The interplay of brand-line assortment size and alignability in the sales of brand-lines and line-extensions of frequently purchased products

Abstract

Assortment size is paramount for brand-lines, due to its impact on performance. However, recent experimental research suggests an interaction with alignability: large nonalignable lines might be unfavorable, due to increased complexity and regrets. Using panel data, we confirm this negative interaction for brand-line sales. However, size has a strong positive effect which overcompensates for its negative interaction with nonalignability. Increasing it is always beneficial, even for nonalignable lines. In comparison, store assortment size demonstrates a negative impact on sales, due to the increase in category clutter it causes. We also study size and alignability effects in the case of a line-extension (new product in the same category). Here, the positive impact of line size is thwarted by established brand-line product cannibalization, a phenomenon positively influenced by brand-line strength and alignability. Thus, depending on brand-line strength and alignability strategies, a large size is not always favorable to line-extension sales.