Consumer Choices Are Exploding

WHY IS THIS IMPORTANT? The New Economy is no longer a mass production economy where, as Henry Ford is reported to have said, "You can have a Model T in any color as long as it's black." The rise of production processes based on information technology has allowed companies to develop "flexible" factories and offices in which costs rise little when variety expands. More flexible and agile companies are better able to efficiently target new and diverse markets. Moreover, fiercer business competition has meant that companies are constantly developing new products and services in order to gain new markets. Consumers benefit because their needs are more specifically addressed.

THE TREND: One indicator of expanding consumer choice is the number of trademarks filed by companies. Between 1984 and 1989, the number of trademarks filed grew steadily. However, since 1989, filings have taken off, increasing from about 80,000 per year to 180,000 per year in 1995. Other indicators also suggest growing consumer choice. The average number of products in grocery stores has increased from under 13,000 in 1980 to 30,000 in 1998. Similarly, the average number of magazines published has increased from 2,500 in 1987 to 4,400 in 1997. Overall, an estimated 50,000 new products are announced every year in America, up from only a few thousand annually in 1970.²⁰ In a broad range of product and service categorizes, Americans are offered an expanding array of choices. In fact, the brand that has the largest market share in many consumer markets today is "other."²¹

THE DATA:

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Productivity Paradox | Knowledge Economy
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