When less is more? The contingent effect of product supply limitation in the release of new electronic products

Hui Li, Yunjie Xu and Lihua Huang

Journal of Retailing and Consumer Services, 2021, vol. 60, issue C

Abstract: In the market of consumer electronics, firms often limit their product supply to create a scarcity effect to entice consumers to buy their product. However, the outcome of such a strategy is not always desirable. In this study, we propose the product configuration level as a contingent variable that works with the supply level to affect the outcome of a supply limitation strategy. With a vignette-based experiment, we find that for a product with a superior configuration, consumers' purchase intention is boosted only if the supply is very limited. For a product with an inferior configuration, however, the supply limitation strategy does not work at any supply level. Therefore, the supply limitation strategy works only for a superior product configuration and at a fine-tuned supply level.

Keywords: Supply limitation strategy; Supply-generated scarcity; Cue consistency; Product configuration (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:joreco:v:60:y:2021:i:c:s0969698920314405

DOI: 10.1016/j.jretconser.2020.102433

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