How Big Internationally Acting Companies Influence Over Choice
Going to the supermarket and standing in front of the ten meter long, completely full shelf deciding what kind of Italian pasta to buy for dinner is a perfect example of over choice. Over choice is the situation when there are too many products of the same kind available on the market. This leads to confusion and the consumer has trouble to decide which product to buy. The problem that occurs with over choice is that it is not only time-consuming but also that it does not satisfy the consumer. The consumer tends to regret his or her choice because there are too many other options (that he or she did not choose) of which he or she does not know whether they would have been better or not.
The ingredients Italian pasta contains - flour, salt, olive oil and water - are very simple. Nevertheless there is a large number of different shapes. Spaghetti, Linguine, Penne, Macaroni and Tortellini are just a few of the estimated 310 known forms. Additionally every single shape is produced by different companies and sold for different prices.
Since Pasta is a very basic aliment, the only difference between more expensive, well known brands and an off brand product is often the way it is packaged and the price. For example one pack of Barilla Spaghetti costs 1,50€, in comparison Edeka’s house brand Gut & Günstig's pack is only 0,45€.
The only difference that can be found between pastas is the kind of flour they contain, the most common ones are regular flour, whole grain or spelt. There is a big market for people who have allergies, for example those who are intolerant to gluten. Gluten-free products are sold to a much higher price and marketed as especially good and healthy.
Most of the time a company does not only produce one product but products that need or can be used together, for example toothpaste and toothbrush, coffee and coffee filters, shoes and shoelaces or to stick with the Pasta example: Pasta and pre-cooked sauces or pesto. This segment takes it even further, there are various pre-cooked "just stick it in the microwave" dishes with a large variety of flavours and ingredients such as meat, fish or vegetables. Furthermore they offer allergy friendly or vegan editions.
The tough competition between many companies offering the same product is to have the biggest sale numbers and the highest profits. Supposably new products are being released nearly every second week. Companies use marketing to convince the consumer to try the new product but it is also used to higher the prices without people noticing.
Even the world's largest multinational food and beverage company Nestle produces inexpensive pasta, sauces and pesto in one of their sub companies (Buitoni).
Nestle is a good example for a company which tries to have one or more products in every area. Regardless of financial loss or tradition Nestle introduces a new brand to a sector which already has plenty of different products and options or they simply buy existing companies. This attitude results in over choice; enough companies sell the same products already, but Nestle sees an opportunity to make money. The water market can be used as an example for Nestle's actions on an already served market.
On the German water market are already many beverage suppliers. Every supermarket or store specialized on beverages sells mineral water, from regional or national springs but also water from other countries. Nestle earns 22 percent of their total sales in the beverage sector. They need water, not only for selling it but also for producing soft drinks and their other products in their sub companies, for example the pasta Buitoni. Over the past few years Nestle was often criticised for their handling with water. The water shortage is already a big international problem and Nestle supports the waste and the fighting for water. There are two big issues in how they pump the water: They either take the ground water from small unexploited areas practically for free and sell it for a lot more. The second critical point is that they pump water from rural areas, which already suffer from low water resources, to an extend that people living in those areas are forced to buy bottled Nestle water which they cannot afford. Nestle does not care about poor people's needs and sets the prices to address the upper class. This leads to water conflicts in those areas. Instead of letting regional companies sell the water for appropriate prices Nestle tries to make the highest profit by selling it in more developed countries such as the United States or European countries.
Considering this example it becomes obvious that on the one hand some countries like Germany have a too big variety but other less developed countries like Somalia do not have enough to survive. Even within the European Union some examples for less developed countries with a very low standard of living can be found. It is a paradox between overchoice on one side and bad working conditions and wages, living on the edge of existence on the other. Here in Germany in some cases, you can go to the supermarket 24 hours a day and choose from a too big variety of different kinds of pasta or mineral waters while in other countries there is a deficit of essential aliments.