It is public knowledge that when Steve Jobs returned to Apple, he simply cut 70% of products that Apple was selling. This was not out of spite, but simply because he always wanted Apple to be something that customers bought happily.
When there are multiple products with very little differentiation, it becomes really difficult to decide. It’s almost as if the company is saying, “you have to make the right choice and you are to blame yourself if you choose wrong”. This causes a lot of stress while buying, often leading to postponement of the buying decision.
Steve came in and simply cut the offerings of computers into two categories, regular consumer and professional consumer.
This made choosing super simple.
This science of choosing how and where to structure your products and pricing them accordingly is called RANGE ARCHITECTURE. More often than not, when the range architecture is well planned, customers buy things faster, with more ease and more importantly do not have post-purchase regret. With good range architecture, the company takes a lot of onus of the purchase decision, by recommending what is suited for the customer.
General Motors is another company that had great range architecture which lasted really really long. These guys also did it with multiple brands and companies. A closer to home example would be Maruti distinguishing itself from Nexa.
Now CCL Products the parent of Continental Coffee makes thousands of blends, yes thousands ! For them to put a pin on a small no of offerings must surely have been a herculean task. Well, as difficult as it was they are now done with the product range for the future. The architecture is something like this.
This might be a little counter-intuitive as I’ve made an entire product offering list, but as a customer, you are very unlikely to even see what Continental is selling in other markets. For example, you are unlikely to find Continental Speciale retailing in a D’Mart in Hyderabad in the future. So all you need to decide is whether you want instant or filter. Choice done !
These structural changes that companies make, take a lot of work as well as a lot of guts and risk. However, not only are sales likely to move faster, but this also eases the working capital pressure a lot !
As always, CCL Products seems to be ahead on the Strategy Curve and makes for a great company to keep your eye on.
Disclosure – I’m invested and shall continue to be. Jab tak hai Jaan 😉
There is also something called decision fatigue.
Which is basically a person not buying anything at all due to being overwhelmed by options.
Great explanation, Thank you