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Variety Affects
Assortment
Attractiveness
A Consumer Perspective
ELINE DE VRIES-VAN KETEL
Iyengar and Jiang (2005) investigated the relationship between the number
likelihood of choosing even though not choosing was financially costly to people.
the author refers to the number of products of one brand within a product category.
The results showed that individuals with an articulated ideal point are more likely
who have a favorite product face the relatively simple task of searching for the
product that best matches their preferences. In contrast, individuals who do not
have an articulated ideal point face the more complex task of evaluating the
available alternatives while at the same time forming the very criteria to be used in
the evaluation process. Since larger assortments are more complex to choose from,
these individuals tend to opt for choosing from the smallest brand.
The study by Chernev (2003a) provides some insight into why more
variety in a product category can be better in some situations (if you have a
favorite product) and worse in others (if you dont have a favorite product). The
author states that imposing constraints on the decision problem by limiting the size
of the assortment could actually increase the utility derived from choice. However,
he does not provide tools for retailers in terms of which types of assortments to
reduce. It could be argued that this would be beneficial in assortments for which
consumers generally do not have an articulated ideal point. One could think of
cameras.
If consumers perceive more differences between the brands in a category
(i.e., see more variety) they are likely to show less variety-seeking behavior
chosen brand on sale or purchasing for someone else) (Van Trijp et al. 1996). The
authors argued that when perceived differences between brands become larger,
probably fewer brands perfectly fulfill a consumers needs. So, there is less drive
to switch between brands, simply because one is the best. People will then
purchase the same brand repeatedly or for externally driven motivations. When the
differences between the brands become smaller, brands may be perceived as more
substitutable, thereby lessening the motivation to select the one brand that
The authors proposed that the number of brands theoretically could have two
category may signal that there is much room for product differentiation.
Promotions in such categories will induce less brand switching and promotional
response, in the same line of reasoning as was used by Van Trijp et al. (1996)
above. On the other hand, many brands in a category may be associated positively
with brand switching. Manufacturers might then find it attractive to add even more
brands to ensure that at least one of their brands is on promotion. The authors
found support for the first effect. They detected a negative relationship between
the number of brands in a product category and promotional elasticity for (1)
featured price cuts (the brand is advertised in a store circular) and (2) pure price
brands in a product category decreased promotional response for these two types
In the previous two studies more variety led to less switching behavior.
Variety was reflected by the number of brands and the differences between these
brands. In the following study variety was captured by the number of products that
are acceptable to consumers. Campo, Gijsbrechts, and Nisol (2000) looked at
consumer reactions to out of stock situations, which reactions are dependent on the
with out of stock, consumers are more inclined to choose another SKU from the
(Campo et al. 2000). More variety (in terms of the number of acceptable
means that the danger of stock-outs is less severe (i.e., consumers will less easily
behave within a product category when confronted with a certain level of variety.
offering low or high variety. Furthermore, variety has a negative impact on choice
likelihood. We also perceive that consumers who have a favorite product prefer
choosing from larger assortments of a specific brand, while those who are not
aware of an ideal point want to choose from smaller assortments. In the next
section, we will see what the effects of variety at the product category level are on
positive impact of (1) the number of acceptable options in an assortment, (2) the
type of options (their value), and (3) the variety of the options (uniqueness) on the
value of an assortment. They detected a significant three-way interaction of the
number of options by the value of the options by the variety of the options. Variety
as captured by the number of acceptable options and their uniqueness was found to
have a positive effect on assortment evaluations by consumers.
More specific results were found with another model for assortment value
built by Kim, Allenby, and Rossi (2002). Instead of studying the effect of a small
range of assortment sizes, they computed the value of each flavor in an assortment
and the compensating value for removing each flavor. Calculations showed that
households highly value popular flavors and that they would suffer substantial utility losses from
removal of these flavors from the assortment. A retailer offering
low variety must compensate the consumers with, for example, a lower price level.
In their computations, they assumed that for each (additional) flavor the
assortment is evaluated more positively if at least one household buys the flavor.
In other words, they suggested that more variety is better.Van Herpen (2001, Chapter 4) investigated
the impact of three aspects of
variety on assortment preference. The three aspects are: (1) assortment size, (2)
dispersion across attribute levels, e.g., if all products have the same color or
different colors, and (3) dissociation between the attributes, e.g., if product color
and package size are unrelated. Two moderating variables, expertise with the product category and
awareness of a
favorite product, were also included in the study. Results showed a main positive
effect of assortment size (few versus many products) and attribute dispersion
(few versus many differences) on assortment preference, but no effect for
attribute dissociation (high versus low connection).
With respect to the moderating role of expertise, Van Herpen found that
experts prefer large assortments with a high degree of attribute dispersion. Novices
prefer small assortments and assortments that offer a high degree of attribute
dispersion. The author also found that consumers who do not have an articulated
preference (i.e., a favorite product) before entering a store prefer larger assortments and assortments
with more dispersion of the attribute levels than consumers with high preference awareness.
Consumers, who do know what product they want and know that this product is available in the store,
prefer an assortment that offers few products. These consumers do not care about the diversity of the
products in an assortment.
Note that this appears to be exactly the opposite of what was found by
Chernev (2003a). In his study, consumers who know what product they want are
more likely to choose from larger instead of smaller assortments of a specific
brand. This difference in findings can be explained by the differences in the design of both studies. In
the Van Herpen study, subjects had to rank order assortments,
based on general attributes like few products. If they were aware of their favorite
product (which was manipulated), they knew for sure that the store (small or large)
carried this favorite product. As a result, they preferred small assortments, thus
minimizing search costs. In the Chernev study, subjects did not rank order
assortments, but had to choose from an assortment that contained four products of
one brand (the small assortment) and sixteen products of another brand (the large assortment). If
subjects were not aware of a favorite product, they had to
construct their preferences to be able to make a choice. This is easier if you choose
from a small assortment. As a result, now subjects who do not have a favorite product prefer smaller
assortments. In short, the difference in effects can be mainly explained by the fact that subjects in the
Chernev study actually experienced the variety in the assortment, while subjects in the Van Herpen
study did not. What we can conclude is that the awareness of a favorite product is an important
moderating factor if we consider the effects of assortment variety. Oppewal and Koelemeijer (2005)
also studied the relationship between
favorite product. Results from a choice experiment in the cut flowers category
showed that larger assortments were rated more positively. This relationship did
not have decreasing marginal returns as was expected by the authors. The addition
authors, the lack of decreasing marginal returns might be explained by the small
range of assortment sizes (five to twelve products) that they used in their
experiment. The authors also did not find an effect of the presence of an
Broniarczyk, Hoyer and McAlister (1998). However, when they specified separate
favorite available effects for the different product (flower) types, they found strong
effects for some specific product types. Furthermore, they tested whether the
preferences for the products in the assortment. This was not the case. Larger
This is again does not seem to be in line with Van Herpen (2001, Chapter
4) who found that consumers who have a favorite alternative prefer smaller
generally be the case). In the Oppewal and Koelemeijer study, subjects saw all
available products. Moreover, subjects in the Van Herpen study were sure that
their favorite product (if they were aware of it) was available in the assortment
under consideration. Consequently, since they probably did not want to search
long for their favorite product, subjects who had a favorite product preferred
smaller assortments. In the Oppewal and Koelemeijer study, subjects did not
choose between assortments, they were actually confronted with one. As a result,
In a different study the number of offerings and the variety of offerings did
breadth of offerings has no unique impact on e-satisfaction levels. The authors did
not find a positive impact of product offerings as the other studies did, which can
assortment or the value of an assortment. The other studies all focus on the impact of variety on
consumer evaluations of an assortment, whereas the
In this section we showed that, overall, assortment variety has a positive impact on
not investigate whether this impact differs per product category. They did
smaller assortments in two situations: (1) if they do not know what they want
(Chernev 2003a) or (2) if they do know what they want and are sure that this
product is offered in the store (Van Herpen 2001). Consumers will opt for larger
assortments, if they do know what they want but are not sure about whether the
store carries their favorite product (Chernev 2003a; Oppewal and Koelemeijer
2005).
(How Assortment
Variety Affects
Assortment
AttractivenessA Consumer Perspective, Eline de Vries - van Ketel Rotterdam, November 2005)