Issue #0327/3 - A range of products that is twice the size of its competitors’ — confusion and inefficiency?
Has Hewlett-Packard gone viral with the launch of its new consumer product range, comprising no less than 158 consumer digital imaging and digital entertainment products under the banner ‘Big Bang 2’, following on from the original Big Bang launch a year ago?
Has such an element of confusion been injected into the range that potential buyers will look elsewhere or ‘just buy the cheapest’?
Is Hewlett-Packard wasting money on an egotistically large product range?
September’s consumer price list from the Imaging and Printing Group (IPG) lists no less than 71 Printer, All-in-One, Scanner and Digital Camera products (not including certain bundles) - see accompanying table for more detail – and then there are the business ink jet and larger format products not included here. Of these consumer products, at least 27 (38%) are specifically digital imaging enabled (e.g. cameras, PhotoSmart printer and scanner models, All-in-Ones with card slots) and all printer/AiO products have PhotoRET III or IV capability for photo printing. Even this list of 71 is not yet complete as more new products are still due in the autumn timeframe, albeit some existing products are due to be removed.
| Printer | All-in-One | Scanner | Camera | |
|---|---|---|---|---|
| Canon | 12 | 6 | 8 | 10 |
| Epson | 9 | 2 | 6 | 1 |
| Hewlett-Packard | 19 | 22 | 20 | 10 |
| Lexmark | 7 | 12 | - | - |
Hewlett-Packard should be applauded for listening to the customer, being forward-looking and driving ink jet printer technology forwards at an amazing rate. One has only to look at the fact that Hewlett-Packard’s ink jet nozzle firing rates have kept pace with Moore’s Law over the last 17 years (TCPglobal issue 0317 - "Moores Law works for ink jet technology") and that photo reproduction has reached such a high level to appreciate Hewlett-Packard’s contribution to home and office printing.
However, compare the numbers of products with the other three major producers of ink jet printers and we see Hewlett-Packard with double the number of products of it nearest rival, Canon, which has 36 products within the same four categories – Printers, All-in-Ones, Scanners and Cameras. Epson has just 18 products and Lexmark has 19 with only one digital camera in the Epson range and not a single scanner or camera in the Lexmark range! What is interesting is that, against Hewlett-Packard’s 38%, 50% of Epson’s range is photo designated while 55% of Canon’s range is specifically targeted at digital imaging users and 58% of Lexmark’s claim high quality photo resolutions [Bearing this in mind, it seems bizarre that Lexmark has no scanner or camera products and claims not to have any plans to move in that direction!].
Intrinsically, none of the new range of printer products from Hewlett-Packard is based on brand new print technology. The lower end printers and All-in-Ones are based on PhotoRET III and even the latest top of the range PhotoSmart printers and All-in-Ones are still based on PhotoRET IV – although the best of the best do also have the new PhotoRET Pro technology for the black and white photo enthusiast (see - "PhotoRET Pro from Hewlett-Packard offers perfect black and white photo printing"). The printer range now includes models with PhotoRET III, PhotoRET IV and PhotoRET Pro using the No. 14 cartridges and the newer No. 56/57/58/59 cartridge set.
To emphasise the overbearing nature of the range, we have undertaken a brief snapshot – focusing on the print-based products only that are on display in five retail stores. With the four manufacturers producing 87 different models of print-based product between them, the five stores were displaying a total of 105 units, with obvious degrees of overlap between stores (see figure 1). This means that the five stores between them can only manage to display a few more units (21%) than the total number of models produced by all four manufacturers together that represent only two-thirds (67%) of the models available (indeed, at least four of the units in one store were discontinued products!).
Percent of available products found in-store - by manufacturer
Epson achieves far and away the highest display-to-product ratio of the four manufacturers, whereas Hewlett-Packard’s performance is mediocre at best, capable of taking second place in only one store. Even Lexmark tends to outstrip Hewlett-Packard in this respect.
In-store profile, however, shows a rather different picture (see figure 2). Hewlett-Packard has the highest profile in three of the five stores with 50% more units on-shelf than Epson and having the most units on-shelf in three of the five stores.
One has to ask oneself, ‘what is the motivation for having such a large range of products when so few can be displayed in-store?’
Hewlett-Packard claims to have identified 9 clear market categories. This may be (though I’m sceptical) - but are there 9 categories of buyer and does the company need 9 PhotoSmarts, 10 DeskJets, 14 OfficeJets and 8 PSC models (41 products) to adequately service 9 market categories?
Surely this number could be cut by half? Surely the result is inefficiency? Surely the result is unnecessary money spent on production and marketing of such a large range of products?
Consider a typical product development and sales cycle, including: conceptualising; planning; market research; technology development; industrial design; aesthetic design; factory tooling; parts procurement; manufacturing; assembly; packaging design; packaging manufacture; packing; storage; shipping; distribution; marketing research; marketing; all the management implications of each stage; and probably more!
Number of units found in-store - by manufacturer
A key aspect of product planning is differentiation. In order to avoid confusing the customer there has to be some clear reason for making a choice between any two products within a product range, regardless of which two are chosen to compare. Here we have Hewlett-Packard spending in all these areas on products where adequate differentiation is questionable.
Generally accepted in manufacturing circles is the principle that minimising SKUs equals maximising efficiency and profitability. Surely it would serve the customer, the channel and ultimately Hewlett-Packard itself better to reduce confusion for the customers, simplify the buying process, get a higher proportion of the product range onto the shelves and reduce the manufacturing and overhead costs, thus allowing product prices to be reduced and also margins and profits to be increased!
~End~
