The Impact of Scarcity Marketing Models on Consumer Behavior in the Luxury Industry - The Case of Hermes

Abstract

With the continuous development of China's economic level, major luxury brands have entered the Chinese market one after another. People's rising living standards and more disposable income provide a strong impetus for the development of the luxury goods industry. At the same time, the luxury industry is also facing the challenges of market expansion and balancing product scarcity. The study analyzes the impact of scarcity marketing on consumers and puts forward feasible suggestions through the combination of scarcity marketing theory and Maslow's demand theory. On the base of a comprehensive analysis of the existing literature, the study summarizes and analyzes the advantages and disadvantages of scarcity marketing in the luxury goods industry. This study demonstrates the successful application of scarcity marketing by combining the case of Hermes. Hermès created the scarcity and uniqueness of products through limited sales, high pricing, and distribution system, which stimulated consumers' desire to buy and product sales. However, this also brings some negative effects including queuing, hype, limiting market size, intensifying market competition, and damaging brand reputation. Therefore, this study puts forward a number of feasible suggestions including formulating diversified pricing strategies, providing differentiated products and services, and strengthening brand social responsibility.