Sunday, December 02, 2007

Product proliferation: When is consumer choice enough?

Anyone who has shopped for toothpaste in the past twenty years has probably felt more and more overwhelmed by the number of choices within all the major brands. In the old days, each manufacturer offered one or two flavor choices. Now there's toothpaste for cavity protection, tartar control, whitening, plaque protection, gingivitis protection, breath freshening and sensitive teeth.

You can choose your ingredients - baking soda, peroxide, and fluoride - as well as the texture - paste, gel or a combination. Then there are the flavors: fresh cool mint, fresh clean mint, icy blast, cinnamon spice, vanilla mint, mint zing, spearmint and sparkling mint. All of those are actual choices offered by just one brand.

The technical term for this marketing phenomenon is horizontal product line extension. This is when marketers expand their product offerings within the same category, price and quality range but vary other attributes such as color, fragrance or flavor. Vertical line extension is when marketers vary their offerings in terms of price or quality. Athletic shoes are a good example, or, in the food sector, you might recall that a major soup company offers tomato soup in different packages at different prices.

Horizontal line extension is not limited to toothpaste. Among food products you'll find it in products ranging from cola to coffee to pasta and even to milk. And it's certainly nothing new to farm produce marketing.

In fact you've probably extended your line over the years. How many varieties of apples, tomatoes, sweet corn, or peppers do you sell now compared to ten or twenty years ago? I wouldn't be surprised if it's more.

In agriculture, there's a ripple effect in line extension. As researchers develop new varieties, the seed companies offer more varieties, and farmers can in turn offer more varieties. Apples might be the most prolific in terms of varieties with differing attributes, but tomatoes, sweet corn and pumpkins are catching up.

Marketing experts who study product proliferation believe that there is a maximum number of choices that consumers will tolerate before they give up and switch to another brand with a simpler product line. If you've ever felt dismayed when trying to select a toothpaste or diet cola, you know what they mean.

The rationale behind extending a product line is to retain customers by offering more choice. According to research by business professors at Stanford and Northwestern universities offering new and unusual products can also result in a brief sales spike due to consumer curiosity.

For both reasons, offering more consumer choice makes sense as a marketing tool for farmers. If customers have more choices when buying from you, they won't have to go elsewhere to find a particular variety. And a new or unusual variety will pique customer interest, giving your bottom line a boost and drawing them in to buy your more conventional items.

The Stanford/Northwestern research determined mathematically, that there is a point at which it's no longer financially sound for a manufacturer to continue to expand a product line because of the costs of new product development. Vegetable and fruit growers have a slight advantage in being able to test a variety on a small amount of acreage.

But are farm marketers even close to maxing out and stressing out their customers with too many choices? I would say no, as long as customers have information on the attributes of each variety and how best to use them.

I think that consumers are intrigued by different and unusual produce varieties. After all, unlike toothpaste manufacturers who only have to find different ways to combine ingredients, agricultural researchers must figure out ways to make a tree or a plant produce a product that looks or tastes different. That makes a new sweet corn variety so much more interesting and impressive than a new kind of cola.

So, go ahead, try that new variety and offer it along with the old standbys to give your customers more choice. Add some supporting signage or flyers so they know what to expect and it's likely to be a recipe for marketing success.

This article first appeared in the August 2005 issue of Growing magazine.
Copyright 2007 Diane Baedeker Petit