applied practically through various ways and what are the possible traps or situations

Product and services must be present at affordable price on required place at right time and in right quantity. If we are short by one quantity, we have lost a customer and financial we have lost the opportunity to make the profit. Well that’s very basic concept can be referred in any marketing book on very first page. But can we do the reverse process which is probably not mentioned in many formal books of marketing. Artificially create scarcity, fuel demand and then fulfill it. Some scholars and researchers have also categorized scarcity broadly into two types – Supply related scarcity and demand related scarcity, whose names are self-explanatory in themselves. Supply related scarcity- can be further classified into Limited Quantity scarcity (LQS) and time related scarcity – Limited time scarcity (LTS). The approach one can adopt in each of above cases/situations will differ from one

Uncontrolled distribution: An uncontrolled distribution can make your scarcity marketing campaign a joke. Make sure it is in line with strategy.

2. Heighted attention: Scarcity will almost always result in heightened attention of customers, peers, media and almost everyone. Probably that is one reason why scarcity marketing tactics are successful as they are bound to get attention with very less efforts. But the coin has other side as well. Since almost everyone is watching you closely, the effect of one mistake will then be amplified to large extent.

3. Over doing scarcity: Over doing scarcity can work against you. If people who are seeking to be your customer consistently finds it difficult to purchase your gain for a number of times, they may start looking for possible alternatives which may result in competition.

4. Targeting deprived people: We don’t want to or like to lose what we have. In fact, we will make extra efforts outrageously for protecting what we have. Let us understand this with an example. For example, government bans pet dogs; then probably people will start revolt and will come on streets holding rallies, shouting, opposing it on social media, news channels and various other possible mediums. On the other hand, if you bring legislation that keeping white elephant as pet is not allowed, people will do nothing since people know that they cannot afford it anyway. So the basic psychology of losing something substantial or great