A deeper look at product variety

A bit more on product choice… First, Gourville argues that product variety may backfire if the consumer is faced with too many choices. He suggests that marketers limit the number of SKUs to avoid confusing the consumer. One important distinction that he makes is differentiating different types of product choice. “Aligned” assortment is generally good – whereby the tradeoffs are beneficial to the customer. Differing size, length and color of Levi’s 501’s is an example that he uses. “Non-aligned assortment” is where the customer has to make tradeoffs across dimensions – that is, one option precludes a different choice (for this one, he uses the example of entrée at a restaurant). Gourville argues that over choice comes from having to defend the channel from competitive domination (e.g. shelf space in a super market).

The second article looks at the The Long Tail in Hollywood. The authors suggest that shoppers will purchase from both the tail (niche) and from the head (superstar marketing). Superstar marketing came about due to scarcity of distribution. There is only a limited amount of shelf space, so retailers carried what sold (I certainly found this out the hard way 15 years ago). There were two particularly interesting points in the article. First, with increased production capabilities in the hands of more suppliers and broader distribution channels (i.e. kids with video cameras, editing software and youtube.com), the clutter in the tail could lead to the over choice problem discussed above. Second, even if there is money to be made in the tail, it may be too difficult for a single producer or distributor to aggregate that demand in commercially meaningful way.

There are a few key points that are important in understanding the long tail and the notion of choice that I think both articles missed: 1) the buyer-seller relationship is shifting – consumers are becoming more discerning in their tastes and in many cases have less brand allegiance than in the past; 2) technology is allowing for greater choice, but 3) it also offers a greater degree of filtering (ability to narrow choice). Chapter 14 in Chris Anderson’s book, The Long Tail summed up his nine rules for developing a long tail business as “make everything available and help me find it”. Anyone interested in the product variety problem should definitely