Recently, my wife and I contemplated replacing our kitchen faucet and decided to investigate options. Hooray for showrooms, but we didn't feel like wasting hours shopping given that we had our sights set on something pretty specific - a pull-out adjustable spray faucet. So I Googled.
Recently, my wife and I contemplated replacing our kitchen faucet and decided to investigate options. Hooray for showrooms, but we didn't feel like wasting hours shopping given that we had our sights set on something pretty specific - a pull-out adjustable spray faucet. So I Googled.
Might as well try to select a favorite star in the Milky Way. Cyberspace revealed scores of pull-out models bearing the brands of about a dozen credible manufacturers. Most looked pretty similar, which told me design engineers have only so many ways to make pull-out spouts workable. Pricing also was virtually the same within quantum-like price point levels. Who can tell what might be the best choice among so many comparable products? Imagine how daunting the task would be had we not narrowed the search to pull-outs.
Don't all of us face the same kind of dilemma day-to-day? Take your kids to Baskin-Robbins and you'll fidget for 15 minutes waiting for them to decide their favorite delights. Everything from breakfast cereal to toothpaste to bread to you-name-it is presented in a dizzying array on supermarket shelves - to the point that shelf positioning is a key concern to grocery marketers. A liquor emporium in my community boasts hundreds of brands of beer and wine. Even high-tech products like computers and cell phones have become commoditized thanks to the selection glut. So have so many of the PHCP brands that you folks sell.
Complaining about this epidemic of plenty puts me on a guilt trip. We ought to take pride in our nation's advanced economy to be blessed with so many choices. It's downright jaded to think otherwise. Yet, I can't shake the feeling that in our industry and many others product proliferation has reached the point of diminishing returns and presents as many negatives as positives.
The main positive is the notion of providing customers with something that fulfills virtually every conceivable want and need. Competition drives manufacturers to stay one step ahead of the Joneses by constantly coming out with new wares. Classic economic theory says this should result in constant improvement and innovation.
However, the real world suggests proliferation often has a negative impact on product quality. New products developed to fill small market niches consume resources that otherwise would go toward strengthening mainstream offerings. The marketing department often steers engineers toward one-upmanship that ends up existing only in sales literature. With plumbing fixtures and faucets, most new features are nothing more than stylistic twists rather than anything that enhances performance of these mature products.
A recent survey of 424 executives from a variety of industries by a Wharton School online subsidiary found 32% saying increased product complexity had a negative impact on product quality. The same survey showed 45% citing negative impact on capital efficiency, 35% on profitability, 29% on sales effectiveness and 24% on customer service and satisfaction.
Expanded product offerings place strain on manufacturer and distributor resources. One of the most common complaints of plumbing contractors is that “wholesalers never have what I need anymore.” That's an exaggeration, of course, but the perception of increased stock-outs stems from the fact that there are so many skus of everything to choose from and no supply house can keep everything on its shelves. Central distribution, rep and master distributor warehouses have expanded to fill the gaps, but having something available within 24 hours is not the same as having it when the customer asks for it.
PHCP product proliferation stems in part from the consolidation wave throughout our industry's supply chain. As manufacturers gobble up other manufacturers their product lines expand. Pressure grows to increase sales of marginal products to justify the cost of acquisition. Distributors, too, take on the lines of acquired rivals to add to their own. Some winnowing takes place, but in the end mergers almost always result in more things for a company to sell.
PHCP distributors are always trying to reduce marginal product lines and vendors. At the same time, they keep getting bombarded with pitches to buy and sell new things. Everyone is reluctant to ignore market niches that spread risk and hold growth potential. In the aforementioned Wharton survey, 40% of the executives felt that product proliferation gives them a competitive edge.
The good news is that problems of plenty are nowhere near as difficult to contend with as those caused by scarcity. It merely takes decisiveness on the part of purchasing decision makers.
Now I need to practice what I preach, because I still haven't figured out which kitchen faucet to get.
