Assessing the Dimensions of Product Variety on Performance: The Value of Product Line and Pack Size

This article studies the impacts of product variety along two dimensions: product‐line variety and pack‐size variety. Previous research has often found that increased product variety is associated with increased sales. Interestingly, we find that this is not always the case, once the negative impact...

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Bibliographic Details
Published in:Journal of business logistics 2014-09, Vol.35 (3), p.213-224
Main Authors: Wan, Xiang, Dresner, Martin E., Evers, Philip T.
Format: Article
Language:English
Subjects:
distributors
fill rates
pack size
Packaging
product line
Product lines
product variety
Sales
Studies
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Summary:This article studies the impacts of product variety along two dimensions: product‐line variety and pack‐size variety. Previous research has often found that increased product variety is associated with increased sales. Interestingly, we find that this is not always the case, once the negative impact of product variety on fill rates is introduced. Specifically, product‐line variety has a positive total effect on sales, but pack‐size variety has a negative total effect on sales. We also investigate potential nonlinear impacts (with decreasing marginal effects) of product‐line and pack‐size variety, and find the result to be one of diminishing returns.
ISSN:0735-3766
2158-1592
DOI:10.1111/jbl.12054