Abstract
Investigating the effects of brand and flavor variety on perceived variety (PV), we show, through two experiments, that because a brand is a perceptual attribute, sheer brand variety does not lead to PV; the brands need to be highly differentiated in the consumer's mind to create PV. Further, even highly differentiated brands create PV to a greater extent for promotion than for prevention-focused consumers, because a brand is a composite of several associations, and promotion-focused consumers use more criteria to group objects, are more holistic processors and can rely on less justifiable information. In contrast, flavor variety influences PV irrespective of the above conditions. Brand and store managers can use this research to influence brand and store choice and consumption quantity by determining which attribute to offer variety in to maximize PV in store shelves. Further, this research shows that firms should offer variety through line extensions, not brand variety, to maximize PV.
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