The Challenge of Providing Choice
July 20th, 2007 by 
Administrator
As a Business, we have a couple of retail stores. Can you increase your sales by providing more choice or less?
According to a study conducted in the supermarket of California, two professors, Dr. sheena Iyengar of Columbia University and Dr. Mark Lepper of Stanford University , they had a simulation in which there were two stores. One store had 6 different brands of flavored jam, while another had 24 different brands.
The passerby was monitored, and then studied. The larger display, with 24 brands attracted 60 percent of the people, while the 6 brands attracted only 40 percent.
HOWEVER, only 3 percent of the people who visited the larger display bought, while 30 percent of those visiting the smaller display bought.
That would seemingly indicate that ten times more people visiting the smaller display bought. This purportedly means that giving too much choice to the customer will lead to inaction.
We should give choice, but increasingly consumers are relying on your rrand and your choice to limit it for them.
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Posted in FrontPage, on Business | 
July 25th, 2007 at 2:00 pm
Just to share some of the marketing strategies used by WalMart and SM in their supermarket sections. I have read this and actually copy-edited the actual study conducted or published by Elsevier Science with regards to branding.
Walmart actually benefited from this so-called “limiting choices” strategy. They found out that if you have on display the number 1, 2, 3, 4 and 5 products, customers tend to get confused and actually don’t purchase from that specific product line. What they did was to cut off the number 2, 3 and 4 and left behind the 1 and 5. Number 1 was either the most expensive or the most popular while 5 was the opposite. And then, they contracted the manufacturer of the number 1 and asked them to manufacture for Walmart but without the branding. Supposedly, with lower cost than with those carrying the #1 brand.
What they have now is a product of the number 1 quality but bringing Walmart’s logo or brand but cheaper than #1. Or for SM’s case, the BUNOS brand.
Now, the customers only have 3 choices, the most expensive brand, Bonus brand (cheaper than #1 but the same quality), and the #5 brand (lowest in price and quality). Basically, the customers would most probably go for the Bonus brand because of the cheaper price and good quality.
For SM, thats bigger profit than from a sale of the #1 brand which because of being #1, only offers small discounts.