Respect for the Red (Starbucks Cups)

Picture this: the weather is getting colder, the shops are bustling and decorations are hanging high and low. No forget Christmas, Starbucks' #redcups are back! With a variety of festive choices from eggnog lattes to honey and almond hot chocolates, everyone can find their (Starbucks) ‘cup of tea’ at this time of the year.

And when Starbucks stop selling our favourite drinks, what do we do with ourselves? Visit the countdown website of course. Here you can find out when you can next get your hands on that gingerbread latte you’ve been dreaming about. (There are currently just 272 days till we can get ours in the UK!)

So, why exactly do we all go nuts for these little (or venti) red cups of joy? Well, the answer lies in the Scarcity Principle such that opportunities become more valuable to us when they are less available (Cialdini, 2009). In other words, the more rare or uncommon something is, the more likely it is that people will take an interest in it. In this case, we find the red cups more exciting and perhaps more valuable than regular Starbucks refreshments because they are only available to us for a short period of time every year. Therefore people are more eager to consume these 'limited time only' beverages due to the nature of their restricted availability. If the red cups were available all year round, it is likely they would not be as popular.

The proof is in the pudding: the time limit scarcity of the red cups appears to make Starbucks' Christmas sales a success, time and time again. Clearly then, Starbucks is using the persuasive technique effectively in order to attract customers during the festive period. 

Article from The Telegraph (January, 2016) 

The Scarcity Principle was of interest to Aggarwal and Vaidyanathan (2003) who investigated the distinction between time-limited and time-independent promotions. The researchers suggested that in the case of a time-independent promotion, there is no apparent pressure on the buyer to rush a purchase whereas a time-limited promotion provides a strong motivation to accelerate the buyer's purchase in order to make sure they benefit from said promotion.

In Study 2 (of most relevance here), 102 undergraduate students from a university in Midwestern USA participated in return for extra class credit. The researchers created questionnaire booklets containing an advertisement offering a ‘boombox’ alongside a series of questions to gauge the participants’ reactions to the advertisement. Participants were randomly assigned to one of two test conditions based on the advertisement headline: 1) time-limited “10 Hour Only Sale” 2) time-independent “10^th Anniversary Super Sale”. Standard scales from past research studies were used to measure participants' intent to search for better price of the advertised product, willingness to buy the product at advertised price and attitude towards the current deal. The results can be seen clearly in the graph below, showcasing the mean responses to the scales in both conditions. 

The results were significant, indicating that participants in the time-limited condition were less likely to wait and look for a better deal, had a higher willingness to buy the product as advertised to them and had a more favourable attitude towards the current deal than those in the time-independent condition. The study demonstrates the beneficial effect that the Scarcity Principle can have when applied correctly in marketing. Customers are more likely to be in favour of buying a certain product sooner rather than later when given a limited time period in which to do so.

Hence the moral of the story: keep making those festive red cups Starbucks but only for a couple of months a year!

References:

Aggarwal, P., & Vaidyanathan, R. (2003). Use it or lose it: Purchase acceleration effects of time-limited promotions. Journal of Consumer Behaviour, 2, 393-403.

Cialdini, R.B. (2009). Influence: Science and practice (5th ed.). Boston: Pearson Education.