Consumer confusion is a state of mind that leads to consumers making imperfect purchasing decisions or lacking confidence in the correctness of their purchasing decisions.
Confusion occurs when a consumer fails to correctly understand or interpret products and services. This, in turn, leads to them making imperfect purchasing decisions. This concept is important to marketeers because consumer confusion may result in reduced sales, reduced satisfaction with products and difficulty communicating effectively with the consumer. It is a widely studied and broad subject which is a part of consumer behaviour and decision making.
Choice overload (sometimes called overchoice in the context of confusion) occurs when the set of purchasing options becomes overwhelmingly large for a consumer. A good example is wine in the UK where supermarkets may present over 1000 different products leaving the consumer with a difficult choice process. Whilst large assortments do have some positive aspects (principally novelty and stimulation and optimal solutions) any assortment greater than around 12-14 products leads to confusion and specifically transferring the ownership of quality assurance to the consumer. What this means in practice is reduced levels of satisfaction with purchases from large assortments as a consumer may be left with doubt that they have succeeded in finding the "best" product. Choice overload is growing with ever larger supermarkets and the internet being two of the main causes.
Similarity is where two or more products lack differentiating features which prevents the consumer easily distinguishing between them. Differentiating features could be any from the marketing mix or anything else associated with the product such as brand. Similarity of products has the negative effect on the consumer of increasing the cognitive effort required to make a decision. and reducing the perception of accuracy of decision. Both of these reduce the satisfaction with a decision and thereby satisfaction with the purchase.
A consumer may suffer from lack of information if the information doesn't exist, is unavailable to them at the required moment or is too complex for them to use in their decision making process.