Jalapeño cheddar or zesty lime. Crinkle cut or wavy. Potato chips are as varied as people’s appetites – and the chances are pretty good that everyone’s local corner store features dozens of choices to suit every taste. But do the countless variations of this humble snack food satisfy consumer demand for variety, or intimidate the indecisive by making it too difficult to choose?
According to Desautels Professor Demetrios Vakratsas, extensive product choice could have both of those effects at once. His research has trained an empirical lens on potato chip product lines to explore whether a wide assortment of product configurations – such as different chip flavours – could help boost sales by offering consumers the kind of choices that they want to have. At the same time, offering similar options with different attributes – like crinkle cut versions of familiarly flavoured chips – could dissuade consumer purchases by reducing a product’s perceived distinctiveness
Authors: W.-L. Wang and Demetrios Vakratsas
Publication: Production and Operations Management, Forthcoming; first published online as Early View: March 26, 2021
Although extant literature has argued for both positive and negative effects of product line length on choice, i.e. a “dual impact,” such a possibility has not been empirically investigated. This is the first study to address this issue, using a multiple discrete choice model for horizontally differentiated goods. The authors argue that the dual impact of product line length is due to competing effects of the two constituent dimensions of product line structure: a positive effect of product line width (total number of product configurations offered) and a negative effect of average line depth (average number of SKUs per product configuration). They also examine the moderating role of choice diversification propensity manifested in multiple discreteness. An empirical application in the potato chip market confirms the expectations regarding the competing effects of the two product line dimensions and hence the dual impact of product line length. Furthermore, the negative effect of average line depth is found to be more pronounced for households with higher choice diversification propensity. These findings are not only novel but also meaningful since simulations show that the corresponding effects influence product line management decisions and new product design.
In recognition of research excellence as it relates to publications in top-tier management journals, our Faculty has compiled a list of high quality, peer-reviewed management journals, which is referred to as the Desautels 22.