Academic journal article Social Behavior and Personality: an international journal

The Effects of Scarcity Appeal on Product Evaluation: Consumers' Cognitive Resources and Company Reputation

Academic journal article Social Behavior and Personality: an international journal

The Effects of Scarcity Appeal on Product Evaluation: Consumers' Cognitive Resources and Company Reputation

Article excerpt

Marketers often use scarcity appeal to influence consumers by making statements such as "Hurry, limited quantities," "While stocks last," "Few tickets left for this event," "Limit of two per customer," or "Only 25 items per store."

Past researchers have indicated that scarcity generally has a positive effect on product evaluation (Dai, Wertenbroch, & Brendl, 2008; Eisend, 2008; Inman, Peter, & Raghubir, 1997; Jung & Kellaris, 2004). That is to say, when only limited quantities of a product are available, consumers generally tend to evaluate the product more favorably. This is because consumers infer that scarcity is a consequence of high demand for the product, which, in turn, the consumer infers has arisen from superior value offered by the product (Cialdini, 2001). This is a robust effect, which has been observed to apply to a range of products, including laundry detergent, toothpaste, soda, wine, cookies, sunglasses, and paintings (see e.g., Lynn, 1989; Verhallen, 1982; Verhallen & Robben, 1994; Worchel, Lee, & Adewole, 1975).

In the present research we extended the existing literature by identifying a new mechanism - and, correspondingly, a new boundary condition - for the effect of scarcity on product evaluation. Specifically, we argued that consumers may interpret scarcity as either an indicator of product value or as a sales tactic.

Literature Review

Scarcity

Scarcity can be defined as insufficiency of product supply or time of availability (Brock, 1968; Brannon & Brock, 2001). Previous researchers (Eisend, 2008; Inman et al., 1997; Jung & Kellaris, 2004; Worchel et al., 1975) have generally reported finding that scarcity has a positive effect on perceived desirability of a product, or on product evaluation. For instance, Worchel et al. found that cookies in scarce supply were rated as more desirable than cookies in abundant supply. Similarly, Verhallen (1982) and Verhallen and Robben (1994) showed that when people perceive recipe books as being less available, they show greater preference for those recipe books. Lynn (1989) also demonstrated that when paintings are perceived as scarce, people find them more desirable than paintings they perceive as being readily available.

Why does scarcity enhance consumer perception of the value of a product? Researchers such as Inman et al. (1997), Cialdini and Trost (1998), and Cialdini (2001) have argued that scarcity functions as a heuristic cue for product value. A logical reason for scarcity is that other consumers are buying the product in large numbers. Such high demand, in turn, should arise only when the product is considered valuable by customers (Lee & Ahn, 2012; Lee & Seidle, 2012). When these two factors are taken together, this line of argument indicates that scarcity is a market-based signal of product value. Past researchers (see e.g., Inman et al., 1997; Lee & Seidle, 2012) have, thus, suggested that consumers interpret scarcity as an indicator of product value, an inference that leads to a positive effect of scarcity on product evaluation. In this paper, we have extended past research by proposing that consumers may also interpret scarcity as a sales tactic, and that such an inference may influence the effect of scarcity on product evaluation.

Scarcity as a Sales Tactic

Recent trends suggest that marketers may frequently restrict the quantity of product being offered in a given retail outlet or sales territory, regardless of actual demand, to create a false sense of urgency. For example, statements such as "Hurry, only few items left," or "Limited quantities" need not be based on actual demand for the product, but could, instead, be deployed arbitrarily by marketers to stimulate consumer interest. Consumers could interpret scarcity as a sales tactic designed solely to drive sales. The latter view is consistent with persuasion knowledge literature, in which it is argued that consumers have become increasingly knowledgeable about persuasion techniques used by marketers (Campbell & Kirmani, 2000; Darke & Ritchie, 2007; Friestad & Wright, 1994). …

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