Variety effect
DESCRIPTION
Any effect where the existence and availability of product or brand variety results in an increased benefit to consumers.
KEY INSIGHTS
Consumers of a particular product or brand may benefit from another firm’s new product or brand introduction when such an introduction provides the consumer with consumption variety. Given the availability of variety, a consumer may periodically choose the new alternative to experience diversity in consumption where, previously, all consumption experiences were the same. At the same time, the availability of variety may also act to enhance consumer perceptions of current products or brands as well as potentially give consumers greater satisfaction with the overall set of products or brands for which there is increased variety.
KEYWORDS Product variety, brand variety, consumer benefit
IMPLICATIONS
Marketers should strive to understand through research how and to what extent expanded product or brand variety, whether offered by competitors or within a firm, may lead to an increase in particular consumer benefits. For example, increased variety may lead to expanded consumption from a product category while in other instances the effect may be greater consumer satisfaction with one or more of the alternatives within a particular category.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Hausman, J. A., and Leonard, G. K. (2002). ‘The Competitive Effects of a New Product Introduction: A Case Study,’ Journal of Industrial Economics, 50(3), 237–264.
Chernev, A. (2003). ‘When More Is Less and Less Is More: The Role of Ideal Point Availability and Assortment in Consumer Choice,’ Journal of Consumer Research, 30(2), 170–183.
Brynjolfsson, E., Hu, Y., and Smith, M. D. (2003). ‘Consumer Surplus in the Digital Economy: Estimating the Value of Increased Product Variety at Online Booksellers,’ Management Science, 49(11), 1580–1596.
BIBLIOGRAPHY
Dhar, T., and Foltz, J. D. (2005). ‘Milk by Any Other Name. . . Consumer Benefits from Labeled Milk,’ American Journal of Agricultural Economics, 87(1), 214–228.
variety-seeking buying behavior see consumer buyer behavior
Veblen effect see goods
Veblen goods see goods
vertical integration see product-market investment strategies; integration
vertical marketing system see channel arrangement