The negative sum game of too much choice

At Asymmetrical Information, Mindles H. Dreck writes about the problem of too many consumer choices.

Well, he doesn’t see it as a problem, but I say that the story from this NY Times op-ed piece by Stach Schiff, about the consumer so overwhelmed by choices in the toothpaste aisle that he wound up not buying any toothpaste, is yet another example of how marketing is a negative sum game.

If there was only one company selling toothpaste, then it might make sense for that company to sell six different types of toothpaste. But when there are six toothpaste companies, and each has six different types of toothpaste, then the consumer is faced with the unpleasant task of having to pick from 36 possible choices.

If one toothpaste company decided to go with only one type of toothpaste, it would surely suffer a loss of shelf space and a corresponding loss of sales. So every toothpaste company is forced to compete in the marketing game, to the overall detriment of the consumer who is faced with too many choices and higher prices for toothpaste. (Prices are higher because marketing costs are passed on to the consumer.)

Comments

[Michael H.]

Hi Half Sigma
How can we have too many choices?
This is ridiculous. If I see 1000 brands of toothpaste, I will first look for big brands. Then I will choose one that looks white. Then I buy it. Simple.

Why would one waste a lot of time diliberating over which toothpaste to buy. There's not that much difference between the major brands. It doesn't cost enough to warrant really intensive market research.

If you go to a restaurant, would you rather have a menu of 4 items or 40 items? If you prefer only 4 items, then just look at the first 4 non-appetizer items listed in the menu with 40 items. You might think, "Well maybe something is better in the rest of the menu." Well, maybe the restaurant with 4 items could make some better items too, but they aren't providing you with the choice.

Actually, if the waiter is good and you are a first time customer, he (she) will be able to recommend some popular items.

I don't buy into the idea that more choice is a problem. The problem is not having a strategy to deal with many choices.

["Mindles H. Dreck"]

That would be 'he', not 'she'. Thanks for the comment.

I don't think you've proved your point that choice is a negative.

For the life of me I can't fathom someone who feels that their time is so worthless that they have to evaluate every type of toothpaste. Brand loyalty, professional/media advice, whatever's on sale, these are all available shortcuts that can help.

[Half Sigma]

When faced with too many choices I usually choose the least expensive choice on the theory that if I can't figure out why the more expensive choices are worth more, then they're probably not worth more.

[Scott S]

In the Soviet Union you had a choice of which food line to spend the day in, but the number of lines were not overwhelming. Another bonus for socialism/communism.