Lessons from empirical studies in product and service variety management.

Abstract

For many years, a trend for businesses has been to increase market segmentation and extend product and service-variety offerings in order to provid more choice for customers and gain a competitive advantags. However, there have been relatively few variety-related, empirical studies that have been undertaken. In this research, two empirical studies are presented that address the impact of product and service variety on business and business function performance. In the first (service-variety) study, the focus concerns the relationship between service provision offered by UK-based, third-party logistics (3PL) providers and the operational and financial performance of those providers. Here, the results of a large survey identify the most important services offered by 3PLs and the most important aspects of 3PL operational performance. Also, the research suggests that the range of service variety offered by 3PLs does not directly influence the 3PLs’ financial performance. The second (product-variety) study presents the findings from an analysis of data from 163 manufacturing plants where the impact of product variety on the performance of five business functions is examined. An increase in product variety was found to influence business functions differently depending on the combination of customisation and variety offered to customers