KEY PRINCIPLES FOR SALES CONFIGURATION DESIGN

By offering differentiated products a firm may be able to increase product price or market share because of the better fit of its products with what customers demand. However, the decision to proliferate the product offer, or to just allow customers to define more and more product features does not automatically lead to greater customer satisfaction. In fact a wide assortment of product variants and options may end up confusing the customer. Ultimately, while trying to please its customers by offering increased product variety, a firm may end up confusing or annoying its customers, thus loosing potential sales. In other words, the firm faces a “product variety paradox”. Recent developments in Information and Communication Technology made available a class of software products, often termed as “product configurators”, which appears to offer new solutions not only to the back office – automatically generating technical product documentation – but to the front office as well – supporting the interaction with the customer when custom products are offered. To date, however, we still know very little of the potential of such class of software products to reduce the “product variety paradox”. The present paper analyzes the underlying principles on which successful sales configurators have been built. In doing so, the paper attempts a formalization of the mechanisms through which a firm’s product assortment can be efficiently and effectively presented to the customer. Furthermore discuss how these mechanisms, as a whole interact and how they can increase a firm’s commercial success. Finally, the paper speculates about the possibility of considering the proposed mechanisms as general principles to describe efficiently and effectively a firm’s product assortment.