Categorization by Groups

Categorization is a core psychological process central to consumer and managerial decision-making. While a substantial amount of research has been conducted to examine individual categorization behaviors, relatively little is known about the group categorization process. In two experiments, we demonstrate that group categorization differs systematically from that of individuals: groups created a larger number of categories with fewer items in each category. This effect is mediated by groups’ larger knowledge base and moderated by groups’ ease in achieving consensus. While neither broader nor narrower categories are normatively superior, more integration or distinction among concepts may be desirable for a given objective. Thus, it is important for those relying on the outputs of categorization tasks, such as web site designers, store managers, product development teams, and product marketing managers, to understand and consider the systematic differences between group and individual categorization.