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Article Excerpt
We propose that the variety a brand offers often serves as a quality cue and thus influences which brand consumers choose. Specifically, brands that offer a greater variety of options that appear compatible and require similar skills tend to be perceived as having greater category expertise or core competency in the category, which, in turn, enhances their perceived quality and purchase likelihood. Six studies support this proposition and demonstrate that compared to brands which offer fewer products, (a) brands which offer increased compatible variety are perceived as having higher quality; (b) this effect is mediated by product variety's impact on perceived expertise; (c) the higher perceived quality produces a greater choice share of the higher variety brand, even among consumers who select options that multiple brands offer and (d) product variety also impacts post-experience perceptions of taste. The findings suggest that in addition to directly affecting brand choice share through influencing the fit with consumer preferences, product line length can also indirectly affect brand choice through influencing perceived brand quality.
Key words: variety; consumer choice; quality cues; product line length History: This paper was received November 9, 2005, and was with the authors 4 months for 2 revisions; processed by Ravi Dhar.
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A basic assumption concerning the depth of a brand's product assortment is that offering consumers more options is superior to offering fewer options, for the simple reason that a greater variety of options can cater to a wider range of tastes (e.g., Lancaster 1990). This basic assumption has been challenged by recent research that has raised doubts about the wisdom of offering consumers many options to choose from (e.g., Iyengar and Lepper 2000, Schwartz 2004). For example, Iyengar and Lepper demonstrated that consumers who were presented with a set of 24 jams were significantly less likely to purchase one of these options compared to consumers presented with just 6 jams. Other researchers (e.g., Dhar 1996, 1997; Greenleaf and Lehmann 1995; Tversky and Shafir 1992) have shown that offering more options can generate decision conflict and preference uncertainty, leading to decision deferral.
Although these studies have provided important insights, we propose that the variety a brand offers also often serves as a quality cue and thus influences which brand consumers choose. In particular, we suggest that a brand offering greater variety of compatible options, that is, options that require similar skills, is perceived as having greater category expertise and, consequently, is more likely to be selected. Furthermore, because true quality is often ambiguous, an initial belief that brands offering more options are associated with higher quality will influence subsequent (perceived) experience with the chosen product. If these propositions are found to be true, it would suggest that when determining optimal product line length, marketers should consider both the direct and indirect ways in which additional variety can influence brand choice.
We begin with a discussion of prior research on the effect of the number of considered options on choice, followed by an analysis of the role of variety in brand evaluation and purchase. We then describe six studies that were designed to test our predictions and the conditions under which greater product variety is expected to enhance brand perceptions. We conclude with a discussion of the theoretical and practical implications of this research.
The Impact of Brand Product Variety on Brand Evaluation and Choice
Consider a consumer shopping at their local grocery store who decides that they would like to buy some ice cream. They are confronted with an onslaught of options, with flavors ranging from Vanilla to Rum Raisin and brands from Haagen Dazs to Breyers. On this particular day, Haagen Dazs offers more than a dozen different flavors while Breyers only offers a couple. Assuming the consumer has no prior brand preference, which brand will they choose and how will the variety the brand offered influence their decision? If they know they want Rum Raisin and only Breyers offers it, the choice is easy. But what if they decide they want a flavor offered by both brands (e.g., Vanilla)? Could the amount of variety each brand offers influence their perception of those brands and, hence, their brand choice?
These questions apply broadly because most purchase situations involve brands that offer different levels of product variety, with the level of variety easily observed by the consumer. A good deal of research has assumed that, other things being equal (e.g., costs, shelf space), offering more options is better (e.g., Kekre and Srinivasan 1990, Lancaster 1990). Supporting the notion that consumers like variety, in certain product categories a reduction in assortment has been shown to lead to reduced sales (Borle et al. 2005).
At the same time, offering greater product variety is usually associated with higher costs (e.g., Draganska and Jain 2005, Lancaster 1979); a firm's production costs often increase with the length of their product line. Furthermore, recent research has shown that more options can generate decision conflict, confusion, and frustration, leading to choice deferral or even no choice at all (e.g., Chernev 2003a, 2003b; Dhar 1996, 1997; Greenleaf and Lehmann 1995; Iyengar and Lepper 2000). Paradoxically, people choosing from larger variety enjoyed the decision-making process more, but they also felt greater frustration and difficulty with choice and were less likely to make a purchase (Iyengar and Lepper 2000).
In many situations, however, the relevant question is not whether a choice will be made, but which brand consumers will select. When we go to the store in search of yogurt or need to buy chocolate for a friend's birthday, we have often already decided to make a choice but may be uncertain about which brand to purchase. How would the variety a brand offers influence which brand consumers choose? The literature on "too much choice" might indicate that consumers would avoid high-variety brands in anticipation of the difficulty of choosing from a large set of options. However, typical studies pertaining to the role of decision conflict (e.g., Dhar 1997, Tversky and Shafir 1992) and "too much choice" (e.g., Iyengar and Lepper 2000) have not addressed that question directly and have focused instead on whether a choice is made. Thus our focus is on a common situation in which the relevant issue is not whether a choice will be made, but which brand will be selected (given that the decision to buy has already been made).
In this context, we propose that the variety a brand offers can act as an important quality cue, affecting the inferences consumers make about the brand and thus influencing which brand consumers choose. This quality cue may play a key role particularly when detailed attribute information is unavailable or under low involvement (see, e.g., Kassarjian 1978). Furthermore, it may play a role both when consumers evaluate each brand separately, such as when consumers consider a brand's end-of-aisle display or a brand that is sold through exclusive distributors, and when two or more brands' offerings are directly compared (see, e.g., Nowlis and Simonson 1997).
The notion that consumers rely on cues to assess quality is well established and has been relied on in both marketing (e.g., Allison and Uhi 1964, Olson 1977, Mayzlin 2006, Purohit and Srivastava 2001) and economics (e.g., Klein and Leffier 1981, Nelson 1974). For example, in the absence of other diagnostic information, consumers tend to rely on price as an indicator of quality, particularly for experience goods. The reasons for using quality cues such as price, brand name, and manufacturer's reputation as proxies for quality appear rather straightforward. In contrast, the notion that consumers infer quality from the number of options offered by a brand is less obvious.
We propose that offering greater variety with finer distinctions among items in the product line-chocolates with different cocoa content levels, or yogurts representing both standard and more unusual flavors--is likely to convey category expertise. To be precise, a firm that offers finer distinctions within a product line, as indicated by its wider variety, communicates that it has core competency in the category (Prahalad and Hamel 1990) and has invested in learning the category details and dimensions on which consumers' tastes vary. Given the investment involved in developing such category expertise and the additional costs associated with offering greater variety, the firm has more to lose if buyers are subsequently disappointed by actual product quality. In addition, consumers likely employ a heuristic whereby breadth of the product line tends to come at the expense of depth. Therefore, as long as the composition of the brand's product line sends a consistent message, e.g., variations of gourmet chocolates as opposed to both gourmet chocolates and gourmet cheeses, we expect greater variety within the specific category to convey higher quality and, correspondingly, affect brand choice. (1)
As noted earlier, a positive effect of greater variety on brand choice may simply reflect the fact that more options can satisfy more varied tastes. That is, a fit with preferences account indicates that offering greater variety increases brand choice through sales of unique options, or those that are offered only by the high-variety brand. If, however, consumers tend to perceive brands that offer greater product variety more favorably, then they may select from highvariety brands even when choosing shared options, or items that are...
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