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The Variety of an Assortment

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  • Stephen J. Hoch

    (The Wharton School, University of Pennsylvania, 1400 Steinberg-Dietrich Hall, Philadelphia, Pennsylvania 19104-6371)

  • Eric T. Bradlow

    (The Wharton School, University of Pennsylvania, 1400 Steinberg-Dietrich Hall, Philadelphia, Pennsylvania 19104-6371)

  • Brian Wansink

    (School of Business, University of Illinois at Urbana-Champaign, Champaign, Illinois 61820-6980)

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    Abstract

    Consumers rank variety of assortment right behind location and price when naming reasons why they patronize their favorite stores. Consumers care about variety because they are more likely to find what they want when going to a store that offers more varied assortments. When tastes are not well formed or are dynamic, perceived variety matters even more because of the desire to become educated about what is available while maintaining flexibility. Variety perception also matters when the variety-seeking motive operates. Retailers care about variety because customers value variety. Therefore, it is important to understand how people perceive the variety contained in an assortment and how these perceptions influence satisfaction and store choice. Remarkably, except for a recent study by Broniarczyk et al. (1998), there has been no research aimed at understanding the variety perception process itself. We offer a general mathematical model of variety based on the information structure of an assortment, defined both by the multiattribute structure of the objects and their spatial locations. We impose a psychologically plausible set of restrictions on the general model and obtain a class of simpler estimable models of perceived variety. We utilize the model to develop assortments that vary widely in terms of their information structure and study the influence of three factors on variety perceptions: (a) information structure of each assortment (i.e., the attribute level differences between objects); (b) level of organization of the objects and hence their relative spatial positions; and (c) task orientations, promoting either analytic or holistic processing. We also investigate the influence of variety perception and organization on stated satisfaction and store choice. To summarize our major findings: 1. Information structure has a big impact on variety perceptions, though diminishing returns accompany increases in the number of attributes on which object pairs differ. 2. People are more influenced by local information structure (adjacent objects) than nonlocal information structure. Proximity matters. 3. Organization of the display can either increase or decrease variety perceptions. When people engage in analytic processing, organized displays appear to offer more variety. When processing is holistic, random displays are seen as more varied. 4. Both variety perceptions and organization drive stated satisfaction and store choice. People are more satisfied with and likely to choose stores carrying those assortments that are perceived as offering high variety and that are displayed in an organized rather than random manner. Our work provides a basic framework for thinking about variety. By helping retailers to understand the factors that drive variety perception, it may be possible to design more efficient, lower cost assortments without reducing variety perceptions and the probability of future store visits.

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    File URL: http://dx.doi.org/10.1287/mksc.18.4.527
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    Bibliographic Info

    Article provided by INFORMS in its journal Marketing Science.

    Volume (Year): 18 (1999)
    Issue (Month): 4 ()
    Pages: 527-546

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    Handle: RePEc:inm:ormksc:v:18:y:1999:i:4:p:527-546

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    Related research

    Keywords: Assortment; Hamming Distance; Store Choice; Variety;

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    Cited by:
    1. Bhatnagar, Amit & Syam, Siddhartha S., 2014. "Allocating a hybrid retailer's assortment across retail stores: Bricks-and-mortar vs online," Journal of Business Research, Elsevier, vol. 67(6), pages 1293-1302.
    2. Breugelmans Els & Campo Katia & Gijsbrechts Els, 2005. "Shelf Sequence and Proximity Effects on Online Grocery Choices," Research Memorandum 052, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    3. Li, Eric A.L., 2014. "Test for the real option in consumer behavior," Research in Economics, Elsevier, vol. 68(1), pages 70-83.
    4. Erik Brynjolfsson & Yu (Jeffrey) Hu & Michael D. Smith, 2003. "Consumer Surplus in the Digital Economy: Estimating the Value of Increased Product Variety at Online Booksellers," Management Science, INFORMS, vol. 49(11), pages 1580-1596, November.
    5. Hwang, M. & Bronnenberg, B.J. & Thomadsen, R., 2010. "An empirical analysis of assortment similarities across U.S. supermarkets," Open Access publications from Tilburg University urn:nbn:nl:ui:12-3736994, Tilburg University.
    6. Raajpoot, Nusser A. & Sharma, Arun & Chebat, Jean-Charles, 2008. "The role of gender and work status in shopping center patronage," Journal of Business Research, Elsevier, vol. 61(8), pages 825-833, August.
    7. Chatterjee, Subimal & Malshe, Ashwin Vinod & Heath, Timothy B., 2010. "The effect of mixed versus blocked sequencing of promotion and prevention features on brand evaluation: The moderating role of regulatory focus," Journal of Business Research, Elsevier, vol. 63(12), pages 1290-1294, December.

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