The Influence of Expertise on Preferences For Assortment Variety; When Less Variety Is Better

EXTENDED ABSTRACT - Assortment variety may have positive and negative effects on consumers’ assortment preferences, which poses a dilemma to retailers. Rafery (1993) formulates it as follows:

Citation:

Erica van Herpen and Rik Pieters (2002) ,"The Influence of Expertise on Preferences For Assortment Variety; When Less Variety Is Better", in NA - Advances in Consumer Research Volume 29, eds. Susan M. Broniarczyk and Kent Nakamoto, Valdosta, GA : Association for Consumer Research, Pages: 438-439.

Advances in Consumer Research Volume 29, 2002     Pages 438-439

THE INFLUENCE OF EXPERTISE ON PREFERENCES FOR ASSORTMENT VARIETY; WHEN LESS VARIETY IS BETTER

Erica van Herpen, Wageningen University

Rik Pieters, Tilburg University

EXTENDED ABSTRACT -

Assortment variety may have positive and negative effects on consumers’ assortment preferences, which poses a dilemma to retailers. Rafery (1993) formulates it as follows:

"When it comes to product variety, shoppers tend to send out mixed signals. They like supermarkets to offer a wide variety of products. At the same time, they think that stores carry too many items."

This study shows under which conditions consumers prefer assortments with high versus low levels of variety. We show that situations arise where consumers prefer assortments with low variety to assortments with high variety, i.e. where 'less is better’. The main contribution of this paper is its identification of two moderating variables, consumer expertise and preference awareness, that influence the relation between assortment variety and preference for specific assortments.

We place the advantages and disadvantages of assortment variety in an accuracy-effort framework. Advantages for the consumer of assortment variety center on choice accuracy: it is more likely that the assortment contains a desired product. Variety leads to a higher probability of finding a preferred product, possibilities for choice of different products over time, and flexibility (Hoch, Bradlow & Wansink 1999; Kahn 1998; Kahn & Lehmann 1991). Costs of assortment variety center on choice effort: it requires more effort to choose from the assortment. Variety can lead to confusion over which is the better product, and to increased difficulty in making a choice (Handelsman & Munson 1985; Kahn & McAlister 1997; Lehmann 1998). Although the effort associated with assortment variety has often been mentioned (Kahn 1998; Lehann 1998), many empirical studies to date indicate that consumers’ perception of variety is a good predictor of store preference (Broniarczyk, Hoyer & McAlister 1998; Hoch, Bradlow & Wansink 1999). Evidence of negative effects of assortment variety on sales are now appearing (Boatwright & Nunes 2000). Yet, the conditions under which variety has a positive or negative effect on store preference and subsequent sales are not obvious.

Assortment variety is a multi-dimensional construct. We identify three variety components: assortment size, dispersion across attribute levels, and dissociation between attributes. Attribute dispersion refers to the diversity of attribute levels in an assortment (e.g. the relative proportion of red, green, blue products), while dissociation between attributes refers to systematic links between attributes (e.g. all red products are large).

The conditions under which assortment variety leads to positive versus negative effects on assortment preference are examined by introducing two moderating variables: preference awareness and expertise. We focus on two situations of preference awareness: the consumer knows exactly which product (s)he wants to buy (and that it is available) versus the consumer will make the product choice in the store. Consumers with high preference awareness are expected to prefer smaller assortments than consumers with low preference awareness. For expertise, the direction of the effect is less clear. On the one hand, novices may prefer assortments with little variety, as these are easier to evaluate. On the other hand, novices have more to learn, and may therefore prefer highly varied assortments. Overall, we expect the first effect to outweigh the learning-effect.

An empirical study was conducted, in which 116 consumers ranked assortments that differed in the three variety component. Scenarios were used to manipulate preference awareness and expertise, in a within-subjects design. The data were examined using an exploded logit model (Allison & Christakis 1994; Kamakura & Mazzon 1991).

Preference awareness significantly changes assortment preferences. When consumers know which product they want to buy, and know that it is in store, they prefer smaller assortments, and do not seem to care about attribute dispersion. Apparently, assortment size is a clear indicator of search costs, contrary to attribute dispersion and dissociation. When consumers expect to make their choice in the store, they instead prefer large assortments with high levels of attribute dispersion.

Expertise also affects variety preferences. As expected, experts prefer large assortments with high attribute dispersion. Novices, on the other hand, prefer small assortments. They still prefer assortments with more attribute dispersion, although to a lesser degree than experts do. Overall, novices do not seem too concerned about getting to know the product category. Rather, they prefer assortments with few products that are very diverse, presumably because the decision process in these assortments is easy.

Our results have important implications for assortment research and retail management. They concern the possibility of reducing assortment variety without decreasing store preference, novices’ interest in learning about a product category, and store positioning. The main theoretical implication of this study is that consumers can and will adjust their store preferences, depending on their preference awareness and expertise.

REFERENCES

Allison, Paul D., and Nicholas A.Christakis, 1994, "Logit Models for Sets of Ranked Items," in: Sociological Methodology, editor: Peter V. Marsden, Washington: American Sociological Association, 199-228

Baumol, William J., and Edward A. Ide, 1956, "Variety in Retailing," Management Science, 3 (1), 93-101

Bettman, James R., Mary Frances Luce, and John W. Payne, 1998, "Constructive Consumer Choice Processes," Journal of Consumer Research, 25 (December), 187-213

Boatwright, Peter, and Joseph C. Nunes, 2000, "Reducing Assortment: An Attribute-Based Approach," unpublished working paper, Carnegie Mellon University / University of Southern California

Broniarczyk, Susan M., Wayne D. Hoyer, and Leigh McAlister, 1998, "Consumers’ Perceptions of the Assortment Offered in a Grocery Category: The Impact of Item Reduction," Journal of Marketing Research, 35 (May), 166-176

Brucks, Merrie, 1985, "The Effects of Product Class Knowledge on Information Search Behavior," Journal of Consumer Research, 12 (June), 1-15

Fisher, Marshall L., and Christopher D. Ittner, 1999, "The Impact of Product Variety on Automobile Assembly Operations: Empirical Evidence and Simulation Analysis," Management Science, 45 (June), 771-786

Gourville, John T., and Dilip Soman, 2000, "Is More Choice Always Better?: The Effect of Assortment Type on Consumer Choice," working paper, Harvard University / Hong Kong University of Science and Technology

Handelsman, Moshe, and J. Michael Munson, 1985, "On Integrating Consumer Needs for Variety with Retailer Assortment Decisions," Advances in Consumer Research, 12, 108-112

Hoch, Stephen J., Eric T. Bradlow, and Brian Wansink, 1999, "The Variety of an Assortment," Marketing Science, 18 (4), 527-546

Huffman, Cynthia, and Barbara E. Kahn, 1998, "Variety for Sale: Mass Customization or Mass Confusion?," Journal of Retailing, 74 (4), 491-513

Iyengar, Sheena S., and Mark R. Lepper, 2000, "When Choice is Demotivating: Can One Desire Too Much of a Good Thing," Journal of Personality and Social Psychology, 79 (6), 995-1006

Johnson, Eric J., and J. Edward Russo, 1984, "Product Familiarity and Learning New Information," Journal of Consumer Research, 11, 542-550

Kahn, Barbara E., 1998, "Marketing in the 21^st Century; Dynamic Relationships With Customers: High-Variety Strategies," Journal of the Academy of Marketing Science, 26 (Winter), 45-53

Kahn, Barbara E., and Donald R. Lehmann, 1991, "Modeling Choice Among Assortments," Journal of Retailing, 67 (3), 274-299

Kahn, Barbara E., and Leigh McAlister, 1997, Grocery Revolution, The New Focus on the Consumer, Reading: Addison-Wesley Educational Publishers, Inc.

Kamakura, Wagner A., and JosT Afonso Mazzon, 1991, "Value Segmentation: A Model for the Measurement of Values and the Value System," Journal of Consumer Research, 18 (September), 208-218

Koelemeijer, Kitty, and Harmen Oppewal, 1999, "Assessing the Effects of Assortment and Ambience: A Choice Experimental Approach," Journal of Retailing, 75 (3), 319-345

Lehmann, Donald R., 1998, "Marketing in the 21^st Century, Commentary; Customer Reactions to Variety: Too Much of a Good Thing?," Journal of the Academy of Marketing Science, 26 (1), 62-65

Loewenstein, George, 1999, "Is More Choic Always Better?," Social Security Brief, National Academy of Social Insurance, 11^th annual conference

Long, Mary M., and Leon G. Schiffman, 1997, "Swatch Fever: An Allegory for Understanding the Paradox of Collecting," Psychology & Marketing, 14 (August), 495-509

Macromedia, 1997, Authorware 4.0.2, San Francisco: Macromedia, Inc.

Meyer, Robert J., 1997, "The Effect of Set Composition on Stopping Behavior in a Finite Search Among Assortments," Marketing Letters, 8 (1), 131-143

Mitchell, Andrew A., and Peter A. Dacin, 1996, "The Assessment of Alternative Measures of Consumer Expertise," Journal of Consumer Research, 23, 219-239

Payne, John W., James R. Bettman, and Eric J. Johnson, 1988, "Adaptive Strategy Selection in Decision Making," Journal of Experimental Psychology, 14 (3), 534-552

Pessemier, Edgar A., 1985, "Varied Individual Behavior: Some Theories, Measurement Methods and Models," Multivariate Behavioral Research, 20 (January), 69-94

Raftery, Dan, 1993, "Trim the Dead Wood," Progressive Grocer, 72 (September), 42-43

Ratchford, Brian T., 1982, "Cost-Benefit Models for Explaining Consumer Choice and Information Seeking Behavior," Management Science, 28 (2), 197-212

Schiffman, Leon G., Joseph F. Dash, and William R. Dillon, 1977, "The Contribution of Store-Image Characteristics to Store-Type Choice," Journal of Retailing, 53 (2), 3-14, 46

Simonson, Itamar, 1999, "The Effect of Product Assortment on Buyer Preferences," Journal of Retailing, 75 (3), 347-370

Sujan, Mita, 1985, "Consumer Knowledge: Effects on Evaluation Strategies Mediating Consumer Judgments," Journal of Consumer Research, 12, 31-46

Tversky, Amos, and Eldar Shafir, 1992, "Choice under Conflict: The Dynamics of Deferred Decision," Psychological Science, 3, 358-361

Van Herpen, Erica, and Rik Pieters, 2002, "The Variety of an Assortment; An Extension to the Attribute-Based Approach," forthcoming in Marketing Science.

----------------------------------------