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Model mix: a halo or a headache?

The Economist recently quoted an experiment
where supermarket shoppers were offered tastings of 24 types of jams and then had the opportunit to buy their chosen one.

The experiment was then repeated, but with
only six jams.

The result?

Ten times more people in the second experiment bought a jar than those in the first experiment.

Faced with 24 alternatives, consumers feared they were bound to choose the wrong one and did not have time to sample all 24 choices.

The implications for car manufacturers are clear – how many versions should they offer and in what configuration?

On one hand, marketers are always looking for niches to exploit but, on the other, both customers and sales people are scared of complexity.

Given too many choices, the default reaction is to make one very simple choice: run away.

The reactions of car companies to this problem are variable: for example, Ford offers 63 versions
of the Mondeo, while Vauxhall offers 150 types of Insignia, of which 18 are versions of the Insignia
2.0 CDTI 4x4 (most people probably do not know there is one version of that car).

The ideal configuration is a simple ladder with evenly spaced rungs. In terms of trims, that
implies base, mainstream, luxury and high luxury.

Where it gets tricky is the issue of sports versions.

Sports models have three jobs to do.

At their simplest they are there to appeal to enthusiasts, but they also make the model mix richer and therefore more profitable.

Finally, they provide a halo to the rest of the range.

Or do they?

Getting the right mix of models and configurations is critical for carmakers.

Did Renault sell any more of the last-generation Meganes because the motoring media raved
about the RenaultSport versions, culminating in the borderline insane R26R?

Anyone who was enough of an enthusiast to know about Renault-Sport was probably enthusiast enough to know all about the dynamic failings of the mainstream models.

Renault ended up with two disconnected ladders, one for mainstream and one for sports
models (although to be fair, the third generation Megane has a far more coherent range).

The other potential problem is creating such a strong performance image that the lower rungs
of the ladder get kicked away.

To most people Subaru Impreza means “WRX/STI turbonutter” – the Subaru performance halo is more like a cloud that obscures the lower range models.

The ideal scenario for a sports version is a base model that has a credible reputation for good
handling, plus a genuine presence in motorsport – say world rallying.

Step forward the Ford Fiesta – except there is not (or not yet, at least) a hot roadgoing Fiesta.

Oh dear, building ladders is a surprisingly difficult business.

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