The Paradox of Choice
We are constantly flooded with messages and advertisements as the world has become a lot more connected place. This has enabled us to better view our options when it comes time to make a purchasing decision. However, the pitfall arises when a business gives its consumers too many options to choose from. The more choices you offer consumers, the harder it becomes for them to buy your product. Furthermore, having too many products creates an unnecessary clutter of items that are not even needed. Instead, businesses should focus on a limited number of products to create what the market needs.
This pitfall is described in the Kerin literature. It’s known as the “Multiple Products and Multiple Market Segments” strategy. This strategy entails the development of multiple products for different market segments. Although it may appear to be a brilliant idea to offer a diverse range of products, it has significant drawbacks. You risk your product not even selling enough because others have overshadowed it by creating too many products. According to the Kerin literature, creating multiple products may result in products stealing from one another, resulting in unnecessary production expenditures.
Furthermore, the Kerin text states that an increase in products increases price and reduces quality. If you have too many products, you may not have time to improve or add to them. When Ford provided a range of Brand Names, they ran across this issue. As a result, they chose to sell off most of their brand names, keeping just Lincoln and Ford. As indicated in the Kerin text, multiple products result in a restricted manufacturing volume, which raises the price. Even though you are catering to different customers’ tastes, which may seem like a good thing, this hurts your profits because of the reasons listed above.
Keeping one product and return sales makes sense instead of manufacturing another product that will not increase sales but steal from another product. As a result, you are saving your company money on manufacturing costs.
Instead, businesses should follow Apple’s lead. According to the Kerin literature, Apple employs the “build-to-order” technique (BTO). BTO essentially means that my business will limit its product offerings, manufacture on-demand, and reduce delivery times. They do this by producing a limited number of goods for each computer line. This reduces the number of options available to buyers and eliminates the likelihood of products competing for sales. This is a better strategy to utilize since the items now have greater value because they are in distinct categories, and the production costs have decreased. As a result, Apple will have more time to improve its products and generate a better customer experience.
