Blockbuster vs. Scattershot: A Contingent Relationship between Product Line Length Strategy and Performance in the Fast-Moving Consumer Goods Industry

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Abstract

Some firms focus on few products with broad appeal, whereas others leverage variety as an important part of their offering. This study investigates the conditions under which each of these product line length strategies is optimal in the fast-moving consumer goods industry. It does so by focusing on the relationship between product line length strategy and firm top-line performance, in the light of a discrete framework derived from the strategic fit paradigm and the strategic triangle. Results show that customer factors (i.e., variety per household and value per purchase) and competitor factors (i.e., concentration and proliferation) drive the strategic fit of a firm’s product line length strategy to the market in which it competes, so that firms deploying market-fitting strategies face higher odds of market share growth than firms deploying contrarian strategies. Firms with certain company factors (i.e., innovativeness and brand equity), however, face higher odds of market share growth by challenging the market fit and deploying contrarian strategies than by deploying market-fitting strategies. This study offers a stepping stone towards addressing product line length strategy as a discrete choice on product line positioning, an innovative approach with potential to generate concrete business impact.

Keyword(s)

competitive strategy; fast-moving consumer goods; product assortment; product line length; product proliferation

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