An empirical study of scarcity marketing strategies: Limited-time products with umbrella branding in the beer market

Masakazu Ishihara (), Minjung Kwon () and Makoto Mizuno ()
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Masakazu Ishihara: New York University
Minjung Kwon: Syracuse University
Makoto Mizuno: Meiji University

Journal of the Academy of Marketing Science, 2023, vol. 51, issue 6, No 10, 1327-1350

Abstract: Abstract We analyze empirical aspects of the limited-time product strategy—introduction of a new product that is available only for a limited time—that involves the use of umbrella branding. Despite the popularity of such a marketing strategy in many consumer packaged goods categories, little empirical work has studied how consumers react to this scarcity marketing in their actual choices. We use individual-level transaction data from the beer market and model consumers’ beer purchases using a multiple discrete-continuous choice model. The proposed model captures the patterns of consumer choices in response to the limited-time product and the asymmetric sales spillover effects between a parent product and a limited-time subproduct. Using the model estimates, we quantify the effects of incorporating a product’s limited-time nature and adopting an umbrella brand for a limited-time product. Our analyses indicate that (1) the product’s limited-time nature is associated with a rapid jump in demand in the launching period; (2) the return from store coverage for limited-time products decreases over time; and (3) umbrella branding for limited-time products increases the brand-level demand despite the cannibalization of the sales of a parent product. Managerial implications about the nature of perceived scarcity associated with the limited-time product and the effective targeting and distribution strategy are discussed.

Keywords: Scarcity marketing; Limited-time products; Umbrella branding; Multiple discrete-continuous choice; Beer (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s11747-022-00899-y

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