Impact of Quantity Scarcity and Time Scarcity Appeals on Consumers’ Response: Role of Need for Uniqueness and Deal Proneness

Abstract

The promotion of products and brands has become increasingly important for marketing managers over the years. One of the commonly used ways to promote a product or brand is through scarcity appeal. Scarcity appeal is defined as an offering that suggests limited availability of products or brands (Eisend, 2008). There are two types of scarcity appeal, namely, quantity scarcity and time scarcity (Bae & Lee, 2005; Cialdini, 1993). Quantity scarcity is defined as a promotional appeal where customers are informed that a promotional scheme are applicable to a restricted quantity such as ‘only on limited quantity’, ‘till the stock available’,‘one per customer’ etc. Time scarcity is defined as a promotional appeal that are available to customers for a restricted period of time such as ‘offered price is valid for 7 days only’ and ‘limited period offer’. Therefore the term ‘scarcity’ in this study will be used to refer to those consumers’ sales promotions schemes and activities which provide restrictions in availability of offer either as quantity restricted offer or time restricted offer.

Literature suggests that scarcity appeal enhances value of anything that can be possessed, is useful to its possessor, and is transferable from one person to another (Brock, 1968; Fromkin, 1972; Worchel, Lee & Adewole, 1975). Studies also suggest that scarcity appeal enhances consumers’ positive attitude towards products and purchase intention (Bae & Lee, 2005; Snyder,1992; Wu & Hsing, 2006). According to Lynn (1991), the impact of scarcity messages on behavior is robust across studies. Existing studies on scarcity appeal are mostly focused on scarcity due to product (Eisend, 2008; romkin, 1970; Jung & Kellaris, 2004; Worchell, 1992; Wu & Hsing, 2006;) but the studies related to scarcity on a promotional offer are limited and a need to research this area has been suggested (Aggarwal, Jun & Huh, 2011; Bae & Lee, 2005; Inman, Peter & Raghubir, 1997). Moreover studies on scarcity appeal due to offer are limited to highlight the impact of quantity/time scarcity appeal as compared to no scarcity appeal on attitude and behavior of the potential customer. This study explored differential response of consumers to quantity scarcity appeal and time scarcity appeal on promotional offer with respect to two individual level traits, namely, the need for uniqueness and the deal proneness. This study also explored whether the impact of quantity/time scarcity appeal as compared to no scarcity appeal on consumer’s response is influenced by the level of need for uniqueness and deal proneness traits.

This study seeks answers to the following questions-

Q1. Do quantity scarcity and time scarcity appeals impact consumers’ attitude and behavior differently? Q2. Do benefits sought by consumers in response to quantity scarcity versus time scarcity appeals differ for products belonging to similar category? Q3. How does individuals’ need for uniqueness influence the impact of scarcity appeals on consumer’s attitude and behavior? Q4. How does individuals’ deal proneness influence the impact of scarcity appeals on consumer’s attitude and behavior?

Two studies were conducted to investigate the above questions. In first study the impact of need for uniqueness on quantity scarcity appeal as compared to time scarcity appeal was examined. In the second study impact of deal proneness on quantity scarcity appeal as compared to time carcity appeal was examined. Both the studies were conducted for two product categories, namely, a symbolic product and a functional product. The specific product selected to represent these product categories were laptop (a representation of functional product) and wrist watch (a representation of symbolic product). These representative product were identified based on inputs from a sample of respondents.

In order to collect data to answer the research questions a survey based experiment method was Used. Four full factorial designs were conducted for each study. In the first study need for uniqueness and scarcity types were treated as independent variables in second study deal proneness and scarcity types were treated as independent variables. Dependent variables in both the studies were purchase intention, attitude toward product, perceived symbolic benefit and perceived functional benefit.

The results of the study provided different insights of consumer behavior towards scarcity appeals. It was found that response to time scarcity and quantity scarcity was not significantly different across difference product category type. The findings also suggest that the response to quantity/time scarcity appeal as compared to no scarcity appeal were found to be different. However this was found valid only for respondents with low need for uniqueness and respondents with high deal proneness. It was also found that when locus (or a part of locus) of decision making lies outside the consumer, they prefer time scarcity appeal over quantity scarcity appeal, whereas when the locus of decision making lies within the consumer, they prefer and respond favorably to quantity scarcity appeal than time scarcity appeal. The results suggest that impact of scarcity appeals is dependent on product category and individual traits.

This study provides a comprehensive analysis of three types of scarcity appeal for two individual traits and thus extends the understanding of the ways consumer’s associate different meanings with products and brands because of scarcity appeals given on promotional offers. The comparison of the impact of scarcity appeal on two different individual level traits provides theoretical insights to scarcity appeal literature. The study also points out the key issues which might be helpful for managers in designing different kinds of promotions related to scarcity appeal.