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Scarcity Principle in Marketing

Scarcity Principle in Marketing

Researchers did a study, they brought 200 cartons and put 150 cartons on one table and 50 on the second table. They brought 200 people to take the two cartons.

More than 100 people went to the table on which there were 50 cartons. The one on which there is a small quantity!, the quantity that is less than the number of people, in their thinking that it is more expensive and has a higher value, although the products are the same products.

There is no difference between them, but go to the cartons that appear to be a small amount before it ends, and leave the amount that appears to be too much and it will overflow.

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Scarcity principle in marketing

Human by nature loves something rare and he feels obsessed with buying something, even if he doesn't need it, once he feels that it will end.

There are many companies that use the principle of scarcity in marketing, meaning that they pretend that there is a shortage of the product or a limited time for supply and demand.

We see advertisements such as the last two pieces in the offer, book before summer, 50% discount for the first 5 subscribers.

These advertisements deal with an economic principle that makes your desire increase and you feel that it is an opportunity and someone else will benefit from the offer if it goes from you.

Companies that use the principle of scarcity in marketing try to make you feel the value of the product, not telling you the features and benefits of the product, or improving the service, but telling you that you will lose if you do not subscribe to the service, or do not buy the product.

In 2003, a British airline announced that it would close supersonic Concorde flights due to the lack of demand for it. The next day, it achieved a rise in ticket sales, meaning that they achieved a high sales rate when they said that they would stop flights on the plane. 

Remember, dear, they did not say that the service will improve or the speed of the plane will increase, and there is no discount on tickets!.

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Low supply and high demand

Something that exists in abundance and easily kills a large part of its value. Low supply and high demand, this means that the company does not push products in a large quantity in the market, so customers will have a desire to buy because the quantity is available in a small amount, and thus the demand increased.

In a clearer sense, if ten is required, seven or eight are available, but they are used in a deliberate manner.

Like what Apple does every year, the iPhone has pressure and high demand, and Apple can manufacture an iPhone for everyone on the planet, but they pay less than the demand, and the market may “run out”, or you have to wait a while to buy it.

This is the principle of scarcity that Apple does every year in the millions and succeeds greatly.

De Beers buys large quantities of diamonds in the global market, in order to maintain its scarcity so that its high price is maintained. Why is diamonds more expensive than gold, because gold is available in more quantity than diamonds.

And gold is more expensive than silver because silver is more available than gold. There are many companies that cannot use the principle of scarcity.

They cannot control supply and demand, because it is possible to be exposed to risks from strong competitors.

These companies have poor services or their products are not valuable and their customers are smart. There are companies and stores that use this principle incorrectly and it turns into counterproductive results.

People do not like to wait long or feel that they are less valuable. If everything becomes scarce, the scarcity itself will decrease in value and people will get used to it.

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