Lecture 7

Question 1

Breadth

Answer 1

Number of (sub) categories
- Hypermarket

Question 2

Depth

Answer 2

Number of different SKUs within a (sub) category
- Category killer

Question 3

Disadvantages larger assortments for consumers

Answer 3

• Lower choice precision
• Lower satisfaction with the decision
• Lower satisfaction with the chosen product
• More regret
• More procrastination

Question 4

Attraction stage

Answer 4

Draw consumers to the store/website

Question 5

Conversion stage

Answer 5

Convince consumers to buy

Question 6

Need for online assortment optimization

Answer 6

• Choice overload
• There are variable cost per product such as those for content generation
• Space in the distribution centers is not infinite
• More sales dispersion increases inventory costs
• Higher sales concentration could improve margin conditions

Question 7

Reasons to display products in a store

Answer 7

1. Earn
2. Provide expertise
3. Overcome the limitations of the digital world
4. Inspire (to aspire)
5. Learn

Question 8

Process related

Answer 8

• Stimulation and shopping fun
• Positive anticipation of choosing
• Freedom of choosing
• Possibility of learning about the product category
• Drawing consumers to the website/shelf

Question 9

Choice related

Answer 9

• Increases the chance of finding the ideal product
• Increases the chance of finding multiple products in case of multiple buyers/users
• Possibility of variety seeking
• Flexibility in case of uncertain preferences