Abstract

Luxury brands strategically employ scarcity and exclusivity cues to influence consumer behavior, often contradicting conventional economic theories of supply and demand. This study investigates how these cues interact to shape revenue generation and brand value in the luxury market. Drawing from economic theories such as the Veblen effect, signaling theory and utility maximization, this research explores the mechanisms through which scarcity enhances urgency and exclusivity reinforces long-term brand prestige. Using empirical analysis, the study examines the impact of limited product availability, VIP membership programs, and price barriers on consumer spending and brand perception. Results indicate that while scarcity cues drive immediate demand by increasing perceived value and competitive urgency, exclusivity cues sustain desirability by fostering aspirational consumer identities. The findings highlight that successful luxury brand strategies depend on balancing these two forces—leveraging scarcity to create short-term engagement while maintaining exclusivity to uphold long-term brand equity. These insights offer valuable implications for luxury marketers aiming to optimize pricing, product release strategies, and brand positioning in an increasingly competitive market.

Advisor

Tian, Huiting

Department

Business Economics

Disciplines

Advertising and Promotion Management | Behavioral Economics | Marketing | Sales and Merchandising

Publication Date

2025

Degree Granted

Bachelor of Arts

Document Type

Senior Independent Study Thesis

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