Businesses are constantly making decisions about which products and services will attract customers. In an era driven by the mantra of “give customers what they want,” some businesses feel compelled to offer many different versions of their products. This trend is relatively new. For years, blue jeans came in only one shade of blue and in only one style, but now they are available in a dizzying array of styles and colors. Yet some companies continue to stick to a single version of their products, making alterations only when technology impacts what they can provide or when competition shifts. Music publishers, for example, after decades of providing mainly bundles of songs on compact discs or records, have, in recent years, made individual songs available as well — thanks to technological changes that have made distribution over the Internet less costly to them and more efficient for consumers.
How can companies design products and product lines to maximize their profits? Out of all the potential configurations available, how should companies decide which ones to offer? We have developed a framework for balancing the costs of developing and offering a rich line of products and services against customer demand for additional choice. (See “About the Research,” p. 46.) Our methodology allows managers to make informed decisions about product-offering architecture: which features to include in... To read the complete article, login or sign-up using the form below.
Subscribe today to read this article.
Buy this article. Purchase one or more copies of this article in PDF form.
Subscribe today to read the most recent articles and the current issue of MIT Sloan Management Review.
Become a premium subscriber today to read this article and the entire archive of MIT SMR articles.
Sign in if you have registered already for the website
Do you subscribe the MIT Sloan Management Review in print? Enter the email address and password you used when ordering. Don't remember? Lookup your subscription account information
- Register for free access to recent articles and the current issue of MIT Sloan Management Review.
- Subscribe and read articles from the past three years online.
- Premium subscription give you access to the entire archive of articles.
