Does Product Variety Increase Product Sales?

The research on the effect of product variety on product sales has different variables involved. the results differ from each other depending on the type of variable put into consideration. Generally, production of different types of product increases the its sales. Product variety involves producing more different forms of a product. Different people have different preferences and opinions. For an organization to be able to cater for these differences, product variety is essential. By producing a variety of different products then the needs of many customers get fulfilled. Doing more research has opened up my mind to view the issue in a broader way by considering all the variables. The research has brought me to a better understanding of all the factors that influence the sales of a product. Product variety involves production of different products in terms of size, brand and even weight. Considering the product market, product variety has both positive and negative impact. In a large market population, product variety leads to increased sale. Producing a variety of products means increasing the stock of the same product. This situation may on the other hand lead to reduced stock out rates hence product surplus.

The main factor that determines the sales of a product is the market size and its composition. Some consumers do not focus on the product differentiation but its purpose. Therefore, it is important for an organization to study the market population before considering product variety as a factor to increases sales. In the article ‘effects of product variety and inventory on retain sales’ by Zeynep and Raman, product variety has much impact on its sales. Increasing the variety of a company’s products increases inventory levels which helps meet the customer needs. The article also shows the indirect negative impact of product variety on phantom product at store. the article ‘the impact of product variety on retailer operational performance and sales’ by Sweeney and Donald, confirm that for the sales of a product to increase there are several factors to be considered. There are other impacts that come along with product variety. Product variety leads to increased inventory levels which require management costing the organization some money. It also confirms that despite the fact that product variety increases retail sales, it also increases the operational performance of a business. A store located in a low market area is likely to incur loses by increasing products due to increased operational cost.

References

Ton, Zeynep, and Ananth Raman. “The effect of product variety and inventory levels on retail store sales: A longitudinal study.” Production and Operations Management 19.5 (2010): 546-560.

Sweeney, Kevin Donald. THE IMPACT OF PRODUCT VARIETY ON RETAILER OPERATIONAL PERFORMANCE AND SALES: EVIDENCE FROM CHINA. Diss. 2015.