Is bigger actually better when it comes to product lines? Today’s consumers demand and expect a wealth of choices in everything from sneakers to potato chips, but while large product lines provide abundance and variety, they don’t always result in sales—and can even take away from a company’s bottom line.
In new marketing research, Desautels Faculty of Management Professor Demetrios Vakratsas explores how consumers respond to certain types of product options more than they do to others, specifically how additions to different dimensions of a product line affect the choices consumers make. Will a change in colour or shape make a shopper reach for one product over another or send them to another brand altogether? The way successful additions are implemented provides valuable insight into how manufacturers and retailers can optimize their offerings.
Interdimensional depths & breadths
Vakratsas took a closer look at the two dimensions of product lines—breadth and depth—to determine their role in choice-making today. Breadth refers to different products under the same brand, like a novel flavour of a familiar potato chip—think Spicy Sweet Chili Doritos. In contrast, a product line’s depth refers to multiple variations on the same basic product, like package sizes or a different cut of the same flavour chip—such as Wavy Lay’s chips.
Vakratsas found that consumers respond more strongly to a product line’s breadth, whether to trendy options or original novelties, than they do to its depth. “If you add breadth to your product line, you are adding variety, and consumers get more choice. They are more likely to choose your brand,” says Vakratsas. “Typically, when consumers purchase multiple products in a single shopping trip, they buy from the same brand.”
The positive effect of added variety is especially pronounced among consumers that already prefer variety. The study examined purchases at the household level, finding that large households were most likely to show this preference for more variety. After all, the more people, the more preferences to cater to.
When less really is more
A new attribute can prove to be very popular.
But it’s important to understand that less variety and more product variations can also work well for some shoppers, says Vakratsas. “Product line depth is not necessarily detrimental,” he explains. “It adds more variations of a product, but consumers do not respond as strongly to it. However, a new attribute can prove to be very popular.”
These findings have implications for how retailers stock their shelves and how manufacturers manage their product lines and develop new products. An optimal level of breadth and depth can help drive sales if that level is determined specifically to individual products and different clienteles.
“One criticism of larger product lines has been that having too many items can confuse consumers. Some experimental research has shown that when people are faced with multiple options, they sometimes choose the option not to buy at all,” says Vakratsas.
“Our work shows that large product lines can be good or bad, depending on whether you focus on their depth or breadth, and how much your customers prefer variety,” he adds.
Variety is the spice of sales
Though Vakratsas focused on potato chips as his research subject, he expects the finding would hold true other products too, such as different flavours of breakfast cereal (breadth) vs. low-sugar or organic versions of your favourite cereal brand (depth).
“People look for variety, so I would encourage manufacturers to be open to stocking products that offer that variety—especially greater breadth, because this can catch the eye of consumers,” says Vakratsas.
He suggests that breadth might also be used as a strategy to create local traffic and bring more people in to the store. In other words, a retailer might position itself as having a wide assortment of products.
Of course, there are other ways for retailers to differentiate themselves, and for some, added variety might make little difference, Vakratsas adds. “For a club retailer like Costco, more variety would not necessarily work,” he says. “Their strategy is to have membership and better prices.”
Big box stores like Costco tend to only stock certain flavours of certain products and offer good prices on products that they know are extremely popular—like the original chip flavour. But Vakratsas points out that “if you want to differentiate your product and attract consumers, a wider assortment could be a good strategy.”