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You are here: Home / Notes from Dr. Dan-o / Are Product Shortages a True Marketing Strategy? The Case of White Claw

Are Product Shortages a True Marketing Strategy? The Case of White Claw

September 17, 2019 By Dr. Dan-o 2 Comments

Hola Todos!

The DigNuggetville “Reboot” post generated a number of questions and I love to answer questions (read= SEND MORE QUESTIONS!!! – dignuggetville@gmail.com– – 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…

Best regards,
Dr. Dan-o

 

Daniel M. Ladik, Ph.D.,

Associate Professor of Marketing

Stillman School of Business

Seton Hall University

daniel.ladik@shu.edu

 

 

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Filed Under: Notes from Dr. Dan-o, Questions

Comments

  1. Santo A. Donia says

    September 20, 2019 at 6:43 pm

    Funny, I had the same knee jerk reaction when I heard about their shortage … it’s gotta be a marketing ploy. 🙂

    I like your clarity about exclusivity and I agree the shortage is money left on the table (which isn’t an endorsed strategy).

    Reminds me of the Stroh’s Beer commercials and the legend of Coors Beer many moons ago.

    Would you care to compare or comment about those scenarios (Stroh’s had tight supplies I remember my Dad telling me and Coors was hand carried by people out of Colorado) compared to the “Claw Chaos?”

    Reply
    • Dr. Dan-o says

      September 24, 2019 at 2:46 pm

      Hola Santo! Reflecting back…I never recall Stroh’s being run well so any “shortages” were most probably self-inflicted pain. Coors, on the other hand, very much cared about product quality so in their early years, they didn’t expand just for the sake of more revenue. It wasn’t until Coors Light took off and they went coast to coast that Coors started to think more as a national brand as opposed to a regional one

      Reply

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Who Is Dr. Dan-o?

Dr. Dan-o (AKA Daniel M. Ladik, Ph.D) is an Associate Professor of Marketing in the Stillman School of Business at Seton Hall University in northern NJ. His main teaching and research interests include marketing strategy, personal selling and sales management, servant leadership, and web 2.0/social media.
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