Category-Based Screening in Choice of Complementary Products

Abstract

Consumers often make complex choices involving complementary categories, such as cell phones and service plans. In the fast-growing high-tech and entertainment industries, products from complementary categories are often incompatible with one another. This research shows that when choosing a pair of such complementary products, a consumer is likely to use a two-stage decision strategy: screening by one category first to narrow down the number of pairs for further evaluation in the second stage. In the presence of incompatibility, screening by one category rather than by the other may lead to different choice outcomes. The authors develop a behavioral theory–driven choice model that accounts for both preference heterogeneity and structural heterogeneity of decision strategies to examine the extent to which consumers engage in category-based screening. Analysis of data from a 2 × 2 conjoint choice experiment reveals that consumers tend to screen a category that has higher intracategory differentiation and is congruent with their decision goals. The authors further suggest possible marketing actions a firm can take to promote the use of a specific decision strategy that leads consumers to choose its product.