Title: Managing product variety decisions for sustainable profitability in B2B industries

Authors: Florian Kuffer; Leo Brecht

Addresses: Universität Ulm, Helmholtzstraße 22, 89081 Ulm, Germany. ' Universität Ulm, Helmholtzstraße 22, 89081 Ulm, Germany

Abstract: The aim of this research is to increase the understanding of the decision process concerning the introduction of new product variants and its effects on sustained profitability. Although more variety improves the potential for generating increased revenues, there are potential adverse effects, resulting from increased complexity. This paper argues that product variant decisions need to consider not only internal, but also external drivers. The qualitative research is based on a series of semi-structured interviews with ten business units of leading German and Swiss companies in the manufacturing and engineering sector. The results indicate that drivers impacting variant decisions arise from three clusters: customer requirements, the major cluster driving variant proliferation; competitive situation, determined by competitors' behaviour, market forces and opportunities; modularisation/standardisation, offering the potential to delivery variety while limiting cost impacts. One major conclusion is, while managers are aware of potential adverse variety effects they still expect positive overall benefits.

Keywords: product variant management; variety drivers; complexity costs; economic sustainability; B2B industries; complex products; manufacturing industry; engineering industry; product portfolios; sustainable profitability; variety decisions; business-to-business; decision processes; new product variants; increased revenues; increased complexity; internal drivers; external drivers; Germany; Switzerland; customer requirements; variant proliferation; competitive situations; competitor behaviour; market forces; market opportunities; competitors; modularisation; standardisation; cost limitation; cost impacts; positive benefits; technology marketing; strategic practices.

DOI: 10.1504/IJTMKT.2012.048125

International Journal of Technology Marketing, 2012 Vol.7 No.3, pp.287 - 305

Received: 17 Dec 2011
Accepted: 10 Apr 2012

Published online: 23 Jul 2012 *

Full-text access for editors Access for subscribers Purchase this article Comment on this article