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Rationing

 

Disciplines > Sales > Sales articles > Rationing

Description | Example | Discussion | See also

 

Description

When you are selling quantities of a product, limit the number that each customer can buy.

In a retail store, put up a sign saying something like 'Limit of 3 items per person' or 'Due to high demand and short supply, we are sorry but we can only sell five items per person.' Never penalize people for coming back and buying more. Do not 'notice' them when they do this or appear a bit confused as you let them through.

In a business-to-business situation, explain that you are having problems with your suppliers and, to be fair to all customers, you can only take orders a maximum number of items this month. If they try to persuade you to sell more, of course you can do them a 'confidential deal'.

Example

In the past there has been regular shortages of various types of food. I am still using the many bags of sugar I bought when we had a scare a few years ago, when the supermarket limited us to five bags each. I usually only used to use one bag every couple of months. I kept going back and thought I was clever, but ended up with a cupboard full of sugar that is still half full!

Discussion

This works by using the scarcity principle. When people are faced with a limited supply, then tend to imagine not having any available to them, and so panic and buy more than they would normally buy, in order to provide a buffer supply.

It also uses the anchoring and adjustment heuristic, where the person sees the limit number and makes an adjustment from there to what they want to buy (maybe even going for the full amount) rather than basing their decision on what they really need.

An element of how this works is that the person feels they are in competition with others to garner scarce resources, which is a very primitive response.

When people 'play' the inadequate controls to buy more than the limit, this makes them feel good. You can encourage this by making appear that you are unable to stop them (so making them feel smug and powerful).

Research has shown that almost any sign with a number promotion results in many customers buying 30 to 100 percent more than normal (Wansink et al, 1998).

See also

Scarcity principle

 

Wansink, B., Kent, R.J. and Hoch, S.J. (1998). An Anchoring and Adjustment Model of Purchase Quantity Decisions, Journal of Marketing Research, 35, (Feb., 1998), 71-81

 

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