Available via license: CC BY-NC-ND 3.0
Content may be subject to copyright.
Procedia Economics and Finance 11 ( 2014 ) 323 – 334
Available online at www.sciencedirect.com
2212-5671 © 2014 Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/3.0/).
Selection and/or peer-review under responsibility of Symbiosis Institute of Management Studies.
doi: 10.1016/S2212-5671(14)00200-7
ScienceDirect
Symbiosis Institute of Management Studies Annual Research Conference (SIMSARC13)
Application of Paralysis Analysis Syndrome in
Customer Decision Making
Rony Kurien
a
*, Dr. Anil Rao Paila
b,
Dr. Asha Nagendra
c
a
Research Scholar, COO, E-cole Hoteliere Lavasa, Pune
b
Dean & Director, Professor Welingkar Institute of Management Research, Bangalore Campus
c
Professor, Symbiosis Institute of Management Studies, Pune
Abstract
The term "analysis paralysis" or "paralysis of analysis" refers to over-analyzing (or over-thinking) a situation, or citing sources,
so that a decision or action is never finally taken, resulting in paralyzing the outcome. It is a general myth that when a consumer
is given more choices by the vendor the sales go up. This research paper attempts to apply this principal to consumer decision
making process during choosing a product. This paper presents the details of the study. It was found that consumers are known to
postpone their buying decision when they are spoilt for choices, while they have closed deals quicker when there have been lesser
options to choose from. It was concluded that when customers have more choices, they buy less; in decision-making people often
simplify using the wrong criteria; more choices lead to greater dissatisfaction because expectations are raised. This also provides
a product comparison or version comparison chart and helps to simplify the interface: prune unnecessary options or tuck them in
an optional "advanced options" section.
© 2013 The Authors. Published by Elsevier B.V.
Selection and/or peer-review under responsibility of Symbiosis Institute of Management Studies.
Keywords:
Paralysis analysis; Options; Choices
* Corresponding author.
E-mail address:ronyrong.kurien@ecolelavasa.com
© 2014 Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/3.0/).
Selection and/or peer-review under responsibility of Symbiosis Institute of Management Studies.
324 Rony Kurien et al. / Procedia Economics and Finance 11 ( 2014 ) 323 – 334
1. Introduction
The term "analysis paralysis" or "paralysis of analysis" refers to over-analyzing (or over-thinking) a situation, or
citing sources, so that a decision or action is never finally taken, resulting in paralyzing the outcome. A decision can
be treated as over-complicated, with too many detailed options, so that a choice is never made, rather than try
something and making a change if a major problem or deviation arises. A person might be seeking the optimal or
"perfect" solution, and for fear of making any decision which could lead to erroneous results, always keeps seeking
a better solution.
The phrase describes a situation where the opportunity cost of decision analysis exceeds the benefits that could be
gained by enacting some decision, or an informal or non-deterministic situation where the sheer quantity of analysis
overwhelms the decision-making process itself, thus preventing a decision
It is a general myth that when a consumer is given more choices by the vendor the sales go up. This research paper
attempts to apply this principal to consumer decision making process during choosing a product. This paper presents
the details of the study.
2. Methodology
2.1. Hypothesis:
Sales of the given product go up in case more choices are made available for that product
2.2. Samples and Sampling Techniques
An opinion survey was conducted by sending questionnaires to 500 people of which, 100 people responded to
the survey. Secondary data was collected from various sources and research papers to check this hypothesis. The
sample was chosen using stratified convenient random sampling method.
The respondents belonged to the following strata / categories
• Management professors who taught consumer behavior and marketing
• Marketing managers of various companies in FMCG sector
• Consumers working at Junior and Middle level managerial positions
Secondary data was collected from books, journals, research papers and websites
325
Rony Kurien et al. / Procedia Economics and Finance 11 ( 2014 ) 323 – 334
Table 1: Category wise choice of products for study
Product Category Pasta Mobile Phones
FMCG ( Low Value, Frequent)
9
Mid value ( infrequent)
9
As shown in the Table 1, pasta was chosen as one product which is in FMCG category and Mobile phone in the
infrequent, mid value purchase category of products
Table 2: Sampling Size and sampling methods
Products
Pasta
Mobile Phones
Sample Size for stores /
Vendors
2 Small Stores and 2
Departmental Stores in each of
the chosen city
2 Single Stores and 2 Multi Brand
Stores in each of the chosen city
Consumers
50 respondents 50 respondents
Sampling Method for
products and consumer
Sampling Method for choice of products under study and consumer and
experts
As shown in Table 2 small stores and 2 big department stores were chosen from Pune. Data was collected from
the stores and consumers. It was analyzed using statistical data analysis tools.
The data was quantitative and qualitative in nature. This data was analyzed, summarized and presented in this
report.
3. Data Representation and Analysis
3.1. Primary Data Analysis
Products identified for the study is Pasta in FMCG category and Mobile phone in infrequent purchase category.
The study attempts to look at the trends in unit sales of the two pasta brands in two small stores and five brands
of pasta in two departmental stores. The idea of choosing a small store and a departmental store is to observe if
there is a difference between the units of pasta brands sold across these stores because of wider choice available.
Similar logic applies in the choice of stores to study the unit sales of mobile phones. The data was collected from
both the vendors and the consumers. The study attempts to explore the link between increases in sales, due to
wider choice.
326 Rony Kurien et al. / Procedia Economics and Finance 11 ( 2014 ) 323 – 334
Vendors shared the records of the unit sales figures for the period of year 2001 to 2010. This information was
shared in strict confidence.
Figure 1: Trends in Pasta sales across small stores
Year
2001
Year
2002
Year
2003
Year
2004
Year
2005
Year
2006
Year
2007
Year
2008
Year
2009
Year
2010
Small Store 1
Small Store 1 Barilla
79
93
155
107
141
191
212
293
331
344
Small Store 1 Bambino
142 134 149 161 178 204 391 414 503 645
Small Store 2
Small Store 2 Barilla
81 94 158 111 142 189 200 291 333 347
Small Store 2 Bambino
141 135 151 164 179 205 394 417 506 647
0
100
200
300
400
500
600
700
Salesle Figures in Units
Trends in Pasta sales across small stores
327
Rony Kurien et al. / Procedia Economics and Finance 11 ( 2014 ) 323 – 334
Figure 2: Trends in Pasta sales across Departmental stores
The data shows that given a wider choice the sales of the given products increase. The comparative higher sales
of pasta in departmental store 2 since year 2005 as compared to that of the sales in departmental store 1, led to
further investigation to understand the reasons for this phenomena. The supervisor of the pasta section helps the
consumer manage his/her choices better by using the following techniques:
• Finding the requirements and taste preferences of the consumer
• Giving suggestions based on the above findings
• Helping the consumer compare the brands based on the price, nutrition value, taste and ingredients
Barilla
Bambin
o
Colavita
Sanrem
o
De
Cecco
Agnessi Barilla
Bambin
o
Colavita
Sanrem
o
De
Cecco
Agnessi
Dept. Store 1 Dept. Store 2
Year 2001
311 531 151 103 45 5 309 533 153 104 46 8
Year 2002
202 548 164 81 63 13 204 548 169 82 66 17
Year 2003
297 730 178 93 87 26 299 739 182 98 94 28
Year 2004
284 741 217 170 94 113 286 744 219 174 103 118
Year 2005
314 750 221 318 109 56 317 751 223 323 112 64
Year 2006
526 754 243 643 218 65 546 784 271 673 221 73
Year 2007
846 760 283 674 227 72 866 779 297 698 234 91
Year 2008
809 780 340 476 343 136 900 793 362 487 348 161
Year 2009
662 800 360 292 392 347 778 819 384 321 407 376
Year 2010
559 869 397 175 550 697 668 883 406 188 568 714
0
100
200
300
400
500
600
700
800
900
1000
Sales Figures in units
Trends in Sales at two Departmental Stores
328 Rony Kurien et al. / Procedia Economics and Finance 11 ( 2014 ) 323 – 334
This helps the consumer of pasta to manage his or her choices and prevents the consumer from getting
overwhelmed with the large amount of choices.
The study also examines if the same logic is applicable to mobile phones which is an infrequent purchase and
relatively a high price item.
Figure 3: Trends in Mobile sales in single and Multi brand Departmental stores
Sales of Nokia in Single brand store are lower as compared to its sales in other multi brand stores. All the single
and multi brand stores are located in the same vicinity. People visit the multi brand stores more because of
wider choice available and hence the sale of the brand under study, i.e. Nokia, increases.
Nok
Mot
SE
Nok
Mot
SE
Nok
Mot
SE
Nok
Mot
SE
Nok
Mot
SE
Nok
Mot
SE
Nok
Mot
SE
Nok
Sam
LG
Nok
Sam
LG
Nok
Sam
LG
Year 2000
Year 2001
Year 2002
Year 2003
Year 2004
Year 2005
Year 2006
Year 2007
Year 2008
Year 2009
SB Stores 1
291 734 761 354 124 705 429 146 114 571 221 149 989 302 228 218 105 604 389 132 115 490 226 122 503 221 197 1E+ 268 205
SB Stores 2
219
696
528
238
814
498
263
113
869
310
152
113
338
142
188
564
317
578
868
882
504
145
952
644
198
100
686
249
106
750
MB Stores 1
431
125
862
456
916
768
508
946
854
530
162
121
100
185
138
242
396
158
421
654
221
478
117
428
540
170
589
1E+
234
681
MB Stores 2
322 810 753 341 863 817 480 847 970 624 113 105 876 121 117 171 157 134 250 200 227 274 336 480 284 924 645 910 154 872
MB Stores 3
345 856 623 401 741 767 452 876 824 528 838 872 678 100 986 126 132 105 177 190 205 222 280 324 267 812 492 742 121 810
0
20000
40000
60000
80000
100000
120000
140000
160000
Sales Figures in units
Trends in sales of Mobile phones in single and multi
brand stores
329
Rony Kurien et al. / Procedia Economics and Finance 11 ( 2014 ) 323 – 334
It is also observed that the sales of Nokia in Multi brand store 1 are higher than the other Multi brand stores.
When investigated further it was found that the store helps the consumer to manage their choices and helps them
to choose from the wide range of choices, thus preventing the consumer from getting overwhelmed with the
choices.
To find the consumers perspective, an opinion survey was carried out to find out as to what prompts a consumer
to make a positive buying decision in case of pasta and mobile phones.
The analysis of data of this opinion survey is as follows:
Figure 4: Consumer Responses for a given range of choices: Pasta
Observations:
• In case of limited choices consumer tends to make a negative buying decision immediately. Thus the store
looses an opportunity to make a sale.
• In case of 3 to 6 choices, the consumer makes an impulsive positive buying decision because it is easy for
the consumer to choose quickly without much thinking. This results in an immediate sale in most of the
cases.
1 to 2 choices 3 to 6 choices 7 to 10 choices > 10 choices
Make a impulsive positive buying decision
immediately
5 454010
Make a Impulsive Negative buying decision
immediately
63 11 17 9
Make a informed positive buying decision
immediately
628606
Make a Informed Negative buying decision
immediately
371188
0
10
20
30
40
50
60
70
80
Frequency of consumer responses
Consumer Responses for a given range of choices :
Pasta
330 Rony Kurien et al. / Procedia Economics and Finance 11 ( 2014 ) 323 – 334
• In case of 7 to 10 choices the consumer prefers to make an informed positive decision and in most cases
would need some help in managing the choices. However if this can be managed properly the sales will be
much higher as compared to the second option of giving only 3 to 6 choices thus increasing the sales.
• In case of > 10 choices consumers would tend to postpone the buying decision.
Figure 5: Consumer Responses for given range of choices: Mobile Phones
• In case of limited choices consumer tends to make a negative buying decision immediately. Thus the store
looses an opportunity to make a sale.
• In case of 3 to 6 choices, the consumer makes an informed positive buying decision. This results in an
immediate sale in most of the cases.
Make a
impulsive
positive buying
decision
immediately
Make a
Impulsive
Negative buying
decision
immediately
Make a informed
positive buying
decision
immediately
Make a Informed
Negative buying
decision
immediately
Postponed the
decision
1 to 2 choices
3 10 0 95 54
3 to 6 choices
5
6
24
5
21
7 to 10 choices
674702
> 10 choices
10 2 29 0 23
0
10
20
30
40
50
60
70
80
90
100
Frequency of consumer responses
Consumer Responses for given range of choices : Mobile
Phones
331
Rony Kurien et al. / Procedia Economics and Finance 11 ( 2014 ) 323 – 334
• In case of 7 to 10 choices the consumer prefers to make an informed positive decision and in most cases
would need some help in managing the choices. However if this can be managed properly the sales will be
much higher as compared to the second option of giving only 3 to 6 choices thus increasing the sales.
• In case of > 10 choices 36 % of consumers would tend to postpone the buying decision. 45 % would make
a informed buying decision, 16 % would make a impulsive buying decision and 3 % would make a
negative buying decision. However this situation does not help the store to increase the sales.
3.2. Secondary Data Analysis
According to Saad, a well-known researcher in consumer behavior and Evolutionary psychology (EP), EP can
enrich consumer behavior research. He suggests that one of the main benefits of taking a Darwinian perspective to
consumer research would be to permit researchers to address scientific issues at both proximate and ultimate levels.
In contrast, EP views the mind as consisting of Darwinian modules that have each evolved to solve very specific
survival problems. Thus, the process that the mind uses to solve one adaptive problem is not necessarily the same
process that would be used to solve a different one. Unlike the ideas proposed by domain-general theorizing, the
processes that the mind uses to solve a specific problem are not necessarily transferrable to other domains.
Currently, most consumer researchers use domain-general theorizing, producing vast amounts of unconnected
findings, and would be greatly supplemented by the application of domain-specific theorizing. He also suggests that
a Darwinian perspective would permit consumer researchers to recognize the importance of both domain-general
and domain-specific mental modules and theorizing. According to Saad the mind is an accumulation of general-
purpose, domain-independent mental processes and algorithms, as demonstrated by behaviorism, various cognitive
approaches, and the “cost-benefit” framework.
Consumer products are built to lure people who may or may not need the product but want to have them (as status
symbol more so or less but not based on actual needs. A new phone, computer, car, watch, etc... every year may not
be necessary).
The limitless options we encounter make it difficult to finalize a choice. In a study led by Sheena Iyengar, a
management professor at Columbia University Business School, one group of people was presented with samples of
six different jams available for purchase while another group was presented with twenty four different jams. The
twenty four jam group showed much greater interest when sampling, but the six jam group was ten times more
likely to actually purchase a jam. Sheena's advise perhaps suits more to a specific product category which in this
case has been FMCG impulse goods. Exercising choice depends upon many factors other than the variety syndrome.
How much variety is appropriate would depend upon the psychographic profile of the target segment. It is correct to
say that a 'small' number of choices helps in taking an immediate decision. But how to arrive at that 'small' number
requires considerable researching into. Moreover it would be interesting to study how many choices would be a
good number in case a decision has to be made by a group versus an individual. When a company reduces number
332 Rony Kurien et al. / Procedia Economics and Finance 11 ( 2014 ) 323 – 334
of lines or products it carries, it allows the company to manage the logistics in a better manner hence a healthy top
line.
When considering low involvement fast moving consumer goods, her point can be seen that too many choices can
confuse the consumers. However, in infrequent, expensive, and high involvement purchases, the opinion survey
suggests that a wide range of options are important in order to match the customers' needs. The crucial task for the
seller is then to fully understand the demands and guide their client to the solutions which will fit them the most.
More choices lead to confusion and less sales is true more to a specific product category like FMCG impulse goods.
Exercising choice depend upon many factors other than the variety syndrome. How much variety is appropriate
would depend upon the psychographic profile of the target segment. It is correct to say that a 'small' number of
choices help in taking an immediate decision. But how to arrive at that 'small' number requires considerable
researching into. Moreover it would be interesting to study how many choices would be good number in case a
decision has to be made by a group versus an individual. When a company reduces number of lines or products it
carries it allows the company to manage the logistics in a better manner hence a healthy top line.
As per the research, consumer choice for a variety of goods has the following characteristics:
• It is good to limit variety in case of individual decision making situation for FMCG category of goods.
• Offer a larger variety of options & features if purchase decision has to be taken by a team in a case of B2B
category.
• Greater choice is directly proportional to the education & income level of the buyer.
• Generally it is more efficient to offer 7-10 choices for convenience goods
Thus it is fairly evident that only giving choices to a consumer do not help to increase the sales. The vendor also
needs to help the consumer manage the choices and narrow down on that single choice he wanted to make.
As a communicator, instructor or salesmen, one must learn to organize the available information (choices) in a way
that enables the recipient to progressively digest the ideas. It's almost like the concept of "low hanging fruit", if it is
too challenging to begin with, many will inherently dismiss the information and move on. From the decision-maker
perspective, a person who is be impulsive, has a tendency to get caught up in "analysis paralysis" or "contingency
thinking". When making quick, decisive decisions one tends to fare much better. Of course decisions with greater
long term impact require more contemplation; the fast and furious approach allows one to move quickly and
resiliently throughout the onslaught of his/her daily choices.
Economists talk about increasing product variety. The idea is that increased variety helps to increase the welfare of
the consumer by allowing them to find a product that more closely matches their needs. Effectively their real income
has increased. However, as is often lampooned, economists often treat people as perfect number crunches, where
333
Rony Kurien et al. / Procedia Economics and Finance 11 ( 2014 ) 323 – 334
increasing the number of choices would have no effect on people’s states of mind. Of course that is generally not
true. There is some tradeoff between getting the product that best matches your needs (by increasing variety) versus
the amount of effort it takes to choose as the number of possibilities increases. Given that, you can think of a
theoretical optimal number of varieties that balances the incremental benefits of an additional option versus its cost.
Designing the way the choices are presented to minimize the amount of effort it takes to make them is a great
example of innovation that increases consumer welfare. Generally, we think of increasing innovation associated
with the introduction new products, but it doesn’t have to be. It could be a better way to sort through the currently
available set of products.
So it is important to build a bridge between the ideas in economics that variety is good thing versus a common
perception that a consumerist society with many choices is exhausting.
Theodore in Jan 28 2012: Choice Blindness, "The study was led by Lars Hall, at Lund University. It was inspired by
a 2005 study, led by Petter Johansson, which showed male subjects, a pair of female faces. The subjects were asked
to choose the face that they found more attractive. Then, the mischievous scientists used a “card trick” to reverse the
outcome of the choice.
Here’s where the results get a little sad: Less than 30 percent of subjects noticed that their choice had been changed.
Our eyes might have preferences, but this doesn’t mean our mind can remember them."
Organizing the multitude of choices (even when it results in fewer choices) helps the decision-making process by
providing a framework for eliminating the uninteresting options.
The phenomena called 'The PARADOX of Choice'. It says that there are a "magic" number of choices that would
benefit us rather than harm us. But the fact is, it's impossible to calculate it, and even if you did, and enacted
policies, this would have to be a choice that everyone would have to make. In theory, if we did decide to decrease
our amount of choices, we would be giving up a freedom (even if it does lead to "imprisonment" or paralysis). And
it seems like any policy restricting our choices would be oppressive and I'm sure the average person would not be in
favor of it, even if our abundance of choice is leading to unhappiness. This is a paradox.
Thus the key is to help consumers manage choices and not overwhelm them with choices.
4. Conclusion
Consumers are known to postpone their buying decision when they are spoilt for choices; while they have closed
deals quicker when there have been lesser options to choose from.
Other inferences drawn are as follows:
• When Customers Have More Choices, They Buy Less
334 Rony Kurien et al. / Procedia Economics and Finance 11 ( 2014 ) 323 – 334
• In Decision-Making, People Often Simplify using the Wrong Criteria
• More Choices Lead to Greater Dissatisfaction Because Expectations are Raised
• Reduce the Number of Choices and Decisions that End-Users Have to Make
• Provide a Product Comparison or Version Comparison Chart
• Select Useful Defaults that Apply to Most People
• Simplify the Interface: Prune Unnecessary Options or Tuck Them in an Optional "Advanced Options"
Section
•
• Avoid the Paralysis of Choice by Providing a Simplifying Criterion
• Different Target Audiences Have Different Levels of Expectations and Competence in Handling Variety
Thus when confronted with too many choices, people are often crippled by the large number of variables they have
to juggle to make a decision. Using some of the tips given in this article, one can improve customer satisfaction and
perhaps even increase sales by avoiding this paralysis of choice.
References
Taylor Lindstrom(2000), Last accessed (W ednesday, March 27, 2013) internethttp://theintrovertentrepreneur.com/2011/07/26/how-
to-kick-your-paralysis-by-analysis-addiction/
Quzlet(2009), Last accessed (Wednesday, March 27, 2013) internethttp://quizlet.com/dictionary/consumer-choice/
Roderick W, Admap issue 489 (Dec 2007) ‘decisions decisions’ (library and learning resources, e-
library,Warc.com)http://www.warc.com/ArticleCenter/Default.asp?CType=A&AID=INDEXSEARCH87580&Tab=A
Consumer Behaviour, international edition, 8th Ed, (1995) James F. Engel, Rodger D. Blackwell, Paul W. Miniard, The Dryden Press
Consumer Behaviour, A European Perspective, 4th Ed, (2010) Michael R. Solomon, Gary Bamossy, Soren Askeggard, Margaret K.Hogg, FT,
Prentice Hall: Harlow, England
Marketing Research, An applied Approach, 2nd Ed, (2003) Naresh K. Malhotra & David F. Birks, FT, Prentice Hall: Harlow, England
Basic Marketing Research, A Decision-Making Approach, 2nd Ed, (2006) Naresh K. Malhotra & Mark Peterson Pearson, Prentice Hall
Consumer Behaviour and Marketing Strategy, 8th Ed, (2008) J. Paul, Peter and Jerry C. Olson McGraw Hill: Boston.