Wednesday, December 26, 2007

Retail Strategies

Writing in The New Yorker, James Surowiecki explores the challenges and tricks of retailing. An excerpt:

Even the sheer profusion of products available represents a strategic choice. In an experiment in the early nineteen-nineties, people were first asked whether they preferred a $110 microwave oven made by Emerson or a $180 oven made by Panasonic. Only forty-three per cent chose the Panasonic. But when a higher-priced Panasonic model, costing $200, was introduced into the mix, people’s choices changed in a curious way: suddenly, sixty per cent wanted the $180 oven. Just adding a more expensive model made the medium-priced version look more attractive and boosted Panasonic’s total sales. Change what surrounds a product, in other words, and you can change what people think of it.

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