20 August 2006

Spoilt for choice? (Or spoiled by choice?)

As discussed with Helen Razer on ABC Victoria local radio, Sunday 20 August

It's been your favourite chocolate bar for as long as you can remember. But suddenly it comes in King Size, Bite-sized, Chunky, "Bits", peanut butter-filled, white chocolate, dark chocolate, low GI and guarana-boosted varieties.

Or your current toothbrush is looking shaggy and needs replacing. You spend 5 minutes in front of the oral care shelves of the supermarket - it's only 3 months since you bought your last brush, but the range of product features has changed even in that short time. Suddenly you're worried about something you weren't even aware of when you walked in: Do I need whitening, tartar control, plaque removal, gum massage, and a tongue scraper? And in what combination?

We enjoy and value choice when it lets us get closer to exactly what we already know we want. We're delighted by choice when we're seeking variety and excitement. But we are often troubled by choice when it undermines our confidence in our ability to make the right decision. In many purchase situations - especially when we're not quite sure what we need - the more choices we have, the higher the perceived risk that we'll make the wrong choice.

There's a standard term in the lexicon of the consumer behaviourist: "post-purchase dissonance". We've all had it - that unpleasant feeling we get when something (or someone) tells us that we made the wrong choice, paid too much or bought last year's model. The complexity of choice in the category - whether it's mouthwash, mobile phones or mortgages - makes information processing and decision-making more taxing, and post-purchase dissonance more likely. In other words, too much choice can make us unhappy.

And when consumers feel that marketers are deliberately making things more difficult by offering more choices, then this can lead to resentment, because they are made to feel ignorant or inadequate for what should be a straightforward task.

It's a problem, too, for the marketer. Product and brand proliferation, making the choice too difficult and overwhelming for the consumer, is a risky strategy. Sales may look OK as consumers continue to buy - but grudgingly - until another marketer detects that level of disaffection and the feeling of being "trapped", and dramatically simplifies the whole offer, taking share away from the brands that were making it all too hard, and often attracting new consumers to the market in the process.

A classic example is herbal weight loss supplements. Once you had to DIY: first read up, then buy separate bottles of brindleberry, chromium picolinate, chitin, lecithin, etc. from your health food store. Then along came "Fat Blaster", with a name and a value proposition that told you they'd done all the worrying for you - everything you needed and nothing you didn't was in the one capsule. At around $50 a box, it doubled the size of the market overnight!

And when a FMCG company like Nestlé offers at least four different products in the chocolate mousse category alone (see my earlier blog on this), you also have to wonder about the economics of it - the cost of developing and managing such a complex product portfolio or "matrix" has to be justified by increased overall profitability or you're simply destroying shareholder value.

What can consumers do? Some marketers argue that consumers have the power to simply stop buying if they're not happy, but that's an unrealistic expectation when we feel like we're being held hostage.

You can look for a market maven - someone (without any vested interest) who collects and disseminates market and product information (you know, the brother-in-law or the guy at work who knows all about mobile phones or plasma TVs). Web forums are often a gathering place for such mavens, especially for technology-based products. You can find an intermediary who will do the simplifying and worrying for you - place your trust in a broker to find the best loan, super scheme, etc.

But few of us can afford a personal shopper to go to the supermarket! For groceries and other FMCG products, the best way to combat the tyranny of choice is feedback - call the 1-800 consumer line number on the package to tell marketers you're unhappy (they're crazy if they offer this and then don't listen). And, please, please, participate in market research and be painfully honest - we're often afraid to admit that we don't understand or are overwhelmed by choice, but marketers need to know... for their sake and ours as consumers.

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