Hi folks here is an update from
our first blog. We have found an article that might quite answer the thought
that is flowing through most of your minds. Is too much really too good or is
it just a flop. Entitled in the blog are some personal replies we have
commented for some of you whom have posted us a few questions. Once again we
thank you for being an avid reader and supporter on our web blog and we hope to
bring your more post and sharing along the way as journey through the semester.
Through this article that was
published on the New York Times, it shows how studies were done to show the
effects of consumer’s paralysis and how overwhelming choices drive consumers
away. Empirical studies have found that people, regardless of intelligence, do
not always choose well. Often they prefer to let inertia take over, unable or
unwilling to choose for themselves. Well in fact we would like to highlight how
three experiments were done when too many choices were being given to
individuals like ourselves as consumers.
Case-study 1:
In Sweden, where personal
savings accounts were carved out of the social security system in 1998, 9 out
of 10 new entrants to the work force let their investment portfolios go to a
default fund set up by the government, rather than choose one themselves.
Case-study 2:
Too many options may drive
consumers away. In one experiment, Iyengar of Columbia University found that
people who had been shown a selection of six jams in a store were about 10
times as likely to buy a jar as those exposed to a range of 24 flavors.
Case-study 3:
In another study, she found that
people who chose one chocolate from a selection of 30 expressed more regret and
uncertainty about their decision than those who chose among six kinds. That's
because, with 29 other options, there is a bigger chance of losing out on
something better.
Case-study 4:
In one experiment, Thaler and Shlomo Benartzi of
the University of California at Los Angeles, asked employees in one company to
select among three 401(k) retirement savings portfolios. Unknown to the
employees, one portfolio was their own. The other two reflected the average and
median choices of all the workers in the company. Yet only one-fifth of the employees
preferred their own portfolios to the medians. "Apparently people do not
gain much by choosing investment portfolios for themselves," Thaler wrote.
Take a look at the video below,
though this video share with us viewers about the trade secrets in a
supermarket but we want you to take a good look of the array of choices we are
exposed to just by visiting a supermarket today. How confused we are or how
troubled we are in making just a simple purchase on a fizzy drink!
The second video entitled here is
called the paradox of choice which some of you may be looking for, from the
very man who wrote it Barry Schwartz:
Sources:
1. The more choice the better: Yes, no or maybe?
2. Barry Schwartz-
paradox of choice (http://www.youtube.com/watch?v=VO6XEQIsCoM)
3.
Supermarket Secrets (http://www.youtube.com/watch?v=snP40-unO0A)
We hope this update
would have answered most of your questions and we look forward to hear more
from you folks so stay tune for more updates. Below are our replies to the few
individuals who have pop us a question.
51487735 LONER
Hi 51487735Loner from
one and all at JARSolutionz we thank you for reading and providing insightful
details from a businessman perspective. Well yes we do agree that as a business
entity it is important to stand out from your competitors. To stand up and
shine at the occasion, it is necessary to be different but not necessarily
providing extended choices. Well as much you touch base from a businessman
perspective, I guess as a business person you need to know what your consumer
need or want in your targeted market segment. Therefore, providing more choices
may sometimes do more harm than good, in short detrimental spiral effects.
If we may refer to
the link which you have provided:
What could be
understood from Cathay’s offering is that they streamline their Asia Miles
points to four different categories; first class, business class, premium
economy class, economy class. This offering of choice actually helps consumers
avoid the hassle of decision making. In fact it is rather straight forward, if
you fly in a particular class you earn X number of Miles points and yes at the
same time they use the technology of internet to market their system. Therefore
through this system Cathay has indeed help consumers understand their system by
minimising their offering of choices.
40040157 CYNICAL
Hi Cynical we had
great fun reading your comments and you have set us thinking certainly. If we
may refer to your comment, you mentioned about nobody dictates the right choice
and the choice made does not necessarily suit the consumer. Yes certainly
nobody dictates our choices as consumers. As a consumer we perceive what suits
us best and that’s the most important. What may suit you may not suit me.
Next you mentioned
through globalisation we boost our choices and if we make a wrong one we could
always make another. Well we back to differ, if we lose a customer because of
the wide array of choices we offer which cause such confusion, we may be losing
much more money. It actually cost more opportunity cost of losing a customer
then winning one. Coupled with you mentioning that today’s consumers are well
informed and educated, what are your chances of retaining your customers if you
don’t ever streamline your offerings/choices today? Now that we may understand
what consumers want, we are not saying that we do not give them a choice but we
streamline the choices, helping them to affirm their decisions, thus answering
the question of consumer paralysis.
Hey international
blogger thank you for providing your thoughts about our article. You mentioned
that the more products there are on the market, the better it is for consumers
as prices will be kept low. Well having a wide array of choices does not
necessarily mean prices will be kept low; we reckon you may be giving the
example of bulk offering which gives a comparable low pricing or better offers.
We have to be very careful between array of choices compared to bulk discount
because having a large array of choices for example cheese do certainly keep
each branding competitive on how they market their prices but that does not
mean they mark down their pricing.
Let’s look at the
offering of cheese by Park &shop:
If we take a look at
PHILADELPHIA CREAM CHEESE and Boursin cream cheese both are of the same
category, so if we adopt your theory of saying more choice would mean cheaper
pricing, we guess your deduction may be out of line. Boursin in this case has a
strong competitor-ship of not only Philadelphia cheese but also rival
competitors like Arla and Laughing Cow brands but their pricing of their
product still maintains the highest. Therefore we hope that our explanation
would help you see in better alignment how too many choices may cloud a
consumer’s decision and not give bulk discounts instead J
Hey MusicLover
interesting question which you have highlighted. We think it would be hard to
limit the choice in a free market concept. If you would to recall the above
article which we recommend:
As mention in the
article, free marketers believed that wide choices is the positive notion for
us consumers but certainly the experiments conducted from the range from a
simple food choice to a financial choice decision; certainly proves that
too many options would certainly drive consumers away.
Hi 40038229 we heard
your call for a reference to understand more about Consumer’s paralysis. The
link mentioned above would certainly address your dire thoughts about the
topic.
No comments:
Post a Comment