Page 362 - Marketing Management

SETTING PRODUCT STRATEGY | CHAPTER 12 339

Product Line Length

Company objectives influence product line length. One objective is to create a product line
to induce up-selling: Thus BMW would like to move customers up from a 3-series vehicle to a
5-series and eventually even a 7-series vehicle. A different objective is to create a product line
that facilitates cross-selling: Hewlett-Packard sells printers as well as computers. Still another
objective is to create a product line that protects against economic ups and downs: Electrolux
offers white goods such as refrigerators, dishwashers, and vacuum cleaners under different
brand names in the discount, middle-market, and premium segments, in part in case the econ-
omy moves up or down. Companies seeking high market share and market growth will gener-
ally carry longer product lines. Companies that emphasize high profitability will carry shorter
lines consisting of carefully chosen items.
Product lines tend to lengthen over time. Excess manufacturing capacity puts pressure on the
product line manager to develop new items. The sales force and distributors also pressure the company
for a more complete product line to satisfy customers. But as items are added, costs rise for design and
engineering, inventory carrying, manufacturing changeover, order processing, transportation, and
new-item promotions. Eventually, top management may stop development because of insufficient
funds or manufacturing capacity. A pattern of product line growth followed by massive pruning may
repeat itself many times. Increasingly, consumers are growing weary of dense product lines, overex-
tended brands, and feature-laden products (see “Marketing Insight: When Less Is More”).
A company lengthens its product line in two ways: line stretching and line filling.

LINE STRETCHING Every company’s product line covers a certain part of the total possible
range. For example, Mercedes automobiles are located in the upper price range of the automobile

Smart marketers realize it’s not just the product lines making con-
sumer heads spin—many products themselves are too complicated for
the average consumer. Royal Philips Electronics asked 100 of its
top managers to take various Philips electronic products home one
Marketing InsightInsight weekend and see whether they could make them work. The number of
Marketin
g
executives who returned frustrated and angry spoke volumes about the
challenges the ordinary consumer faced.
Sources: Dimitri Kuksov and J. Miguel Villas-Boas, “When More Alternatives Lead
When Less Is More to Less Choice,” Marketing Science, 2010, in press; Kristin Diehl and Cait Poynor,
“Great Expectations?! Assortment Size, Expectations, and Satisfaction,” Journal of
Marketing Research 46 (April 2009), pp. 312–22; Joseph P. Redden and Stephen
With thousands of new products introduced each year, consumers find it J. Hoch, “The Presence of Variety Reduces Perceived Quantity,” Journal of
ever harder to navigate store aisles. One study found the average shop- Consumer Research 36 (October 2009), pp. 406–17; Alexander Chernev and
Ryan Hamilton, “Assortment Size and Option Attractiveness in Consumer Choice
per spent 40 seconds or more in the supermarket soda aisle, compared Among Retailers,” Journal of Marketing Research 46 (June 2009), pp. 410–20;
to 25 seconds six or seven years ago. Richard A. Briesch, Pradeep K. Chintagunta, and Edward J. Fox, “How Does
Although consumers may think greater product variety increases Assortment Affect Grocery Store Choice,” Journal of Marketing Research 46 (April
2009), pp. 176–89; Aner Sela, Jonah Berger, and Wendy Liu, “Variety, Vice and
their likelihood of finding the right product for them, the reality is often Virtue: How Assortment Size Influences Option Choice,” Journal of Consumer
different. One study showed that although consumers expressed Research 35 (April 2009), pp. 941–51; Susan M. Broniarczyk, “Product
greater interest in shopping with a larger assortment of 24 flavored Assortment,” Curt P. Haugtvedt, Paul M. Herr, and Frank R. Kardes, eds.,
Handbook of Consumer Psychology (New York: Taylor & Francis, 2008),
jams than a smaller assortment of 6, they were 10 times more likely to pp. 755–79; Cassie Mogilner, Tamar Rudnick, and Sheena S. Iyengar, “The Mere
actually make a selection with the smaller assortment. Categorization Effect: How the Presence of Categories Increases Choosers’
Similarly, if the product quality in an assortment is high, consumers Perceptions of Assortment Variety and Outcome Satisfaction,” Journal of
Consumer Research 35 (August 2008), pp. 202–15; Alexander Chernev, “The Role
would actually prefer a smaller than a larger set of choices. Although of Purchase Quantity in Assortment Choice: The Quantity Matching Heuristic,”
consumers with well-defined preferences may benefit from more differ- Journal of Marketing Research 45 (April 2008), pp. 171–81; John Gourville and
entiated products that offer specific benefits to better suit their needs, Dilip Soman, “Overchoice and Assortment Type: When and Why Variety Backfires,”
Marketing Science 24 (Summer 2005), pp. 382–95; Barry Schwartz, The Paradox
too much product choice may be a source of frustration, confusion, and of Choice: Why More Is Less (New York: Harper Collins Ecco, 2004); Alexander
regret for other consumers. Product proliferation has another downside. Chernev, “When More Is Less and Less Is More: The Role of Ideal Point Availability
Exposing the customer to constant product changes and introductions and Assortment in Choice,” Journal of Consumer Research 30 (September 2003),
pp. 170–83; Sheena S. Iyengar and Mark R. Lepper, “When Choice Is
may nudge them into reconsidering their choices and perhaps switching Demotivating: Can One Desire Too Much of a Good Thing?” Journal of Personality
to a competitor’s product. and Social Psychology 79, no. 6 (December 2000), pp. 995–1006.