The problem with SKU proliferation

July 24, 2009 by Noel Gomez
Filed under: Marketing, Strategy

TechCrunch has a short post on the number of models of handsets Nokia and Sony Ericson have on their site.

For reasons of market segmentation and distribution strategies electronics companies choose to spin new almost identical models of products which on some marketing plan may seem reasonable, but which in fact tend to confuse the customer and add operational overhead.

Whenever someone asks me about a laptop I can quickly tell them about all the Apple models, not only because I am a Mac user, but because remembering the permutations is incredibly simple. MacBook, MacBook Air, and MacBook Pro. It’s not hard to remember even for a person who tends to forget things, like me.

Look at companies like Toyota and Honda and you will find the same thing. Very simple, clearly differentiated models each targeting a specific segment of the market.

Large consumer manufacturers should take note and not create a new indistinguishable model just to sell a “different” TV at Costco. The iPod you can get at Costco and Walmart are in fact the same ones you get at Best Buy or at the Apple store. Simple for the company and simple for the consumer.

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