Strategies for Product Variety: Lessons From the Auto Industry

Driven by the market's "pull" fir increasingly differentiated products and by manufacturers' "push" to seek finely targeted niche segments, the variety of products offered in most industries has increased steadily over the last several decades. The "pull" comes from customers who seem to reward companies that can offer high variety while matching the price and quality of competitors with narrower product lines. Modern marketing methods accelerate this trend by identifying once-obscure specifics of consumer preferences. As more companies compete internationally, product markets become more crowded and product differentiation more important, both to make a product stand out in a popular product category and to help tailor a product to niche markets. The "push" comes from new firm capabilities as the increased sophistication and declining price of flexible, programmable automation bring the opportunity for greater product variety within the grasp of many more companies.