the effect of product assortment on buyer preferences

The Effect of Product Assortment on BuyerPreferences

ITAMAR SIMONSONStanford University

Using product assortment to gain a sustainable differentiation is becoming increasinglydifficult in the current retail environment and is likely to become even more challenging asthe importance of location continues to decline and the share of Internet-based retailingincreases. Recent research, however, suggests that product assortment can play a key role,not only in satisfying wants, but also in influencing buyer wants and preferences. Thisarticle reviews and synthesizes empirical evidence indicating that (a) retailers can use theassortment subset that buyers consider to enhance the likelihood that a purchase will bemade and to affect the specific option selected, (b) the manner in which the set ofconsidered options are presented also affects buyer preferences and purchase decisions,and, (c) the effects of the considered options and presentation format interact with otherelements of the marketing mix such as sales promotions. The implications of these findingsfor retailers, including ethical aspects of influencing buyer preferences, are discussed.

Marketing management and retailing textbooks highlight the importance of productassortment in achieving differentiation and satisfying the wants of target shoppers betterthan the competition (e.g., Kotler 1997, pp. 571–3). However, offering products that asignificant number of consumers want and which are not also available from competingretailers is becoming increasingly difficult. Indeed, any product and style that provepopular are rapidly adopted by other retailers. Furthermore, as the importance of locationdecreases and the share of electronic commerce and catalogs increases, achieving signif-icant differentiation through product assortment is likely to become even more challeng-ing (but see Alba et al. 1997). For example, one would be hard-pressed to find significantdifferences between the book selections of Amazon.com and Barnes & Noble.com

Despite this trend, concluding that product assortment (i.e., the total set of items offeredby a retailer, reflecting both the breadth and depth of offered product lines) will becomean (important) nonfactor in retail competition may be premature. In particular, retailersand marketing textbooks might have treated the role of assortment too narrowly, focusing

Itamar Simonson is the Sebastian S. Kresge Professor of Marketing, Graduate School of Business, StanfordUniversity, Stanford, CA 94305-5015; tel. 650-725-8981;[email protected]. The paper hasbenefited from the comments of Ran Kivetz.

Journal of Retailing, Volume 75(3) pp. 347–370, ISSN: 0022-4359Copyright © 1999 by New York University. All rights of reproduction in any form reserved.

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on its function in satisfying customer wants. However, recent research suggests thatassortment and the manner in which it is presented have another key role, which has notreceived much attention. Specifically, in addition to satisfying existing wants, assortmentcan shape consumer preferences and affect whether and what they purchase.1

The present research reviews and integrates some of the findings relating to the effectof assortment on purchase decisions and offers general propositions for retailing research-ers and practitioners. It is proposed that, as product assortment becomes a less importantdifferentiating factor, there is a need to focus more on the design of the assortment subsetthat individual consumers consider (the “considered assortment”) and the manner in whichthese products are displayed and evaluated. Thus, in addition to the more global functionof assortment in satisfying consumer wants, marketers can tactically design their assort-ment so as to influence buyers’ preferences.2

The Effect of Product Assortment on Preferences: Empirical Evidence

Consistent with classical economic theory it has been assumed that consumers canassess the utilities or values of products based on their characteristics and that these valuesguide purchase decisions. For example, given information about the memory size, speed,monitor type and other features of a personal computer, a consumer can assess the valueof that product. If offered more than one personal computer, the consumer can simplydetermine the value of each alternative and then select the one with the highest overallvalue.

Recent research on decision making, however, has revealed that people often do nothave clear and stable preferences, even when they have complete information about thecharacteristics of the alternatives (for reviews, see, e.g., Bettman, Luce, and Payne 1998;Simonson 1993). These findings are consistent with the idea that, in many situations,consumers construct their preferences when faced with a specific purchase decision, ratherthan retrieve preformed evaluations of product features and alternatives. Because prefer-ences are constructed for a specific choice set and decision task, they depend on theparticular characteristics of the considered options and the manner in which they areevaluated.

These findings have important marketing implications, suggesting that the impact ofproduct assortment cannot be assessed in isolation based solely on the utilities of theoffered items. Instead, one has to analyze carefully the product assortment context andspecific implementation, considering such factors as the assortment subset that consumerscompare, the manner in which options are presented and evaluated, and interactions withother marketing mix variables (e.g., promotions).

A comprehensive review of all the findings that are consistent with this generalproposition is beyond the scope of this article. Instead, building primarily on studies inwhich the author has been involved, this article focuses on three main categories ofassortment effects on preferences. The first category, choice set (or context) effects, refersto the effect on consumer preferences of the composition and configuration of theassortment subset that consumers consider. Second, holding the considered set constant,

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product assortment can affect purchase decisions based on the manner in which it ispresented and evaluated by consumers. And third, the effect of product assortment onpreferences likely depends on other marketing mix elements, such as price, promotions,and advertising. This interdependence will be illustrated based on studies that haveexamined the interaction between assortment and sales promotions.

The Effects of Considered Assortment on Consumer Purchase Decisions

There is growing evidence that consumers tend to focus on the set of options theyhappen to observe in a particular context (e.g., the items on the shelf) and use that set todetermine which, if any, of the options is attractive. That is, instead of thinking globallyabout other available options in the same category and using other relevant prior knowl-edge, consumers tend to overweigh the information provided by the particular set underconsideration. This tendency can have significant implications for retailers, since con-sumers typically consider only a subset of the entire product assortment. Accordingly, theconfiguration of the considered subset, rather than the total assortment, can be the keydeterminant of purchase decisions. Next, some of the findings regarding the effect ofchoice sets on consumer preferences are reviewed and illustrated, leading to severalgeneral propositions.

The Effect of Adding Options on Purchase Decisions

Williams-Sonoma, a mail-order and retail business located in San Francisco, used tooffer one home bread maker priced at $275. Later, a second home bread maker was added,which had similar features except for its larger size. The new item was priced more than50% higher than the original bread maker. Williams-Sonoma did not sell many units of thenew (relatively overpriced) item, but the sales of the less expensive bread maker almostdoubled.

This effect on sales, which Williams-Sonoma did not anticipate, illustrates the effect ofchanging the set of alternatives under consideration (or the choice set) on consumers’purchase decisions. Specifically, the effect of the second, relatively overpriced breadmaker on the sales of the existing one is consistent with experimental evidence that addingan alternative, which is inferior compared to another alternative, increases the share of the(relatively) superior alternative (Huber, Payne, and Puto 1982). For example, Simonsonand Tversky (1992) gave one group of respondents a choice between $6 and an elegantCross pen. A second group of respondents chose between $6, the same Cross pen, and asecond pen that was specifically included because it was less attractive than the Cross pen.As expected, in the presence of the less attractive pen, the choice probability of the Crosspen increased (from 36% to 46%) at the expense of the $6 cash (virtually no one chosethe unattractive pen).

In another study, Simonson and Tversky presented respondents with color pictures anddescriptions of microwave ovens taken from the Best catalog. In one version, only two

The Effect of Product Assortment on Buyer Preferences 349

alternatives were presented: an Emerson oven with a regular price of $109.99, and a largeroven by Panasonic with a regular price of $179.99. Both ovens were on sale for 35% offtheir regular price. The other version of the questionnaire (evaluated by a differentrespondent group) included, in addition to the Emerson and Panasonic ovens, anotherPanasonic oven that was on sale for only 10% off the regular price. As expected, theaddition of the relatively less attractive Panasonic oven (only 10% off) significantlyincreased the share of the original Panasonic (from 43% to 60%), with the Emerson ovenbeing the big “loser.” Thus, the addition of the relatively inferior Panasonic caused somerespondents, who would have otherwise preferred the Emerson, to choose the (lessexpensive) Panasonic.

These findings are consistent with the notion that consumers have difficulty assessingthe value of an option (e.g., a Cross pen) when it is considered in isolation. One mightassume that consumers can evaluate each option relative to other alternatives to whichthey have been exposed in the past and other relevant previously acquired information.However, because such prior knowledge is less salient and needs to be retrieved frommemory, consumers are likely to evaluate the attractiveness of a product relative to theother options that are considered simultaneously (see Biehal and Chakravarti 1983). Thus,for example, if a page in a catalog presents three bread makers, consumers are more likelyto evaluate each of these options relative to the other two, as opposed to comparing it tobread makers encountered in the past and information stored in memory. Consequently, ifone option appears clearly superior to another option under consideration, consumers mayconclude that it is an attractive alternative, which increases the likelihood of making apurchase.

This analysis has two key implications regarding the impact of product assortment onpurchase decisions. First, they indicate that the total assortment that retailers offer mayhave less impact on purchase decisions than the particular assortment subset that buyersconsider. That is, if retailers can control which specific options buyers consider, then theycan potentially design these subsets in a way that will enhance the likelihood of makinga purchase and of selecting a specific (high-margin) product.

A second, more specific implication relates to a particular choice set configuration thataffects purchase probabilities in predictable ways. Consistent with the above findings, theaddition of a relatively inferior option, as in the Williams-Sonoma and pen examples, canincrease the likelihood that a purchase will take place. Based on the same principle, theaddition of an option that is inferior relative to one existing option but not another, as inthe Microwave example, can shift choices from a lower-priced option to a higher-priced(presumably, also higher-margin) option.3 That leads to the following propositions:

● Proposition 1a: The probability that a consumer will make a purchase is enhancedif the considered assortment is designed such that one option is clearly superior toanother.

● Proposition 1b: The choice probability of a particular target option can be enhancedby adding an option that is clearly inferior relative to the target option, but notrelative to other options in the considered product assortment.


The Effect of Preferences For and Against Compromise Options on PurchaseProbability

Another effect of the configuration of the product assortment under consideration onpurchase decisions occurs when one option is perceived as a “compromise” and otheroptions as noncompromise or “extreme” options. Previous research indicates that, in somecases consumers tend to prefer compromise options, whereas in other cases they tend toavoid compromises (e.g., Simonson and Tversky 1992).

For example, respondents in one study were asked to choose among 35-mm camerasvarying in terms of their features and prices (descriptions and photos were taken from theBest catalog). One group was given a choice between a Minolta X-370 priced at $170 anda Minolta 300i priced at $240. A second group was given the same two options and anadditional camera, the Minolta 7000i priced at $470. Respondents in the first group weresplit evenly between the two options. In the second group, even though the added optionwas selected by 24% of the respondents, the share of the middle option (the Minolta3000i) did not decline and actually increased somewhat (to 57%). In other words, theaddition of the Minolta 7000i increased the share of the middle camera (the one mostsimilar to the added option) at the expense of the cheapest camera.

Simonson (1989) demonstrated several other cases whereby the relative shares ofoptions are increased when they are the middle or compromise alternatives in the set underconsideration. However, the preference for compromises is not universal, and there aremany cases in which consumers actually tend to avoid middle options. For example, whenselecting among ice creams that vary in taste and fat, consumers typically take either thebest tasting option or the one with the least fat, but not the ice cream with intermediatevalues. Similarly, when choosing among insurance plans, consumers tend to choose a planthat offers the best coverage at a relatively high premium or a plan with the least coverageand the lowest premium, but they tend to avoid compromise plans. It seems that someattribute tradeoffs, such as between ice cream taste and fat, tend to elicit preferences for(relatively) extreme options (e.g., “go for the best”), as opposed to (wishy-washy)compromises.

It is noteworthy that the preference for compromise options was also observed with achoice set of paper towels, where respondents could “feel” each option before making achoice. Paper towels are a very familiar category with significant quality differencesamong brands, which could be revealed by inspecting the products. Thus, the fact thatconsumers were influenced by whether a particular paper towel was a compromise in theset suggests that, even when consumers have full information about quality, they are stillinfluenced by the position of options in a particular set under consideration.

There is currently no comprehensive theory that allows us to predict the magnitude ofthe compromise effect and, in some cases, even whether it would be observed. Intuitively,however, one would expect to obtain a compromise effect when the option set involves atradeoff between attributes that (in the relevant range) are characterized by diminishingmarginal value. For example, although consumers prefer a laptop computer with morememory and lower weight, the marginal contribution of better values on these dimensionsis probably diminishing. Accordingly, we would expect to observe a compromise effect inthis case. Conversely, when an important attribute on which options vary has increasing


marginal value, we would expect to observe a preference for “extreme” options. Forexample, if consumers tend to prefer either very high insurance coverage (with highpremium) or very low coverage, or if they like ice cream with exceptional taste (or,alternatively, with very low fat level) disproportionally more than a conventional icecream, then we would expect that most consumers will actually avoid “compromise”options. Future research might examine more formally the conditions that moderate thepreference for and against compromise options.

For retailers, the fact that consumers systematically prefer compromise or extremeoptions in choice sets under consideration provides further evidence that the compositionof product assortment and, in particular, the subset of options that consumers evaluatejointly, can have a significant impact on purchase decisions. Because compromise optionstend to be favored in some cases but not in others, one needs to determine first which caseapplies and then choose the configuration that favors the “preferred” (e.g., high margin)option.

● Proposition 2: Consumers tend to favor compromise (middle) options for someproduct categories and attributes and tend to avoid compromise options for othercategories and attributes. A consistent preference for compromise options is ex-pected when the differentiating dimensions are characterized by diminishing mar-ginal values, whereas preferences for noncompromise options are expected when theinstrumental attribute is characterized by increasing marginal value. Retailers candetermine which case applies in a particular situation and design the consideredassortment such that it will appeal to consumers’ preference for or against compro-mise options.

The Effect of the Number of Quality Levels in Product Assortmenton Purchase Decisions

One characteristic of product assortments is the number of quality levels (or tiers)offered. Some retailers, including many catalogs, offer just one quality level, whereasothers offer two, three, or even four quality levels. For example, a store’s assortment mayinclude a generic brand, a store brand, and a national brand, or alternatively, a store brand(e.g., a store brand of ice cream), a mid-tier national brand (e.g., Dreyer Ice Cream), anda top-tier (premium) national brand (e.g., Haagen Dazs ice cream). Similarly, a retailermay offer a basic VCR model with limited features, a midline VCR with some additionalfeatures (e.g., hi-fi), and a top-of-the-line VCR with the most advanced features.

Extensions of research on the compromise effect indicate the number of quality levelsthat buyers consider affect the likelihood that a relatively more expensive, higher marginoption will be selected. Simonson and Tversky (1992) showed that, in many cases, addinga third, higher-quality tier to the set of considered options leads choosers to prefer ahigher-quality, higher-price option, with the cheapest option losing the most. On the otherhand, adding a third, lower quality option to a set does not shift choices to lower qualitylevels. They also showed that, in most cases, introducing an option with an intermediateprice-quality level to a set with a low tier option and a high-tier option takes much greater


share from the low tier alternative. In fact, in some cases, adding an intermediate optionincreases the share of the high-price, high-quality option.

For example, one group of respondents chose between a pair of binoculars with 7Xmagnification that cost $20 and a pair with 17X magnification that cost $44. A secondgroup of respondents chose from a set that included the same two options as well as a pairof binoculars with intermediate attribute levels - 12X magnification and a price of $36. Inthe first group 45% chose the cheaper pair (7X, $20) and 55% chose the more expensivepair (17X, $44). By contrast, in the second group only 5% chose the cheaper pair, 71%selected the expensive pair, and 24% chose the (added) intermediate pair. In other words,the introduction of the intermediate pair actually increased the share of the expensive pair.

Thus, when buyers consider options at three or more price-quality levels (comparedwith just two levels), they tend to avoid the cheapest, lowest quality option but not themost expensive, highest quality option. Simonson and Tversky (1992) suggested thatconsumers are particularly averse to choosing the lowest level on the instrumentalattribute (quality, performance) that represents the purpose of the purchase, whereas theyare less sensitive to choosing the worst level on other attributes (e.g., price). Moreover,although consumers generally prefer lower prices, the highest price often signals higherquality (e.g., Zeithaml 1988) and the lowest price signals lower quality, and theseprice-quality inferences are likely to be more salient in a set of three or more options thanwhen there are just two options under consideration.

These findings have an important implication with respect to the impact of productassortment on purchase decisions. Specifically, retailers could enhance the share ofhigher-priced, higher-margin options by introducing an even higher-price, higher-qualityoption, even if the added option does not capture a significant share. For example, arestaurant might be able to increase the probability of ordering an expensive lobster byincluding in the menu an even more expensive abalone entree. Furthermore, retailers canintroduce an intermediate option to decrease the purchase probability of a cheap, low-margin option.

● Proposition 3a: The purchase likelihood of a higher-price, higher-quality item can beenhanced by introducing an even higher-price, higher-quality item to the subset ofoptions that consumers consider.

● Proposition 3b: If the considered product assortment includes two options that varyin price and quality, the addition of either an intermediate or a high price-qualityalternative takes more share from the low price-quality option than from the otherexisting option.

The Effect of Offering Multiple Attractive Products on Purchase Timing

The findings presented so far indicate that the considered assortment can influencewhether a purchase is made and which option is selected. A related finding is that theconsidered assortment can also affect the timing of purchase, and specifically, whether apurchase decision is delayed. Tversky and Shafir (1992) illustrated this effect using thefollowing two versions of a consumer choice problem:


● Version A: Suppose you are considering buying a CD player and have not yetdecided what model to buy. You pass by a store that is having a 1-day clearancesale. They offer a popular Sony player for just $99, well below the list price. Doyou?:

(y) buy the Sony player(z) wait until you learn more about the various models

● Version B: Suppose you are considering buying a CD player and have not yetdecided what model to buy. You pass by a store that is having a 1-day clearancesale. They offer a popular Sony player for just $99, and a top-of-the-line Aiwaplayer for just $169, both well below the list price. Do you?:

(x) buy the Aiwa player(y) buy the Sony player(z) wait until you learn more about the various models

In the group that received Version A, 66% indicated that they would buy the Sonyplayer. By contrast, in Version B only 54% chose to buy either the Sony or the Aiwaplayer and 46% preferred to wait. In other words, expanding the considered set to includea second attractive player increased the share of respondents who decided to delay thedecision. The explanation of this result is that, with two or more attractive options,consumers experience decision conflict and have difficulty determining which is theoverall best alternative. Because consumers try to minimize the risk of making inferiorchoices, they prefer to delay the decision till they have the information needed foridentifying the best overall alternative.

This finding suggests that retailers may actually lose by offering too much assortment,if potential buyers consider two or more options about equally attractive. A more effectivestrategy seems to be to design the considered assortment such that a consumer is given achoice among several options, but the set includes one and only one option that is superiorfor that consumer. For example, based on the pattern of past purchases, a direct marketercan design its offerings to a particular consumer such that one option is likely to appearclearly superior to all others.

● Proposition 4: Presenting to consumers two about equally attractive options can leadto a purchase delay and a loss of sales.

Assortment Choice Set Effects Across Related (Complementary) Categories

The effects of product assortment discussed so far have all related to choices in a singleproduct category, where a consumer needs to decide which of the available options toselect. However, consumers usually purchase more than one product or service on thesame purchase occasion. A question that naturally arises is how product assortment affectspurchases of related items.

A simple rule is that the purchase of one item increases the likelihood of selecting a


complementary item and decreases the likelihood of selecting a substitute item. Consistentwith economic theory, complementarity, and substitutability are typically defined in termsof product function, such as coffee and cream, coffee and tea, or chicken and red wine.However, Dhar and Simonson (1999) have recently proposed a broader definition ofcomplements, which refers to the fit between coconsumed items in terms of their attributelevels rather than their function.

Consider the example in Table 1. A large majority of respondents indicated that Mr. Awas more likely to selected the superior, more expensive beer when he was sitting in thesection with a superior view. Similar findings were obtained with a variety of problemsand question formats, including a study in which respondents made real choices of a prizebundle (an evening out, including a performance and a meal). More generally, Dhar andSimonson showed that, in tradeoffs between a goal (e.g., maximizing pleasure) and aresource (e.g., money), consumers prefer “highlighting,” whereby they consistently em-phasize the goal despite high resource requirements on one occasion, and they consistentlyminimize resource allocation on another occasion. These results indicate that consumersseek consistent attribute levels within a consumption episode, with one enjoyable, highquality-high price choice increasing the likelihood of making a second high quality-highprice choice, even though the two choices are not functionally related. Such preferencesfor co-consumed items are observed when each choice involves a tradeoff between a goal(e.g., enjoyment) and a resource (e.g., money).

In other situations, where the tradeoff is between two goals (e.g., pleasure and goodhealth), consumers prefer to balance two items consumed during the same episode.Consider the example in Table 2. In this case most respondents expected Mr. A to take thetasty, less healthy dessert after a healthy entree. More generally, when trading off twogoals, such as pleasure and good health, consumers tend to balance their choices withina particular episode. Such a preference for balancing choices is also observed whenconsumers make two similar selections on the same occasion. For example, consider aconsumer who smokes one cigar before dinner and one after dinner. This person has twocigar types, one that is higher-quality, higher-price and a second that is lower-quality,

TABLE 1

Baseball GameAssume that Mr. A, who is a baseball fan, frequently goes to watch games at the local stadium. Mr. A

often buys beer at the stadium, purchasing expensive imported beer on some occasions andstandard domestic beer on other occasions.

Consider his two recent trips to baseball games:On one trip, Mr. A purchased a ticket in a section with a superior view at the price of $16.On another trip, Mr. A purchased a ticket in a section with an average view at the price of $8.On each occasion, Mr. A decided to buy some beer at the stadium. The concession stand at the

stadium offered a choice between two beers: a gourmet imported beer priced at $4 and a regulardomestic beer priced at $1.50.

When was Mr. A more likely to buy the expensive imported beer—when he paid $16 for the ticketwith the superior view or when he paid $8 for the ticket with average view?

Superior View Average View No Difference


lower-price. In this case, if the high/low price cigar is smoked before dinner, the low/highprice cigar tends to be preferred after dinner. Note that, unlike the baseball example above,the two choices relate to the same item (cigar) as opposed to two different items (a seatand a beer), which generates the different preferences.

These findings suggest that product/service assortments can be designed to appealto consumers’ preferences for complementary items. For example, today some foodestablishments specialize in health food, such as fresh fruit smoothies and nonfatfrozen yogurt, whereas others offer mostly tasty but unhealthy food, such as pizzaparlors. This research suggests that pizza parlors can support their main (pizza)business by also offering fresh fruit smoothies, which allow customers to balance the“sin” associated with eating pizza. Similarly, an entertainment establishment mayoffer package deals for multiple occasions, such as a season ticket that offers ahigh-pleasure combination on some occasions (e.g., better seat and food) and a lessattractive package on other occasions.

Marketers may also try to initiate a particular context by influencing the first selecteditem. For example, a restaurant may offer a glass of a high-quality wine at a discount sothat consumers will be more likely to designate the meal as a “special” event. On the otherhand, offering a cheap, low-quality item for free may have a detrimental effect on the levelof other items in the same consumption context.

● Proposition 5: For items that are purchased on the same occasion, the attribute levelsof one item can affect the attribute levels of another item, even when the two are notfunctional complements or substitutes. Specifically, in tradeoffs between a goal anda resource, consumers make consistent choices within an episode, whereas intradeoffs between two goals they prefer balancing the two goals within eachconsumption episode.

The findings reviewed so far indicate that, holding the overall assortment constant,marketers can enhance their sales and influence the purchase probabilities of differentitems by carefully designing the assortment subset that consumers observe and consider.However, the composition and configuration of the considered assortment is not the only

TABLE 2

DessertAssume that Mr. A is considering having some dessert after dinner at a nice restaurant. Mr. A eats out

frequently, eating low-fat, healthy desserts on some occasions and rich tastier desserts on otheroccasions. Consider his two recent trips to a restaurant:

On one occasion, Mr. A had a main course of tasty but unhealthy New York steak.On another occasion, Mr. A had a main course of a healthy, but not as tasty, low-fat pasta dish.On each occasion, after the main course, Mr. A is deciding between two desserts: a great tasting, but

high-fat, chocolate cake and a low-fat seasonal fruit salad.When is Mr. A more likely to order the great tasting but fatty chocolate cake—when he just had a

tasty, unhealthy steak or when he had a healthy, less tasty pasta dish?

Tasty Steak Healthy dish No Difference


determinant of purchase decisions. In particular, holding the considered options constant,purchase decisions may depend on the manner in which product assortment is presentedand evaluated. This category of effects on consumer preferences is discussed next.

The Effect of Assortment Presentation on Purchase Decisions

Several recent studies illustrate some of the ways in which assortment organization, anddisplay, can affect preferences. Three such effects are described next.

Side-by-Side Versus Separate Brand Displays

A retailer can display all brands in a product category side-by-side, such that consumerscan easily make comparisons among them, or brands can be displayed in a way that is lessconducive to comparisons (for example, generic brands were typically in a separatesupermarket aisle). Also, promoted brands are often displayed at the end of the aisle, suchthat comparisons to other brands in the category are more difficult to make. A questionthat arises naturally is whether the mere fact that a brand is displayed separately, holdingthe assortment in the category constant, affects the purchase decisions that consumersmake.

Recent research indicates that a separate display increases the purchase share of brandsthat are associated with high perceived quality and high price, whereas it decreases theshare of less expensive brands (Nowlis and Simonson 1997). In other words, brandsassociated with lower perceived quality, which offer a lower price or superior features(e.g., higher magnification or vitamin content), are relatively better off when they aredisplayed next to other brands, such that making comparisons is easy. Consider theexample in Table 3 in which one group of respondents were asked either to make a choice(i.e., directly compare the two options) and a second group rated each option separatelyin terms of purchase likelihood.

If display format had no effect on preferences, then we would expect the choice shareof each brand to be similar to the share of respondents who rate that brand higher than theother brand. However, the results of seven studies reported by Nowlis and Simonsonindicate that the choice task, in which respondents need to make direct comparisonsbetween the brands, consistently favors (relative to the rating task) lower price options andoptions that have superior features, but weaker brand name. Specifically, across differentstudies, the choice share of brands with lower price or superior features brand wasbetween 10% and 30% greater than the share of respondents who rated these optionshigher in terms of purchase likelihood.

These results can have important implications, because it is reasonable to assume thatdisplay formats that make it easy to compare brands tend to elicit preferences similar toa choice task, whereas separate displays are more similar to the rating task. Thus, brandsassociated with higher perceived quality would benefit most from a separate display and


from being distributed through channels that do not also offer competing brands, and viceversa for lesser-known brands with lower prices and/or superior product features.

● Proposition 6: Consumers are relatively more likely to purchase high (perceived)quality, high price brands when they are displayed separately rather than next tocompeting options, and vice versa for low quality, low price brands.

Assortment Display by Brand Versus by Model

As described above, there is evidence that consumers tend to avoid the cheapest optionin the set of options presented to them (Simonson and Tversky 1992). An importantimplication of this finding is that the manner in which product assortment is displayed canhave a significant effect on consumer choices. This implication is based on the reasonableassumption that consumers evaluate options the way they are displayed, as opposed to“reorganizing” options in their minds to fit some preconceived choice rule (see, e.g.,Bettman and Kakkar 1977). Specifically, retailers can often display options either bybrand or by model type. For example, a store or a catalog can display TVs by brand, suchthat all Sony TVs are presented together, Magnavox TVs are shown on a separate display(or page), and so on. Alternatively, the retailer can display all “basic” TVs together,including Sony Basic, Magnavox Basic, and so on, “midline” TVs of all brands in aseparate display, and “top-of-the-line” TVs in a third display.

TABLE 3

Buyer Preferences in Choice vs. Ratings: An Example● Choice Task

TOASTERSImagine that you would like to buy a toaster. At the store you find the two alternatives below.ALTERNATIVE A: K-MART store brandFeatures: -2 wide slots;

-Mechanism centers bread in slot-Automatically pops the toast up when done;-Removable crumb tray

Price: $19.99ALTERNATIVE B: BLACK & DECKERFeatures: -2 wide slots;

-Mechanism centers bread in slot-Automatically pops the toast up when done;-Removable crumb tray

Price: $26.99Which alternative would you buy?

● Purchase Likelihood Rating Task:In the rating task, respondents were asked to imagine that they wanted to buy the product (e.g., a

toaster); they were presented with each alternative (the same alternatives included in the choice task)separately and asked to indicate their purchase likelihood of that option, using the scale below:Very Unlikely to buy 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Very Likely to buy


The tendency to avoid the cheapest option in a set of three or more options suggeststhat, if product assortment is organized by brand, then buyers are likely to considertogether different tiers of particular brands. Because consumers tend to avoid the cheapestoption, this display format should result in a relatively low share of the low tier (basic)model. If, on the other hand, products are organized by product tier, then each displayincludes different brand tiers (e.g., Sony, Magnavox, and Goldstar) of a particular modeltype (e.g., top-of-the-line), in which case consumers are expected to avoid the cheapestbrand (e.g., Goldstar).

These predictions were supported in a study by Simonson, Nowlis, and Lemon (1993),who asked consumers to make choices in various categories, with the set organized eitherby brand or by price-quality tier. Consistently, when options were organized by brand,respondents were relatively more likely to select the midline or top-of-the-line options andless likely to select the cheapest option, whereas when options were displayed by producttier, consumers were more likely to select the mid-quality and top quality brands.

● Proposition 7: The choice share of the cheapest considered brand is lower whenproducts are displayed by model tier, whereas the share of the least expensive modelis lower when product display is organized by brand.

Using Incomplete Option Descriptions to Influence Consumer Choices

When presenting their assortment to consumers, retailers can often present only partialdescriptions of options’ attributes. For example, a computer retailer may choose not topresent the weight or screen resolution for some portable personal computers. Further-more, retailers decide on the position of each product relative to other displayed options.Thus, if a particular piece of information, such as weight, is provided for two portablesthat are displayed side by side, a buyer can easily compare the two options on thatattribute, whereas if attribute information is available for one option, but not the other, acomparison of the options becomes more difficult.

Research by Slovic and McPhillamy (1974) and by Kivetz and Simonson (1999)suggests that such decisions about option descriptions, and particularly, the attributes onwhich buyers can or cannot make direct comparisons of options, might have a significanteffect on purchase decisions. Specifically, consumers seem to overweigh attributes thatallow them to make direct comparisons between considered options at the expense ofattributes that are unavailable for some of the options. In fact, Kivetz and Simonsondemonstrated that a systematic manipulation of missing attribute information can lead tointransitive preferences, whereby A is preferred to B, B is preferred to C, but C ispreferred to A. Consider the example in Table 2

In a study using the example shown in Table 4, respondents (at an airport) were askedto choose between each pair of PC options (A & B, B & C, and C & A). Theresultsindicated that 28% of the respondents preferred A to B, B to C, and C to A, indicatingintransitive preferences. Kivetz and Simonson examined alternative ways to decrease thetendency to overweigh attributes on which options can be directly compared. One sucheffective debiasing procedure involved asking respondents to rate the importance of each


attribute before making choices, where the importance ratings guide the subsequentchoices.

These findings indicate that retailers can use the information provided about options asa tactic to enhance the attractiveness of a designated (e.g., high margin) option by makingit easy to make comparisons on attributes on which that option is superior but not on otherattributes. Of course, certain attributes (e.g., price) must be presented, but informationabout other attributes may or may not be presented, with missing values provided only onrequest.

● Proposition 8: Retailers can increase the share of a target option by making it easyfor buyers to compare products on attributes on which the target option is superiorwhile making comparisons on other attributes more difficult.

The Interaction Between Product Assortment and the Marketing Mix:The Case of Sales Promotions

So far we have examined the effect on purchase decisions of the configuration of theassortment subset that consumers consider and the manner of presentation. Recentresearch on the construction of consumer preferences has also shown that the effect ofproduct assortment on purchase decisions depends on other marketing mix variables. Theeffects of these marketing variables, in turn, depend on the assortment subset thatconsumers consider. In particular, several studies have examined the interaction betweensales promotions and the set of options that consumers consider, as described next.

The Effect of Considered Assortment on Asymmetric Promotional Response

Blattberg and Wisniewski (1989) and others have observed an asymmetric response topromotions: the rate of switching from a low-quality low-price brand (e.g., a private label)to a promoted high quality high price brand (e.g., a well-known national brand) tends tobe significantly greater than the rate of switching from a high quality brand to a promotedlow-quality brand. Nowlis and Simonson (in press) recently proposed that asymmetric

TABLE 4

Computer optionsPortable PC X Portable PC Y Portable PC Z

Speed(range: 85 to 200MHz)

(InformationUnavailable)

166 Mhz 100 MHz

Memory(range: 4 to 32MB Ram)

12MB Ram (InformationUnavailable)

24 MB Ram

Battery Life(range: 1 to 11 hours)

8 hours 3 hours (InformationUnavailable)


switching depends on the assortment of products that consumers consider. Specifically,they show that, if consumers consider three brand quality levels, such as a generic brand,a private label, and a national brand, asymmetric switching is eliminated. Briefly, buildingon an earlier finding of Simonson and Tversky (1992) regarding the effect of adding amid-tier brand on the shares of existing low-tier and high-tier brands, Nowlis andSimonson propose that the mere fact that consumers consider three quality levels neu-tralizes the forces that lead to asymmetric switching. For example, they demonstrate thatpromotions on private labels are as effective as promotions on national brands whenconsumers’ consideration sets include also a generic brand, whereas asymmetric switchingis observed in the absence of a generic brand. In addition, Nowlis and Simonson show thatasymmetric switching and the elimination of the effect if considered assortments includethree quality levels also occur when consumers consider three model (rather than brand)tiers.

These findings indicate that retailers can affect the response to their promotions bycontrolling the considered product assortment. For example, retailers can encourageregular users of national brands to try a promoted store brand by displaying a genericbrand prominently, so as to enhance the likelihood that shoppers will notice all three brandlevels.

● Proposition 9: Asymmetric promotional response, whereby regular buyers of alow-tier product are more likely to switch to a promoted high-tier product thanhigh-tier buyers to a promoted low-tier product, is eliminated when buyers considerproducts at three quality tiers.

Product Enhancements and Promotional Premiums

Although assortment typically refers to the collection of individual items offered,retailers and manufacturers increasingly offer consumers bundled products and premiumsor gifts with purchase (see, e.g., Blattberg and Neslin 1990). Such tactics allow marketersto differentiate their product offerings and to use one product to promote another.Although these tactics can be effective in increasing sales, recent research indicates thatthey may also hurt sales if consumers find one component of a bundle or the offered (free)premium unattractive.

Specifically, Simonson, Carmon, and O’Curry (1994) show that adding a productfeature or a premium that many consumers perceive as having limited or no value, whetheror not it is free, can significantly decrease sales of the core product. For example, oneproblem was based on an actual sales promotion in which consumers were given a choicebetween two brands of brownie cake mix: Pillsbury and the Lucky Supermarket brand.The nonvalued premium was a Collector’s Plate that could be purchased for $6.19 (i.e.,purchasing the Collector’s Plate was optional). There were three versions of the choiceproblem. In one version, the option to buy the Collector’s Plate was offered to buyers ofthe Pillsbury brand; in a second version, a Collector’s Plate was offered to buyers of theLucky store brand; and the third version did not mention the Collector’s Plate promotion.


The results indicated that brand shares were consistently smaller, by an average of 13%,when they offered the option to obtain the Collector’s Plate. Similar results were obtainedin several other problems.

These findings suggest that consumers often automatically avoid alternatives withfeatures, such as premiums, that have little (perceived) limited or no value, even when theadded features are free and optional. Thus, retailers and manufacturers should be verycareful when designing their product assortment, such as bundling different items andusing promotions that involve premiums or other offers. If a significant share of consum-ers perceive the premium or a component of a bundle as having limited value, even whenthis premium is optional and/or free, sales of the promoted item may actually bedecreased.

● Proposition 10: The effects of premiums and added features on sales depend on theshare of buyers who perceive them as offering value, with premiums/features thatare perceived by many as offering little or no value potentially decreasing sales.

Purchase Quantity and Variety Seeking

Retailers seek product assortment that would appeal to the variety of tastes of theirtarget customers. However, in addition to interpersonal taste differences, individualconsumers seek variety in many categories (for reviews, see, e.g., Kahn 1995; McAlisterand Pessemier 1982). Naturally, the more variety that product assortment offers consum-ers, the greater their opportunity to choose different items within a product category. Butproduct assortment is not the only determinant of variety seeking behavior. Recentresearch indicates that purchase quantity, or the number of units purchased in a categoryon a particular shopping occasion, and the manner in which options are displayed on theshelf can have significant effects on variety seeking (Read and Loewenstein 1996;Simonson 1990; Simonson and Winer 1992). These effects, in turn, have importantimplications for the product variety that retailers need to offer.

Simonson (1990) proposed that consumers are more likely to select variety whenmaking multiple choices in a category simultaneously rather than sequentially. Thisproposition was investigated in a study in which participants were given a choice ofsnacks. One group of respondents were presented six snacks (e.g., Snickers bar, a bag ofchips) and asked to indicate which one they wished to receive. They chose one item andreceived it. The same procedure was repeated in each of the following two weeks, with therespondents receiving the snack they selected. A second group of respondents were shownthe same six snacks, informed that they would receive one snack immediately and one ineach of the following two weeks, and asked to indicate which item they wanted for eachweek. It was emphasized that there was sufficient supply of all snacks and participantscould choose the same snack more than once.

As was expected, respondents in the second group, who made snack choices for threeweeks at the same time, were much more likely to select three different snacks (64% ofthe participants) than those who made one choice each week for immediate consumption(9%). Simonson offered several possible explanations for these results, relating to the


differences in the way consumers treat simultaneous choices for future consumptioncompared with sequential choices for immediate consumption. Similar results and furtherinsights into the psychological mechanisms underlying these effects were provided byRead and Loewenstein (1996).

In a related study, Simonson and Winer (1992) showed that the number of itemsconsumers purchase in a product category on a shopping occasion can influence whatthey purchase. The data for this study consisted of scanner panel data of actual yogurtpurchases by households over a two-year period. Consistent with the earlier study, theresults indicated that, as the number of yogurt cartons purchased on a specificshopping occasion increased, consumers were more likely to choose yogurt flavorsthat they did not usually buy. In other words, consumers exhibited more flavor varietyseeking when purchasing more units on a shopping occasion (similar results wereobtained in the subsegment of single member households). This trend, however, didnot hold with respect to the variety of brands selected. In fact, as the number of yogurtcartons purchased on a shopping occasion increased, consumers were more likely tobuy their “regular” brand (i.e., exhibited less variety seeking for brands). Using alaboratory experiment, Simonson and Winer showed that this finding is driven, to alarge degree, by the manner in which yogurts are displayed at the store. Specifically,because yogurts are typically organized on the shelf by brand, the enhanced taskdifficulty associated with purchasing multiple units simultaneously encourages con-sumers to concentrate on their regular brands.

These findings can have important implications for retailers’ product assortments andthe use of bundling and promotions for encouraging consumers to buy higher quantitiesand select more variety within product categories. For example, by offering bundles thatconsist of a variety of items (e.g., a box with a variety of dried soups or spices), retailersmight better cater to consumers’ preferences for variety when making simultaneouschoices and thus encourage higher quantity purchases. Also, retailers may want toencourage consumers to diversify their purchases, such that they do not buy only one orvery few items. This could be achieved using a promotion whereby consumers mustpurchase multiple units to obtain a certain discount. Specifically, the above findingsindicate that promotions which require simultaneous purchases of several items within acategory, such promotions will likely increase the share of less popular items thatconsumers tend to avoid when buying just one unit on each shopping occasion.

● Proposition 11: Retailers can increase the quantity of purchase (in relevant catego-ries) by offering bundles of different preferred items. Relatedly, retailers canincrease the variety of options that buyers select using promotions and other meansthat encourage the purchase of multiple items in a category.

These studies illustrate some of the ways in which sales promotions interact withproduct assortment to affect purchase decisions. Such affects likely apply to the interac-tion between assortment and other components of the marketing mix.


Three Psychological Principles Underlying the Effects of Assortmenton Buyer Preferences

As shown in the previous sections, the effects of considered assortment on buyerpreferences can take many different forms. However, a closer examination reveals that allof these effects relate to three basic mechanisms by which product assortment impactspreferences: ease of purchase justification, ease of information processing, and activationof decision rules. These three principles are discussed next.

Product Assortment and Purchase Justification

Recent research suggests that purchase decisions, and decision making more generally,can often be better understood based on the assumption that people select the option thatis easiest to justify to oneself and to others, as opposed to the traditional assumption ofutility maximization (see Shafir, Simonson, and Tversky 1993, for a review). That is,because buyers are often uncertain about their preferences and about the utilities of theavailable options, they cannot assess the true utilities of the options and rely instead on theease of justifying choices.

Several of the effects reviewed above can be interpreted as reflecting the impact ofproduct assortment on the ability to justify making a purchase and selecting particularoptions. Consider the pen example in which the addition of an inferior pen enhanced thewillingness to give up $6 for a Cross pen. A straightforward interpretation of this effectis that the inferior option made the selection of the clearly superior Cross pen easier tojustify, which increased its share at the expense of the $6 option. Similarly, the preferencefor compromise options can be accounted for based on the principle that, when presentedwith an assortment of products, buyers make choices that are easy to justify and areassociated with a low likelihood of criticism and self-blame.

As another illustration, consider the effect of adding to a product assortment an optionthat is more expensive than all other options (e.g., adding a more expensive entree to amenu or a higher-price toaster to a catalog). Because selection of the most expensive itemfrom an assortment is often susceptible to criticism, the addition of an option with thehighest price makes it easier to justify choosing the next most expensive item. Relatedly,in a set of three or more options, buying the cheapest option may be difficult to justify,because “you get what you pay for,” and quality is typically the instrumental attribute thatrepresents the goal of the purchase. Consequently, the manner in which options aredisplayed, by brand or by model type, has a systematic effect on the choice shares of thecheapest brand and the cheapest model.

The finding of Tversky and Shafir (1992) described above is another example ofassortment effects on consumer preferences that reflect the impact of purchase justifica-tion. Buyers can easily justify buying a Sony CD player on “sale.” However, when facedwith two about equally attractive options, a Sony CD player on “sale” and an Aiwa CDplayer “on sale”, consumers have difficulty justifying preferring one option over the otherand tend to delay the purchase.


Finally, the effect of nonessential promotions and features is yet another case in whichdifficulty of justifying choice can determine whether and which choice is made from aproduct assortment. Choosing an item with unneeded features, such as a cake mix thatoffers the option to purchase an unneeded Doughboy Collector’s Plate or a calculator withunneeded functions, is susceptible to criticism and therefore tends to be avoided.

Ease of Information Processing

A great deal of research has supported the intuitive notion that the manner in whichinformation is presented has a significant effect on the manner in which it is processed(e.g., Bettman and Kakkar 1977). The effect of information presentation is due to at leasttwo related factors. First, consumers tend to minimize their information processing effortand are consequently sensitive to any factor, including information presentation format,that affects the ease of processing. And second, the information presentation format makescertain aspects more or less salient and, accordingly, more or less important in thedecision.

An example of this psychological mechanism is the effect of displaying optionsseparately versus side-by-side (e.g., Nowlis and Simonson 1997). When alternatives, suchas different toasters, are shown side-by-side, consumers tend to focus on those dimensionson which it is easier to make precise, unambiguous comparisons and rely less on lessquantifiable dimensions. In particular, a side-by-side presentation of alternatives increasesthe effective weight of price and feature differences, which are unambiguous and quan-tifiable, and diminishes the weight of qualitative aspects such as brand names. Presentingoptions separately, such as on an end-of-aisle display, has the opposite effect: brand namesthat can be evaluated on their own (e.g., Black and Decker) receive more weight, andprices (e.g., $39), which are less meaningful when evaluated in isolation, receive lessweight.

Ease of information processing underlies other influences of product assortment onpreferences, as illustrated by the evidence regarding the impact of missing attributeinformation on choice (e.g., Kivetz and Simonson 1999; Slovic and MacPhillamy 1974).When consumers have information for all considered options about some attributes (e.g.,a laptop’s processing speed) but not others (e.g., weight), it is easier to rely on thedimensions that allow direct comparisons. Consequently, such relatively easy to comparedimensions receive more weight. In the future, new selling media such as the Internet mayprovide new ways to influence the ease of processing information about product assort-ment and thus impact purchase decisions.

Activation of Prestored Decision Rules

When faced with an assortment of products from which one or more options might beselected, consumers might carefully process the available attribute information to deter-mine which, if any, options to choose. Such a decision making process, however, can beeffortful and time consuming and it often does not lead to clear conclusions. Alternatively,


consumers might apply a decision rule stored in memory, which simplifies the decision(e.g., Bettman 1979). In particular, based on their experience in making similar decisionsand experiencing their consequences, consumers can develop a repertoire of decisionsolutions that have proven themselves in problems with similar characteristics. Such rulesmight be activated by the product assortment which affects the consumer’s choiceproblem (e.g., the considered option set) and task (e.g., the manner in which the decisionsare made).

An illustration of a decision rule that is activated by the choice problem is consumerpreferences for complementary items. When choosing two items that “go together,” manyconsumers believe in going “all out” (a “climax”) on one occasion and saving money onanother occasion, as opposed to having two “mixed-level” experiences. For example, mostconsumers prefer having a tasty, expensive entre´e and a tasty, expensive dessert on thesame evening and less tasty, less expensive items on another evening, as opposed tohaving one expensive item and one inexpensive item on each occasion. Presumably, thisdecision rule is based on the consumer’s cumulative experience that the combination oftwo preferred and complementary enjoyment levels is super-additive, which more thancompensates for the companion all-negative (inexpensive) experience.

An illustration of a decision rule that is activated by the task is the finding thatconsumers, who simultaneously make choices for several consumption episodes, are morelikely to select a variety of options than consumers who choose one option at a time forimmediate consumption. Evidently, the mere act of making multiple choices, even whenthe selected options will be consumed at different times, elicits the rule that choosingvariety is superior to choosing the same item multiple times.

General Discussion

We are in the midst of a period characterized by profound changes in the marketingenvironment and methods. Retailers have new opportunities, including selling through theInternet, which also raise new challenges and competitive threats. Factors that tradition-ally were the major determinants of retailers’ performance, such as location, have lessimpact in the evolving environment. The present research has focused on the role ofproduct assortment, which is perhaps the most important element of retailing strategy.

While retailers will, undoubtedly, continue to use the breadth and depth of their productassortment as means for differentiation (see, e.g., Broniarczyk, Hoyer, and McAlister1998), the new environment makes it much easier to duplicate any successful offering andreach similar target users (but see Alba et al. 1997, for a discussion of role of offeringunique merchandise on the Internet). These changes, however, do not mean that productassortment will be unimportant in the future. In fact, recent research suggests that, inaddition to satisfying customers’ wants, assortment can play an important role in shapingthose wants. This article has examined some of the ways in which retailers can use productassortment to influence purchase decisions, focusing on three main areas.

First, because buyers typically evaluate only a subset of the available products, ratherthan the entire assortment, retailers can influence which sets of options are evaluated


together and design these sets to achieve their goals (e.g., encourage purchases of highmargin items). As described, prior research suggests specific methods for affectingwhether a purchase is made and which option is selected. Such tactics can be used in moststore environments, and they are particularly easy to implement on the Internet or incatalogs. For example, suppose that a retailer offers two pairs of binoculars at differentprice-quality levels, and assume that the more expensive pair is more profitable. Theresearch reviewed here suggests that the retailer can increase total sales and the share ofthe more expensive pair by including on the same page, screen, or shelf section yet anotherpair of binoculars that is significantly more expensive and offers somewhat higherperformance (even if very few select the added item).

Second, holding the considered assortment constant, retailers can influence purchasedecisions based on the manner in which they are displayed. For example, sales of ahigher-priced item that offers the retailer a higher margin can be increased by presentingthat item separately from other items in the same category. And third, the researchreviewed above indicates that the impact of assortment on preferences moderates and ismoderated by the other marketing mix variables (e.g., sales promotions), which need to becoordinated to achieve the sales goals.

Although these influences of product assortment on consumer preferences represent awide variety of factors, it is noteworthy that all of these effects are based on threepsychological principles (see Figure 1). One class of effects reflects the impact of productassortment on the ease with which certain choices can be justified. A second category ofeffects are related to the ease of information processing, whereby consumers tend to preferoptions with advantages that are more transparent given the manner in which theinformation is presented. And a third way in which product assortment influencespreferences is by activating specific decision rules that consumers store in memory, suchas the rule that variety is better than repetition.

A potentially disturbing aspect of the evidence that product assortment can be used toaffect purchase decisions is that it may transform the primary role of assortment fromsatisfying wants to manipulating wants, which might be considered unethical. Althoughmaking an absolute determination that a particular approach is ethical or unethical is oftendifficult, a relative judgment can be made. Specifically, if attempts to enhance sales bymanipulating the presented options and the manner of product display are unethical, thenmuch of what marketers routinely do is similarly unethical. For example, advertisers andretailers have been using a variety of tactics that are designed to enhance sales withoutoffering additional value to the customer (such as using a likable endorser or backgroundmusic). Thus, using product assortment in combination with other means to influencepurchase decisions can be seen as an extension of current practice.

It is also important to recognize that such influences on purchase decisions are mosteffective when consumers do not have clear preferences and are thus susceptible toinfluence. In addition, considering that choice set and presentation effects occur whetheror not they are planned by retailers, it may be practically impossible to determine whethersuch tactics are manipulative or naturally occurring phenomena. For example, if a salesperson shows a customer two refrigerators and suggests that one of the two is a better deal,does that constitute a manipulation?

Of course, the fact that assortment effects on buyer preferences are not inherently


different from other common marketing practices and are often naturally occurring doesnot mean that marketers can deceive buyers by providing incorrect or misleading infor-mation about their products. At the same time, retailers can choose which products to offerand how to present them based on an analysis of the effect of these decisions on buyerpreferences. Future research may further examine the boundaries of ethical assortmenteffects on preferences. Future research may also investigate ways to educate buyers aboutthe various influences on their preferences and how to avoid such effects. For example,buyers can be encourages to think globally about the range of products to which they havebeen exposed, as opposed to focusing narrowly on the choice set offered in a particularchannel.

Such educational programs will become even more important in the near future,because, as indicated, the advancement of new retail channels and technologies suggeststhat retailers will have more opportunities for influencing preferences. In particular, theInternet and the use of agents to identify options can make it much easier to influence

FIGURE 1

The Effects of Product Assorment on Buyer Preferences


buyer preferences based on the assortment shown and the method of presentation. Thus,product assortment will continue to be a key component of retail strategies in the new andexisting retail channels, though its role may evolve from simply satisfying wants to moreproactively influencing buyer preferences.

NOTES

1. It could be argued that tactics that are designed to make products appear more attractive,gain attention, or have a certain image are also illustrations of the effect of product assortment anddisplay on purchase decisions. In this research, the focus is on less obvious effects of the assortmentof options that consumers consider and the manner in which they are evaluated and compared.

2. This implication raises important ethical issues, which will be discussed later.3. A meta-analysis of prior studies indicates that the impact of adding an inferior option on

consumer preferences is particularly potent when the relatively superior alternative offers higherquality (rather than lower price) than the other existing option Heath and Chatterjee 1995).

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