Multimarket competition effects on product line decisions – A multi-objective decision model in fast moving consumer goods industry

Abstract

In a multimarket competition, firms experience increased contacts with competitors under various product-geographic markets, exhibiting mutual forbearance, which in turn deters firms to venture into product proliferation. However, firms do engage in the same through horizontal product differentiation through 'brand extensions.' Since marketers face imprecise goals, we propose a multi-objective product line decision model for pruning or continuing product lines. Specifically, this is done by using a fuzzy goal-programming method while validating it using a dataset (comprising of eighty thousand households) from the Indian tea industry. Our findings reveal that in the festive season, a firm should only focus on limited brands and prune the rest to maximize its revenue while increasing the spending on advertising and the sales and distribution overheads. However, during the end of the financial quarter, the focus should be on achieving targets by maintaining a broader product portfolio.