Jack of All Trades or Master of One? Product Differentiation and Compensatory Reasoning in Consumer Choice

Abstract

This research examines consumer reactions to two common positioning strategies: a specialized-positioning strategy in which an option is described by a single feature, and an all-in-one strategy in which an option is described by a combination of features. The empirical data reported in this article demonstrate that a product specializing on a single attribute is perceived to be superior on that attribute relative to an all-in-one option, even when this attribute is exactly the same for both options. It is further shown that the observed devaluation of the all-in-one option can be mitigated by introducing another attribute on which the all-in-one option is inferior to the specialized option.