Sheena Iyengar: Most Customers Don't Know What

Sheena Iyengar, Professor of Business, Columbia Business School Education

SHEENA IYENGAR
Age: 40
Title: Professor of Business, Columbia Business School Education: Ph.D. in Social Psychology, Stanford University; B.A. in Psychology, University of Pennsylvania; B.S. in Economics, Wharton School of Business
Book: The Art of Choosing, Little, Brown
Interests: Travelling, cooking, jazz, chocolate shopping in New York

How does culture and context affect consumer choice in India?
What’s interesting about the choosing experience of Indians from, say Americans, is they’ve built into their culture more norms and rules about how to choose and what to choose. For example, say you want to go buy clothes. In the US, when you try to figure out what you’re going to wear, you have to know what piece of clothing is the best expression of who you are and what you want. In India, that’s somewhat mitigated and measured by having to take into consideration what is appropriate and what is inappropriate.

How challenging is it to navigate the rules?
If an American, European or Japanese marketer goes into India, they need Indians on the ground to help them. It’s one thing to understand Indian culture as a whole; you can get some sense of it by watching Hindi movies. It will tell you what are some of the questions you might ask but it won’t tell you all that you want.

In your book, you said P&G’s sales of its Head & Shoulders shampoo rose 10 percent after it reduced the varieties from 26 to 15. Is less actually more?
I think in many cases it is. Most of us don’t know what we want. You’re expecting people to use their choices to figure out what they want. In order for them to do that, they need to understand how their options differ. That becomes very difficult when you have a lot of options. Unless people have real expertise about what they want, they cannot handle more than seven plus or minus two choices. Removing redundant or trivially different options can help reduce production costs and increase sales. Say you’re introducing chewing gum or soda; if you give people 50 [options], they’re going to be overwhelmed and not know what to choose. You’re better off starting them with five or six, so they can feel like they made a choice; you want to empower them. If you just give them one, they’ll feel like accha wahi tha [that’s all there was].

So consumers are manipulated into believing they have choice?
We have to acknowledge that marketers manipulate us, and we’d make ourselves crazy if we try to avoid being manipulated on everything. So we might as well make sure we understand what our priorities are. And on those priorities, we make it a point not to be manipulated and make more conscious choices.

Should consumers be wary of companies that sell the same product at different prices?
To the extent that they care about being manipulated on price, then yes. But there’s a difference between, say Maybelline and Estee Lauder, which is that Estee Lauder communicates a certain image of your wealth, status, etc. If that’s part of your identity, you’ll probably pick Estee Lauder as opposed to Maybelline.

How should Indian policymakers approach choice?
There should be more of a focus on choice. [For example, the Indian government] has to create choices in rural areas by creating more infrastructure so that companies will want to move to rural parts. It doesn’t have to be the fate of a rural person to be poor or to commit suicide when the crop goes bad. It’s useful for Indians as individuals and as a society to think about the role choice can play in their lives.