Consumer preference is determined by how their options are presented.
Conventional wisdom holds that consumers faced with a large product assortment, like PCs with varying processor speeds, would rather choose a product that is middling than one at the extremes. But John Gourville, professor of marketing at Harvard Business School, and Dilip Soman, Corus Chair in Communication Strategy and professor of marketing at the University of Toronto’s Joseph L. Rotman School of Management, believe that tendency can get flipped around under certain circumstances as the number of options rises.
Gourville and Soman conducted three studies on different sets of shoppers to test whether avoiding extremes depends on the menu of choices. In the 2007 working paper “Extremeness Seeking: When and Why Consumers Prefer the Extremes,” they describe how the alignment of options is a key factor. Aligned options vary on two or more continuous dimensions, such as price and processor speed. So, as Gourville says, “In a sense, you are buying none, a little, more, or a lot of a feature.”
With more aligned options, consumers tend to choose a middling option. Providing more options makes deciding more difficult, so consumers cut through their indecision by eliminating the cheapest and most expensive options. Sommeliers, for example, know that the least and most expensive vintages on their wine lists are far from the best sellers. Apart from the occasional oenophile, most diners don’t want to take the risk that the cheapest wine could be vinegar or that they won’t appreciate the delicate nose of the priciest reserve, so they pick an option from the middle of the list.
On the other hand, as Gourville and Soman show, sometimes choices are not so neatly aligned, and consumers face tradeoffs when they make their decision. For example, a car dealer might offer a sporty SUV with four-wheel drive, or a luxury SUV with leather seats and a sunroof (but no four-wheel drive). When those non-aligned choices multiply and the tradeoffs become complicated, consumers tend toward a stripped-down or a fully loaded model instead.
Why do consumers like extremes when options are nonaligned? Ironically, it’s for the same reason they prefer compromises when the options are aligned: Deciding is hard. “What’s happening,” explains Gourville, “is that people can’t decide, so they are, in a sense, simplifying their choice. They’re throwing up their hands and just saying, ‘Give me the basic version or give me everything.&