What is Scarcity Marketing?
Discuss about the Tourism Economics and Airline Product.
In many cases and instances, it becomes vital for a company to determine how much of a product or commodity would be available in the market at a specific time. As a marketing strategy, companies can choose to make their product available to only a few customers. Scarcity marketing is essentially using the fear of shortage to sell more. In terms of providing ideas about the market stock of a particular item, scarcity marketing is a very important tool (Koch and Benlian 2015). Market research has established the fact that customers attach more value to items that are short in quantity in terms of availability in the market. Two broad methods form the basis of this marketing tool:
- An item is short in supply and after it runs out, it will not be available anymore.
- The item in question is available only in that period of time and shall not be in supply in the future again (Kwon et al. 2016).
The marketing tool is forged upon the basic premise of the idea that people want more the things that are difficult to obtain. A very popular and common example of scarcity marketing is selling of an item through an invitation-only event: making an item exclusive. This involves making the potential customers of any particular commodity understand that there is a shortage in supply of the same and there is only limited time to act upon it (Spanjol et al. 2015). The aim of this technique is to create a sense of “urgency” using aggressive call to action methods and making the people scared that the item will not e acquired by them if they do not act fast and buy the product.
It is not clear when has this technique been first used by marketing companies or organisations, but it is sure that it has been used for many years. Disney Vault is one of the most popular and commonly referenced instances of this marketing strategy which started in the 1980s. In a brilliant marketing scheme, Disney Studios Home Entertainment started to issue their films as limited editions and urged the consumers to buy them before they were forever kept in the “Disney Vault”. The fact that these films were all limited edition and would not be available several years before it would be released again made the customers want to act fast as soon as a video was released.
Apple is yet another company that uses this technique very cleverly. Promoting items as exclusive, bringing out services and privileges that entail a time bound availability clause to them is an effective way to sell products, despite them being priced at a level that may often be higher than the market price of the products that are similar in nature.
Examples of Scarcity Marketing
There are several advantages of using scarcity marketing as the driving tool to boost the sales of any product, the primary advantage being able to position the products and services as a commodity. This single aspect helps to throttle the perceived value of the product to go higher, as well as establishing the fear of the limited availability (Koch and Benlian 2015). Scarcity of the product that is being sold also helps to retain the customer’s attention around the product through creating an interesting background for the product. Scarcity marketing can help to create a cult following of an item, which at times sees people keeping track on the availability of the product in the future and buying it again when it is. Scarcity marketing tactic is used heavily by online retail companies that always prompt the customers to buy things quickly by saying that the stock availability of the product is either depleted or diminishing rapidly and cannot be found again anytime soon (Koch and Benlian 2015).
There are many ways of effectively using and implementing the scarcity marketing tactics.
- Limited-number tactics: People value those items that have recently become less available in the market over a product that is abundant and can be readily purchased any time they wanted to (Spanjol et al. 2015). Online retail shops often also tell the customers about how many people are currently viewing the product, which makes the fear of them buying the product to be set in even more and the customers buy the item even faster, depending upon their needs.
- Out of stock: Many products are marketed as being available in a particular size or design, while any other form of the product is rendered as out of stock. This is an useful way to boost sales.
- Limited time tactics
- Holiday special sales on products
- One of kind specials: One of the most used forms of scarcity tactics and often the most useful one.
All of these strategies are used by different industries for different products, which all have different levels of effectiveness for them.
This is fairly easy idea to comprehend: all forms of communication and messages are linked together. At a very core level of the idea, lies the objective of linking every form of promoting tool together so that they are working together in harmony and that in turn ensures the most effective marketing for any product.
Integrated marketing is a strategy and a tools that is much more than a popular and catchy slogan for a company or a product or nice looking logo; it is based, rather on the simple idea that the marketing whole is much greater than any of its fragmented parts (Kitchen and Burgmann 2015).
Through successfully unifying every form of promoting skills and marketing tactics across all channels, an integrated marketing campaign can present a consistent and cohesive message to the customers that help to boost the brand image and increase market reputations of a company or a commodity. This helps immensely in terms of improving the effectiveness of the marketing the teams and their abilities to communicate and deliver a message about the product or service, as well as the overall name of the brand in the industry.
Since the term first being coined by the American Association of Advertising Agencies, integrated marketing has undergone rapid changes since 1989. The term was once defined by traditional and mainstream media channels as direct mail and broadcast. Modern technological advancements and other new forms of tactics are still redefining the marketing strategies and this entails that the integrated marketing systems and strategies are still evolving and encompassing new aspects and ideas every day under its broad umbrella term (Andrews and Shimp 2017). This has resulted in consumers being exposed to media and information regarding products all the time and being connected to the people almost every possible second. Sales are helped like never before and marketing tactics have developed a number of new methods which were previously unimagined of even by the most prolific of the marketing giants and geniuses.
IMC explicitly and exclusively focuses on the customers: the single biggest advantage of the system and often its biggest source of reliability. Furthermore, it is both cost-effective and efficient for brands and organisations alike. Using the IMC ensures that all forms of marketing and communication pieces are properly connected and ushers in the power of each of these attributes to guarantee that the customers of a brand receive consistent, powerful and relevant messages (Kitchen and Burgmann 2015). Being constantly notified about the brand and its products is a greatly beneficial thing and helps the customers to be updated about the new developments and products, which is very helpful when making a new purchase decision.
The effectiveness of the IMC goes beyond the simple communication tools and other levels integration like horizontal, vertical, internal and external are incorporated in it to strengthen the IMC to an even greater extent. These are elaborated below.
- Horizontal integration happens across every area including the marketing mix and business functions. The production, finance, communication and distribution of every product should work together and must be aware of the fact that their actions send meaningful message to the customers.
- Different departments like direct mail, sales and advertising can help each other by adopting data integration and this requires for a marketing information system that collects and distributes relevant data throughout every department of the organization.
- The term vertical integration refers to the idea that the objectives of marketing and communications must support the objectives of the higher level corporate structure of the company and must be aligned with the corporate missions.
- Internal integration, for any organization, means marketing within the organization: keeping the staff aware, motivated and informed regarding any new developments, advertisements of the company that is going to be launched into the market, as well as the new corporate identities and new service standards. The staff should also be informed by the management about any new branches, acquisitions, partnerships and so on.
- External integration requires the organisation’s external partners like the advertising and public relations agencies to work together closely and successfully deliver a solution that is cohesive and seamless and has a clear and definitive message.
IMC helps to forge the entire communications of the company around the customers and helps them to go through the different stages of the buying procedures that can often be very tricky and not clear by the layman who is using the services for the first time. It also increases profits by increasing and optimising the effectiveness (Camilleri 2018). In a world that is always on the move, a clear, consistent and consolidated message helps to deliver the facts and information to the consumers amidst all the thousands of advertisements that the consumers are bombarded with every day.
Koch, O.F. and Benlian, A., 2015. Promotional tactics for online viral marketing campaigns: how scarcity and personalization affect seed stage referrals. Journal of Interactive Marketing, 32, pp.37-52.
Kwon, W.S., Byun, S.E., Katz, J., Deshpande, G. and Forsythe, S., 2016. Scarcity Effects on Consumers' Affective, Cognitive, and Conative Responses: Moderating Role of Shopping Orientation.
Spanjol, J., Tam, L., Qualls, W.J. and Bohlmann, J.D., 2015. Enacting change in strategic marketing decisions: the role of regulatory focus in teams. In Marketing in Transition: Scarcity, Globalism, & Sustainability (pp. 37-37). Springer, Cham.
Andrews, J.C. and Shimp, T.A., 2017. Advertising, promotion, and other aspects of integrated marketing communications. Nelson Education.
Camilleri, M.A., 2018. Integrated Marketing Communications. In Travel Marketing, Tourism Economics and the Airline Product (pp. 85-103). Springer, Cham.
Kitchen, P.J. and Burgmann, I., 2015. Integrated marketing communication: Making it work at a strategic level. Journal of Business Strategy, 36(4), pp.34-39.
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