The Dual Impact of Product Line Length on Consumer Choice

Abstract

Although extant literature has argued for both positive and negative effects of product line length on choice, i.e. a “dual impact,” such a possibility has not been empirically investigated. This is the first study to address this issue, using a multiple discrete choice model for horizontally differentiated goods. The authors argue that the dual impact of product line length is due to competing effects of the two constituent dimensions of product line structure: a positive effect of product line width (total number of product configurations offered) and a negative effect of average line depth (average number of SKUs per product configuration). They also examine the moderating role of choice diversification propensity manifested in multiple discreteness. An empirical application in the potato chip market confirms the expectations regarding the competing effects of the two product line dimensions and hence the dual impact of product line length. Furthermore, the negative effect of average line depth is found to be more pronounced for households with higher choice diversification propensity. These findings are not only novel but also meaningful since simulations show that the corresponding effects influence product line management decisions and new product design.