First, there is really an interesting point regarding product line and reducing the size of the product line. They discuss a lot of operational issues regarding why you want less choice - all of which I agree with. In marketing we always talk about the marginal increase in sales you get with additional options. Their 5 most popular choices account for 77% of their sales. Economically, when you think about distributing your fixed costs over a greater number of goods, if the variable costs don't increase (which in this case they may due to inventory costs) then shouldn't we always consider expanding our product lines? Don't we want that other 23% of sales? What would the Paradox of Choice say about this?
Secondly, think about how this product is sold. What are customer's really buying? What needs do the cookies satisfy? How do consumers choose how many boxes to buy (or whether to buy at all)? Does this change how they can design their product line?
Third, did you know that Girl Scout cookie names are regional? I grew up with Samoas in New Jersey. I just thought that the the GSA has changed the name of the cookie by the time I moved to Texas - I didn't realize that regionally they are called Caramel deLites. Have they always been called that in Texas? (The same is true with Tagalongs being called Peanut Butter Patties)
Fourth, costs have been going up and sales have been pretty flat. So, besides trying to increase their sales through MBA style boot camps, they are using the technique we just discussed in class of downsizing their product: there will be one ounce less of cookie in each box.
By the way, 14-year-old Peach Norman Owen of Cincinnati sold 2,000 boxes of cookies last year. Think about just the sheer size of that!
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ReplyDeleteWhat are Caramel deLites called in New Jersey?
ReplyDeleteI've lived in either Austin or Fort Worth my entire life and they have always been called Caramel deLites and Peanut Butter Patties in Texas (as far as I'm aware).
- Alex T.
Caramel deLites are called Samoas in NJ. Peanut Butter Patties were called Tagalongs.
ReplyDeleteI actually read this article too a few weeks back and was surprised by the product cut-backs. Seems to me like they are still in full force. Regardless, they're keeping my favorite thin mints so it doesn't bother me much. I didn't know about the regional names until I read the article, but I had heard of all those names so it really cleared things up for me!
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