strategy+business is published by PwC Strategy& LLC.
or, sign in with:
strategy and business
 / Summer 2005 / Issue 39(originally published by Booz & Company)


Recent Studies

On straw-man marketing, leadership and meaning, acquired innovation, and other topics of interest.

The Power of Choice
A.V. Muthukrishnan ([email protected]) and Luc Wathieu ([email protected]), “Superfluous Choices and Persistent Brand Preferences,” Harvard Business School Marketing Research Paper No. 05-01. Click here.

Photograph by Opto Design
A central idea behind such popular marketing concepts as relationship marketing, global branding, and one-to-one marketing — all of which seek to present consumers with finely targeted offerings — is that the more narrowly directed marketing is, the more effective it will be. But is it possible that targeting consumer demands too narrowly weakens brand loyalty rather than solidifies it?

That’s the position of A.V. Muthukrishnan, an associate professor in the marketing department at the Hong Kong University of Science and Technology, and Luc Wathieu, an associate professor at Harvard Business School. Instead of offering consumers more of what they want most, they say, companies should deliberately provide consumers with “superfluous choices.” This gives customers the illusion that their purchase decisions are more valid, increasing the likelihood of repeat purchases and strengthening brand loyalty.

Superfluous choices can be either inferior products and services or unnecessary options that can be added or removed without affecting final choices. For example, if a consumer is browsing for a personal computer to use for multimedia, the PC company might offer a comparison chart that includes personal digital assistants (PDAs) and digital music players, which contain some but not all of the functions that the PC has. The company could also suggest “specials” that bundle PC peripherals, such as printers and software, with the computer for a higher price.

The inclusion of these potentially less-than-desirable offerings has a twofold effect. First, it shows the targeted product or service in context — making its advantages more vivid. So, in the example above, the company highlights the advantages of the PC over the unwanted alternative, helping to justify its cost. Second, by offering a wider spectrum of choice, the company generates confidence among consumers that their final selection is more valid because they have considered a range of options. This, in turn, strengthens brand loyalty and increases the likelihood of repeat purchases.

To test their hypothesis, the authors carried out a series of experiments involving a number of different products such as MP3 players, CDs, highlighter pens, and general-purpose scissors. In the MP3 experiment, for example, participants were split into groups and asked to select an MP3 player from among several brands. One group was given a choice of six brands that were very similar across four attributes — recording time, playing time, battery life, and jukebox space. Another group was given a choice of six brands among which one was clearly superior across the four attributes and the other five represented superfluous choices.

Having made their selection, both sets of participants were then told that their MP3 player had been lost, so they had to choose a replacement machine. By a wide margin, those in the group with the superfluous choices picked the same brand again more often than those in the group that was faced with six similar products.

Some companies have already successfully put the conclusions of this research to the test, the authors contend. One-brand stores, for example, often feature superfluous accessories or “overpriced” products to make consumers feel they have more choice. And Coca-Cola’s introduction of the niche product Cherry Coke could be viewed as a way to reinvigorate classic Coke among mainstream consumers.

Perhaps the most intriguing question is what these findings mean for global brands. Professors Muthukrishnan and Wathieu claim that “the proof of a global product’s superiority will vanish at the very instant its local (‘inferior’) contenders are washed out of the marketplace.”

Follow Us 
Facebook Twitter LinkedIn Google Plus YouTube RSS strategy+business Digital and Mobile products App Store


Sign up to receive s+b newsletters and get a FREE Strategy eBook

You will initially receive up to two newsletters/week. You can unsubscribe from any newsletter by using the link found in each newsletter.