Dodge Dart sales - overpowered by the paradox of choice
After its highly publicized launch a year ago, the Fiat-designed Dodge Dart has been a sales flop. With all the fanfare highlighting of its Fiat roots, Chrysler was looking for the car to give it a foothold in the competitive, but highly desirable compact-car segment. But for all of 2012, Dart sales in the U.S. totaled only 25,303; a far cry from some of the optimistic estimates at its launch that it could top 100,000 sales in its first year. And compared to the leader of the pack--the Honda Civic with over 317,000 sales—the Dart has a steep mountain to climb if it wants to even be relevant in the compact-car segment.
The reasons for its dismal sales performance vary, but one that doesn’t get nearly enough attention is how Chrysler completely misunderstood the paradox of choice. We first highlighted it here last summer just prior to Chrysler’s big advertising campaign for the Dart:
This is the week that Chrysler is set to begin an all-out advertising blitz for its newly developed subcompact – the Dodge Dart. Hoping to complete against the likes of Toyota, Honda and Hyundai, they have positioned the car to appeal to younger drivers by including artists Jay-Z and Kanye West in their advertising. Chrysler is also making a big bet that consumers will flock to the car because of the number of features and choices that are offered; what the Wall Street Journal calls, “a menu offering as many as 100,000 possible combinations of colors and optional features."
Chrysler Group LLC’s newest compact car will be available in five different basic styles, 12 different exterior colors and up to 14 different interior color schemes, including black and ruby red, and “diesel gray and citrus.” Buyers will pick from up to seven different wheel choices and can get a dashboard they can personalize to show either digital performance data, or virtual analog gauges.
The array of choices is designed to appeal to drivers in their 20s and 30s, says Richard Cox, director of the Dodge brand. Chrysler, which has long been weak in compact cars, concluded that offering more customization and technology was a way to stand out.
The problem with choice (and specifically, too many choices) is that it can lead to something called decision paralysis – where as the choices available (even if they’re all good options) increase, so too does the likelihood that indecision follows. It’s a well-established psychological bias that limits our decision making process. In The Paradox of Choice, author Barry Schwartz highlighted one of the most obvious cases from a recent study.
Researchers at an upscale gourmet food store set up two tables where shoppers could taste different varieties of jam; one table had six different flavors while the other contained twenty-four. The table with twenty-four different types of jam attracted more people to taste (than the table of six) – makes sense so far, (more choices, more interest) right? But when it came to buying, thirty percent of the people exposed to the smaller choices of jam actually bought a jar – ten times as many compared to the people exposed to the table with more choices.
The conflict of all these choices—benefits that Chrysler felt would actually help the car stand out and increase sales—induces buyers to avoid decisions. Can’t decide between any of the 100,00 combinations? Then the easy way out is to walk out the door. And that’s what potential Dodge Dart customers did…they walked out of the showroom unsettled by the all the choices (probably headed across the street to the local Honda dealership) without making a purchase.