IDEAS home Printed from https://ideas.repec.org/a/eee/joreco/v60y2021ics0969698920314405.html
   My bibliography  Save this article

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

Author

Listed:
  • Li, Hui
  • Xu, Yunjie
  • Huang, Lihua

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.

Suggested Citation

  • Li, Hui & Xu, Yunjie & Huang, Lihua, 2021. "When less is more? The contingent effect of product supply limitation in the release of new electronic products," Journal of Retailing and Consumer Services, Elsevier, vol. 60(C).
    • Handle: RePEc:eee:joreco:v:60:y:2021:i:c:s0969698920314405
    DOI: 10.1016/j.jretconser.2020.102433
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0969698920314405
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jretconser.2020.102433?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ahluwalia, Rohini, 2002. "How Prevalent Is the Negativity Effect in Consumer Environments?," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 29(2), pages 270-279, September.
    2. Herr, Paul M & Kardes, Frank R & Kim, John, 1991. "Effects of Word-of-Mouth and Product-Attribute Information on Persuasion: An Accessibility-Diagnosticity Perspective," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 17(4), pages 454-462, March.
    3. Gierl, Heribert & Huettl, Verena, 2010. "Are scarce products always more attractive? The interaction of different types of scarcity signals with products' suitability for conspicuous consumption," International Journal of Research in Marketing, Elsevier, vol. 27(3), pages 225-235.
    4. Petty, Richard E & Cacioppo, John T & Schumann, David, 1983. "Central and Peripheral Routes to Advertising Effectiveness: The Moderating Role of Involvement," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 10(2), pages 135-146, September.
    5. Parker, Jeffrey R. & Lehmann, Donald R., 2011. "When Shelf-Based Scarcity Impacts Consumer Preferences," Journal of Retailing, Elsevier, vol. 87(2), pages 142-155.
    6. Sonnier, Garrett P., 2014. "The market value for product attribute improvements under price personalization," International Journal of Research in Marketing, Elsevier, vol. 31(2), pages 168-177.
    7. H. Leibenstein, 1950. "Bandwagon, Snob, and Veblen Effects in the Theory of Consumers' Demand," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 64(2), pages 183-207.
    8. Campbell, Margaret C & Goodstein, Ronald C, 2001. "The Moderating Effect of Perceived Risk on Consumers' Evaluations of Product Incongruity: Preference for the Norm," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 28(3), pages 439-449, December.
    9. Herr, Paul M, 1989. "Priming Price: Prior Knowledge and Context Effects," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 16(1), pages 67-75, June.
    10. Erickson, Gary M & Johansson, Johny K & Chao, Paul, 1984. "Image Variables in Multi-Attribute Product Evaluations: Country-of-Origin Effects," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 11(2), pages 694-699, September.
    11. Kauppinen-Räisänen, Hannele & Björk, Peter & Lönnström, Alexandra & Jauffret, Marie-Nathalie, 2018. "How consumers' need for uniqueness, self-monitoring, and social identity affect their choices when luxury brands visually shout versus whisper," Journal of Business Research, Elsevier, vol. 84(C), pages 72-81.
    12. Subramanian Balachander & Yan Liu & Axel Stock, 2009. "An Empirical Analysis of Scarcity Strategies in the Automobile Industry," Management Science, INFORMS, vol. 55(10), pages 1623-1637, October.
    13. Lynn, Michael, 1989. "Scarcity effects on desirability: Mediated by assumed expensiveness?," Journal of Economic Psychology, Elsevier, vol. 10(2), pages 257-274, June.
    14. Sarah Clemente & Eric Dolansky & Antonia Mantonakis & Katherine White, 2014. "The effects of perceived product-extrinsic cue incongruity on consumption experiences: The case of celebrity sponsorship," Marketing Letters, Springer, vol. 25(4), pages 373-384, December.
    15. Luigi Mittone & Lucia Savadori & Rino Rumiati, 2005. "Does scarcity matter in children's behavior? A developmental perspective of the basic scarcity bias," CEEL Working Papers 0501, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.
    16. Huang, Huiling & Liu, Stephanie Q. & Kandampully, Jay & Bujisic, Milos, 2020. "Consumer Responses to Scarcity Appeals in Online Booking," Annals of Tourism Research, Elsevier, vol. 80(C).
    17. Nikolaus Franke & Martin Schreier, 2008. "Product uniqueness as a driver of customer utility in mass customization," Marketing Letters, Springer, vol. 19(2), pages 93-107, June.
    18. Zogaj, Adnan & Olk, Stephan & Tscheulin, Dieter K., 2019. "Go pop-up: Effects of temporary retail on product- and brand-related consumer reactions," Journal of Retailing and Consumer Services, Elsevier, vol. 50(C), pages 111-121.
    19. Yael Steinhart & David Mazursky & Michael Kamins, 2013. "The process by which product availability triggers purchase," Marketing Letters, Springer, vol. 24(3), pages 217-228, September.
    20. Anthony D. Miyazaki & Dhruv Grewal & Ronald C. Goodstein, 2005. "The Effect of Multiple Extrinsic Cues on Quality Perceptions: A Matter of Consistency," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 32(1), pages 146-153, June.
    21. Hauser, John R & Urban, Glen L, 1979. "Assessment of Attribute Importances and Consumer Utility Functions: von Neumann-Morgenstern Theory Applied to Consumer Behavior," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 5(4), pages 251-262, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Park, Jihye & Li, Wenhan, 2023. "“I got it FIRST†: Antecedents of competitive consumption of a new product," Journal of Retailing and Consumer Services, Elsevier, vol. 73(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dörnyei, Krisztina Rita & Lunardo, Renaud, 2021. "When limited edition packages backfire: The role of emotional value, typicality and need for uniqueness," Journal of Business Research, Elsevier, vol. 137(C), pages 233-243.
    2. Ivan Soraperra, 2009. "Revealed Preferences, Choices, and Psychological Indexes," Working Papers 643, Queen Mary University of London, School of Economics and Finance.
    3. Kim, Jikyung (Jeanne) & Dong, Hang & Choi, Jeonghye & Chang, Sue Ryung, 2022. "Sentiment change and negative herding: Evidence from microblogging and news," Journal of Business Research, Elsevier, vol. 142(C), pages 364-376.
    4. Zogaj, Adnan & Olk, Stephan & Tscheulin, Dieter K., 2019. "Go pop-up: Effects of temporary retail on product- and brand-related consumer reactions," Journal of Retailing and Consumer Services, Elsevier, vol. 50(C), pages 111-121.
    5. Henkel, Laura & Jahn, Steffen & Toporowski, Waldemar, 2022. "Short and sweet: Effects of pop-up stores’ ephemerality on store sales," Journal of Retailing and Consumer Services, Elsevier, vol. 65(C).
    6. Narwal, Preeti & Nayak, J.K., 2020. "How consumers form product quality perceptions in absence of fixed posted prices: Interaction of product cues with seller reputation and third-party reviews," Journal of Retailing and Consumer Services, Elsevier, vol. 52(C).
    7. Mingzhou Yu & Fang Liu & Julie Anne Lee, 2019. "Consumers’ responses to negative publicity: the influence of culture on information search and negative word-of-mouth," Journal of Brand Management, Palgrave Macmillan, vol. 26(2), pages 141-156, March.
    8. Parguel, Béatrice & Delécolle, Thierry & Valette-Florence, Pierre, 2016. "How price display influences consumer luxury perceptions," Journal of Business Research, Elsevier, vol. 69(1), pages 341-348.
    9. Kukar-Kinney, Monika & Xia, Lan, 2017. "The effectiveness of number of deals purchased in influencing consumers' response to daily deal promotions: A cue utilization approach," Journal of Business Research, Elsevier, vol. 79(C), pages 189-197.
    10. Purnawirawan, Nathalia & De Pelsmacker, Patrick & Dens, Nathalie, 2012. "Balance and Sequence in Online Reviews: How Perceived Usefulness Affects Attitudes and Intentions," Journal of Interactive Marketing, Elsevier, vol. 26(4), pages 244-255.
    11. Barton, Belinda & Zlatevska, Natalina & Oppewal, Harmen, 2022. "Scarcity tactics in marketing: A meta-analysis of product scarcity effects on consumer purchase intentions," Journal of Retailing, Elsevier, vol. 98(4), pages 741-758.
    12. Sihem Dekhili & Mohamed Achabou, 2015. "The Influence of the Country-of-Origin Ecological Image on Ecolabelled Product Evaluation: An Experimental Approach to the Case of the European Ecolabel," Journal of Business Ethics, Springer, vol. 131(1), pages 89-106, September.
    13. Roggeveen, Anne L. & Goodstein, Ronald C. & Grewal, Dhruv, 2014. "Improving the Effect of Guarantees: The Role of a Retailer's Reputation," Journal of Retailing, Elsevier, vol. 90(1), pages 27-39.
    14. Eileen Fischer & Rebecca Reuber, 2007. "The Good, the Bad, and the Unfamiliar: The Challenges of Reputation Formation Facing New Firms," Entrepreneurship Theory and Practice, , vol. 31(1), pages 53-75, January.
    15. Ostovan, Nima & Khalili Nasr, Arash, 2022. "The manifestation of luxury value dimensions in brand engagement in self-concept," Journal of Retailing and Consumer Services, Elsevier, vol. 66(C).
    16. Das, Gopal & Mukherjee, Amaradri & Smith, Ronn J., 2018. "The Perfect Fit: The Moderating Role of Selling Cues on Hedonic and Utilitarian Product Types," Journal of Retailing, Elsevier, vol. 94(2), pages 203-216.
    17. Kim, Juran & Kang, Seungmook & Lee, Ki Hoon, 2021. "Evolution of digital marketing communication: Bibliometric analysis and network visualization from key articles," Journal of Business Research, Elsevier, vol. 130(C), pages 552-563.
    18. Agnieszka Zablocki & Bodo Schlegelmilch & Michael J. Houston, 2019. "How valence, volume and variance of online reviews influence brand attitudes," AMS Review, Springer;Academy of Marketing Science, vol. 9(1), pages 61-77, June.
    19. Orth, Ulrich R. & Malkewitz, Keven, 2012. "The Accuracy of Design-based Judgments: A Constructivist Approach," Journal of Retailing, Elsevier, vol. 88(3), pages 421-436.
    20. Béatrice Parguel & Florence Benoît-Moreau & Fabrice Larceneux, 2011. "How Sustainability Ratings Might Deter ‘Greenwashing’: A Closer Look at Ethical Corporate Communication," Journal of Business Ethics, Springer, vol. 102(1), pages 15-28, August.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:joreco:v:60:y:2021:i:c:s0969698920314405. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/journal-of-retailing-and-consumer-services .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.