The DigNuggetville “Reboot” post generated a number of questions and I love to answer questions (read= SEND MORE QUESTIONS!!! – firstname.lastname@example.org– – or – – @DanoLadik on Twitter).
Danielle Ceccarelli asked, “White Claw hard seltzer is saying they are running low on product when they increased revenue by 300%. Is this a marketing ploy to get the millennial demographic to purchase more…and quickly?”
To be direct, this has to be more of a “happy accident” increasing awareness than a true strategy by White Claw. It’s the end of the summer and Labor Day always spikes alcohol sales – in fact, all holidays spike alcohol sales. White Claw has experienced a small set of peak holidays and full summers and the team probably does not have the supply/demand forecast tamed.
More specifically Danielle, consumer product goods (CPGs) hardly ever play the “scarcity” game. CPGs are lower priced, lower involvement, and almost always and have a clear competitor for a consumer to switch to easily. Luxury goods, which are expensive, high involvement and have less competitors tend to play the scarcity game. Rolex is not Rolex if you can get it anywhere. Hermes – Ferrari – Patek Philippe – Cartier – Cristal – must limit supply to not only for quality control but also to increase exclusivity.
White Claw does not have an exclusivity bone in its body. For CPGs, when you run out of inventory, you leave money on the table because consumer will buy something else.
Something to think about today…
Associate Professor of Marketing
Stillman School of Business
Seton Hall University