Empirical analysis of scarcity marketing: examining the dynamic spillover effects between limited-time and regular products

This study empirically examines the strategy of limited-time (LT) products, in which new products are introduced through scarcity marketing. Despite the widespread adoption of such marketing tactics across industries, there is a limited understanding of how LT products affect the sales of other products in the short and long term. Furthermore, how these relationships depend on marketing activities remains underexplored. Applying weekly sales data of beer products to a seemingly unrelated regression model, we address these issues by inferring the dynamic interactions between LT products and regular (or non-LT) products under the same parent brand. We further explore the role of various marketing efforts, including price promotions, channel coverage and advertising, in moderating this dynamic relationship. The results suggest that there is no significant effect on the short-term relationship between LT and regular products. However, both products appear to enhance each other’s performance in the long term. Furthermore, heavy promotion of regular products and advertising of LT products lead to an adverse moderating effect in the short term. These novel findings suggest that introducing LT products consistently can help firms increase the long-term sales of their current products, which in turn facilitates the success of LT products in the future.