9 2. CHAPTER 2 LITERATURE REVIEW 2.1. Literature Review The purpose of this subchapter is to review the essential background of research related to the consumer confusion phenomenon, focusing on the variables investigated in this study. This subchapter addresses the scholarly as well as existing literature relating to this topic and provides an overview of the current study. Consumer Confusion Consumer confusion has become a pervasive issue in contemporary markets due to the proliferation of products and marketing strategies. Marketers across various sectors employ tactics that contribute to confusion, making it a pressing concern (Drummond, 2004). In today's environment, characterized by relentless product innovation, imitation strategies, and abundant marketplace information, consumers face overwhelming choices, leading to confusion (Persaud and Azhar, 2012; Schweizer et al., 2006). The literature on consumer confusion has been studied for quite some time. One of the earliest research was done by Friedman (1966), whose study examined the factors contributing to consumer confusion in the context of supermarket product selection. This early work laid the foundation for understanding the causes and implications of consumer confusion. Later, the concept was further studied by Mitchell and Papavassiliou (1999) and Turnbull et al. (2000), where he defined consumer confusion as “consumer failure to develop a correct interpretation of various facets of a product/service, during the information processing procedure.” Later, the concept of consumer confusion was further studied more comprehensively by Walsh et. al. (2007), who developed a scale to measure consumer confusion proneness. 10 These studies collectively highlight that the more alternatives and features available, the more challenging the choice becomes. Confused consumers often delay decision- making to analyze information, reducing options and feeling uncertain about their choices even after purchase (Fasolo et al., 2007; Iyengar and Lepper, 2000; Mitchell et al., 2005). Previous research on consumer confusion primarily focuses on the three informational sources of confusion: similarity, overload, and ambiguity confusion, all which are critical dimensions of this phenomenon (Mitchell & Papavassiliou, 1999; Turnbull et al., 2000; Walsh et al., 2007). While "consumer confusion" is a broad term encompassing various types of confusion, for the purposes of this study, the term "information confusion" will be used to describe the same concept. Thus, although many studies refer to "consumer confusion" broadly, this research will use "information confusion" to specifically describe the phenomena under investigation, particularly as it relates to the effects of overload, similarity, and ambiguity on consumers' decision-making processes. Overload Confusion The concept of overload confusion begins as a consequence of information overload, wherein the abundance of online information and its easy accessibility contribute to the issue, leading to significant effects on consumer decision-making and the quality of choices (Mitchell et al., 2005; Moon et al., 2017). Overload confusion is defined as “consumers’ difficulty when confronted with more product information and alternatives than they can process in order to get to know, to compare and to comprehend alternatives” (Walsh et al., 2007), leading to a lack of understanding and confusion in the decision-making process. When faced with such overload-induced confusion, consumers may resort to decision heuristics to simplify their choices (Kahneman et al., 2011). However, this confusion can also lead to frustration, cognitive dissonance, and even decision paralysis among buyers (Mitchell and Papavassiliou, 1999). Moreover, it has been linked to negative word-of-mouth (Turnbull et al., 2000), reduced brand loyalty (Walsh and Mitchell, 2007), and can impact marketplace trust and customer satisfaction (Walsh and Mitchell, 2010). Other studies also mentioned the surplus of information leads to 11 confusion and delays in decision-making, and at times, even postponement of purchasing actions, as noted by Mitchell and Papavassiliou (1999), Schweizer et al., (2006), and Walsh and Mitchell (2010). Additionally, Sarabhai and Singh (2014) illustrate the impact of overload confusion on consumer confusion in the realm of cosmetics and personal care products. They highlight the extensive range of sub-categories within the product category, each addressing specific benefits such as fairness, skin whitening, anti-acne, deep- cleansing, anti-aging, herbal, and gentle care. Faced with many options, consumers often grapple with confusion, resorting to narrowing down choices to a specific product sub-category based on desired benefits or suitability, and then selecting any brand within that sub-category without a distinct preference for a particular one. Similarity Confusion The concept of similarity confusion, which precedes information confusion, occurs when consumers perceive different products within the same category to be visually and functionally similar due to imitated information in the marketplace (Walsh et al., 2007). It is defined as “a lack of understanding and potential alteration of a consumer’s choice or an incorrect brand evaluation caused by the perceived physical similarity of products or services” (Mitchell et al., 2005). Numerous companies frantically compete by creating minor differentiations or imitating market pioneers’ products or brands. Imitator brands often imitate market leader brands along marketing mix elements such as origin or source, color, shape, packaging and design (Kapferer, 1995; Foxman et al., 1990; Falkowski et al., 2015), as Levitt noted as far back as 1966, “most of what we see as new in the marketplace is not new at all, but is rather `innovative imitation'. '' Consumers' susceptibility to perceived product similarity arises from various factors, including socio-demographic characteristics, unethical marketing practices, and information asymmetries (Chauhan and Sagar, 2021). 12 In today's online shopping landscape, the cosmetics and personal care industry is characterized by products with increasing visual similarities, leading consumers to rely heavily on visual cues to distinguish between brands. This reliance on visual information, especially when confronted with similar-looking products promoted with comparable messages, prompts increased mental processing and heightens the risk of confusion (Schwarz, 2004). Moreover, similarity confusion in the cosmetics and personal care industry can extend beyond visual aspects. For example, Similarity in terms of Pricing, product Claims, ingredient Lists, Marketing Messages, Product Names, and Promotional Offers are often found. Similarity confusion has profound effects on consumer decision-making, often resulting in delayed choices or complete abandonment. Consumers, aware they might unintentionally purchase a different brand, scrutinize alternatives more thoroughly, causing decision delays (Jacoby and Morrin, 1998; Mitchell and Papavassiliou, 1999). The uncertainty around brand sameness leads to consumers opting for a 'no-choice option' to avoid challenging trade-offs (Tversky and Shafir, 1992; Dhar, 1997). Despite the expectation of decision postponement, some consumers may not delay purchases when perceiving brands as highly similar, employing heuristics like choosing the lowest-priced option (Warlop et al., 2005). Ambiguity Confusion To gain a comprehensive understanding of consumer confusion, Walsh et al. (2007) suggested expanding the antecedents of consumer confusion beyond similarity and overload confusion to include a third dimension, ambiguity confusion proneness. They defined ambiguity confusion as consumers' tolerance to handle unclear, misleading, or ambiguous products, product-related information, or advertisements (Walsh et al., 2007). Ambiguity confusion arises when consumers must reconsider their existing beliefs about products, services, and the shopping environment (Mathur, 2020). In 13 contemporary markets, consumers frequently encounter ambiguous product claims and advertising messages. Ambiguity and confusion in consumer decision-making arise from various sources, including: a. Deceptive product claims (Parasidis et al., 2015) b. Misleading advertising and sales promotions (Scardamaglia & Daly, 2016; Mitchell & Papavassiliou, 1999) c. Inappropriate product labeling (Olsen et al., 2003; Hall-Phillips & Shah, 2017; Leek et al., 2015) d.