I Need My Spicy Nutty Latte Grande  Once hubs for consumers seeking a little indulgence on a busy day, many specialty coffee shops are now searching for ways to keep customers coming back. Does this mean the days of the Half-Caff Iced Mocha Latte Grande with Whipped Crème and Sprinkles are behind us? In other words, should marketers simplify customer choices in confusing economic times? Well, at least one recent study says: Don't you dare.
These researchers invited a range of consumers (17 to 66 years old) to sample "new" coffees at a food court. The menus listed 50 coffee names drawn from coffees offered at major chains and a local shop. But subjects received different versions: the coffee options were either uncategorized (just the name of the coffee), or divided into 10 categories. The most informative category labels specified attributes of the coffee flavors, such as "Complex," "Spicy," "Nutty," "Mild" or "Earthy."
The catch? All of the subjects were actually served the exact same coffee, regardless of the extensive categories describing their choice.
The result? Hold on to your Latte: Customers who received the most complicated options (the name of the coffee, divided into 10 categories) were most impressed with the "new" flavor. Researchers concluded that "the number of categories partitioning an assortment leads consumers to feel more satisfied with their chosen option." This worked even when the categories were not informative at all.
The Po!nt: Customers need choices. If you're reducing your product line, you may want to increase the sub-categories describing each product to keep a sense of choice alive.
Source: "The Mere Categorization Effect: How the Presence of Categories Increases Choosers' Perceptions of Assortment Variety and Outcome Satisfaction" by Cassie Mogilner, Tamar Rudnick and Sheena S. Iyengar. Journal of Consumer Research, 2008.
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