| Abstract: | In recent years, many companies have considerably increased their number of offering varieties. The underlying rationale for such product strategies is substantiated by the belief that assortment proliferation would better satisfy customers' diverse preferences. However, empirical evidence exists suggesting that if there are too many varieties to choose from, customers sometimes either refrain from making a purchase at all, or else resort to simple selection heuristics. This article approaches the issue of assortment variety from a decision‐theoretical perspective, by positing circumstances under which expanding the number of varieties will positively or negatively affect consumer behavior. Herein, the concept of attribute alignability provides explanatory potential. Two experimental studies are presented which analyze the effect of the number of product varieties on customers' decision‐making behavior by means of manipulating the choice settings in a virtual car configurator. It can be shown that whether the product attributes in question are alignable or nonalignable is the decisive factor in explaining customer decision making under variety. Furthermore, “pseudo‐alignability”is achieved easily via the relabeling of product options. These findings yield concrete managerial insights for the customer‐oriented design of product lines consisting of a basic product and several varieties derived from it. ©2009 Wiley Periodicals, Inc. |
