The importance of Variety

<><> <><> <><>

Abraham Maslow

Why is variety so important?

As we have seen with the Henry ford story (1^st post), once a new technology becomes affordable, consumer preferences change towards almost insatiable appetite for variety. The reasons for that are beyond this blog (or my knowledge), however I will point out two important points:

1. The innate need of people to place themselves in the social ladder, as I think was properly described by Thorstein Veblen in his classic “The Theory of the Leisure Class” (1899). People require conspicuous consumption to achieve that.
   In simpler words, if the entire neighborhood has black “Model T” cars, there will be unique value for my new red car. As marketing people know, there is a need to satisfy smaller and smaller niches in order to capture and sustain market-share and profit.

2. In basic economics we learn that there is a demand curve, where people will buy less when price rises. First an ideal price is set, where profit is maximized; but retailers cannot disregard customers who cannot afford the ideal price, so they use tools like seasonal sales, product versioning etc., to address different market segments. The better the fit to the real market out there, the better the economic results. This very well may be the source for today's diminishing folding cartons batche sizes, reported throughout the industry.
   This may contradict the efficiency inherent to large, uniform production batches, as done by Henry Ford.

The inherent contradiction from section 2 above, between market efficiency, which dictates variety of product, and manufacturing efficiency, dictating uniformity, has its most effective solution in the conversion to Digital.