SCARCITY

 What is Scarcity?
It refers to the situation when what you have is less than what you wish to have. Scarcity is when the means to fulfill
ends are limited and costly.

 Types of Scarcity
1. Relative scarcity

 Goods are scarce relative to its demand. In implies, resources are limited and there are unlimited needs and wants.
 The resource exists, but people cannot get it easily.

2. Absolute scarcity

 Supply of good is naturally limited and there is nothing humanly possible for us to increase supply.
 Demand has little to no impact on absolute scarcity. Resource is gone or nearly gone and cannot be increased.

Relative Scarcity Absolute Scarcity

All video games are sold on Time is an example of
the very first day of its absolute scarcity as we have
release. fix 24 hours in a day.
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 Effects of Scarcity

Hoarding
When consumers are faced with perceived scarcity, they get
overwhelmed by the fear and start hoarding the items. This in turn
creates a cycle of scarcity.
Energy Consumption
People living with constant scarcity suffer from a kind of Mental
exhaustion that can leads to consequences like poor financial planning.

Impulse Buying
When people face the possibility to go without an item, they often buy
it even when it is not needed.

Hoarding Energy Consumption Impulse buying

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 Strategies to use scarcity as a means of Persuasion
 One way to create scarcity is to describe that it is in short supply
1. Short Supply  Specific details might reduce the impact of this approach, therefore works best if
left vague. Example “Limited supply” or “While supply last”

 To elicit scarcity, we can suggest that a particular good is in high demand and is
2. High Demand popular
 Works well when we don’t have control over actual supply (10,000 already sold)

 scarcity can also be used by making a choice or option unique & special
3. Unique Opportunity  suggesting that some opportunity is reserved for a particular individual could be a
good way to persuade them to buy it. (VIP Membership)

 Works by putting an arbitrary deadline on an option & thus easy to utilize.

4. Limited Time  It is slightly less effective as compared to other approaches. ( “act now, before
time runs out”)