Skip to content
Product cover

Designing the Right Product Offerings

October 1, 2007 | Mr. David S. Evans David_Evans@lecg.com, Ms. Karen L. Webster karen.webster@marketplatforms.com | Innovation
How can companies design products and product lines to maximize profits? Out of all the potential configurations available to them, how should they decide which ones to offer? The authors have developed a framework for balancing the costs of developing and offering a rich line of products and services against customer demand for additional choice. Their methodology helps managers make informed decisions about which features to include in the product; which variations to include in a product line; and how the offerings should evolve with technology and competition. Using examples from the music, software and media industries and citing companies including Apple, Dell, Microsoft, The New York Times, and ESPN, the authors describe five basic types of product offerings: the _ la carte offering, the specialization offering, the all-in-one offering, the basic/premium offering, and the have-it-your-way offering. By highlighting how costs influence product design, they depart from the standard product-success metrics, such as revenue and market share, which are the main focus of most of the work on product bundling.

The authors note that the decision to offer a product and how it is designed generally affects both the fixed costs and the marginal costs. They argue that product architects need to expand their definition of fixed and marginal costs beyond those that they typically track and account for to cover costs across the entire supply chain. Although some of these costs may be hard to quantify, they are often too significant to ignore.
Purchase Options

Educator and Student Discounts Available. Learn more »

  BENCHMARKS  
Loading Time: Base Classes  0.0004
My Controller Construct  0.0003
Build Nav  0.0006
Controller Execution Time ( Products / Route )  0.0384
Total Execution Time  0.0388
  GET DATA  
No GET data exists
  MEMORY USAGE  
1.5582 MB
  POST DATA  
No POST data exists
  URI STRING  
store/designing-the-right-product-offerings
  CLASS/METHOD  
products/route
  DATABASE:  MITSLOAN_DEV   QUERIES: 68  (Hide)
0.0003  

SELECT *
FROM (`carts`)
WHERE `cart_id` =  'ecd405773650fdb9dd3b7f46b788b550'
ORDER BY `created_at` DESC 
0.0002  

SELECT *
FROM (`carts`)
WHERE `cart_id` =  'ecd405773650fdb9dd3b7f46b788b550'
ORDER BY `created_at` DESC 
0.0001  

SELECT *
FROM (`carts`)
WHERE `cart_id` =  'ecd405773650fdb9dd3b7f46b788b550'
ORDER BY `created_at` DESC 
0.0001  

SELECT *
FROM (`carts`)
WHERE `cart_id` =  'ecd405773650fdb9dd3b7f46b788b550'
ORDER BY `created_at` DESC 
0.0001  

SELECT *
FROM (`carts`)
WHERE `cart_id` =  'ecd405773650fdb9dd3b7f46b788b550'
ORDER BY `created_at` DESC 
0.0001  

SELECT *
FROM (`carts`)
WHERE `cart_id` =  'ecd405773650fdb9dd3b7f46b788b550'
ORDER BY `created_at` DESC 
0.0001  

SELECT *
FROM (`carts`)
WHERE `cart_id` =  'ecd405773650fdb9dd3b7f46b788b550'
ORDER BY `created_at` DESC 
0.0001  

SELECT *
FROM (`carts`)
WHERE `cart_id` =  'ecd405773650fdb9dd3b7f46b788b550'
ORDER BY `created_at` DESC 
0.0001  

SELECT *
FROM (`carts`)
WHERE `cart_id` =  'ecd405773650fdb9dd3b7f46b788b550'
ORDER BY `created_at` DESC 
0.0001  

SELECT *
FROM (`carts`)
WHERE `cart_id` =  'ecd405773650fdb9dd3b7f46b788b550'
ORDER BY `created_at` DESC 
0.0001  

SELECT *
FROM (`carts`)
WHERE `cart_id` =  'ecd405773650fdb9dd3b7f46b788b550'
ORDER BY `created_at` DESC 
0.0001  

SELECT *
FROM (`carts`)
WHERE `cart_id` =  'ecd405773650fdb9dd3b7f46b788b550'
ORDER BY `created_at` DESC 
0.0001  

SELECT *
FROM (`carts`)
WHERE `cart_id` =  'ecd405773650fdb9dd3b7f46b788b550'
ORDER BY `created_at` DESC 
0.0001  

SELECT *
FROM (`carts`)
WHERE `cart_id` =  'ecd405773650fdb9dd3b7f46b788b550'
ORDER BY `created_at` DESC 
0.0001  

SELECT *
FROM (`carts`)
WHERE `cart_id` =  'ecd405773650fdb9dd3b7f46b788b550'
ORDER BY `created_at` DESC 
0.0001  

SELECT *
FROM (`carts`)
WHERE `cart_id` =  'ecd405773650fdb9dd3b7f46b788b550'
ORDER BY `created_at` DESC 
0.0001  

SELECT *
FROM (`carts`)
WHERE `cart_id` =  'ecd405773650fdb9dd3b7f46b788b550'
ORDER BY `created_at` DESC 
0.0001  

SELECT *
FROM (`carts`)
WHERE `cart_id` =  'ecd405773650fdb9dd3b7f46b788b550'
ORDER BY `created_at` DESC 
0.0001  

SELECT *
FROM (`carts`)
WHERE `cart_id` =  'ecd405773650fdb9dd3b7f46b788b550'
ORDER BY `created_at` DESC 
0.0001  

SELECT *
FROM (`carts`)
WHERE `cart_id` =  'ecd405773650fdb9dd3b7f46b788b550'
ORDER BY `created_at` DESC 
0.0002  

SELECT *
FROM (`carts`)
WHERE `cart_id` =  'ecd405773650fdb9dd3b7f46b788b550'
ORDER BY `created_at` DESC 
0.0001  

SELECT *
FROM (`carts`)
WHERE `cart_id` =  'ecd405773650fdb9dd3b7f46b788b550'
ORDER BY `created_at` DESC 
0.0002  

SELECT *
FROM (`carts`)
WHERE `cart_id` =  'ecd405773650fdb9dd3b7f46b788b550'
ORDER BY `created_at` DESC 
0.0001  

SELECT *
FROM (`carts`)
WHERE `cart_id` =  'ecd405773650fdb9dd3b7f46b788b550'
ORDER BY `created_at` DESC 
0.0001  

SELECT *
FROM (`carts`)
WHERE `cart_id` =  'ecd405773650fdb9dd3b7f46b788b550'
ORDER BY `created_at` DESC 
0.0001  

SELECT *
FROM (`carts`)
WHERE `cart_id` =  'ecd405773650fdb9dd3b7f46b788b550'
ORDER BY `created_at` DESC 
0.0002  

SELECT SQL_CALC_FOUND_ROWS cat_id
FROM (`product_categories`)
WHERE `status_id` =  'A'
AND `url_friendly` =  'designing-the-right-product-offerings'
AND `parent_id` =  1 
0.0042  

SELECT c.parent_id, c.format_id
                    FROM products AS p, products AS c
                    WHERE p.prod_id = c.parent_id AND
                        c.avail_id IN ('A','B','D') AND
                        c.type_id = 'V' AND
                        (
                            c.sku = 'designing-the-right-product-offerings' OR
                            if(c.format_id = 'Certificate', '', p.url_friendly) = 'designing-the-right-product-offerings'
                        )
                    LIMIT 1 
0.0001  

SELECT `parent_id`
FROM (`products`)
WHERE `prod_id` =  1145 
0.0002  

SELECT *
FROM (`products`)
WHERE `products`.`prod_id` =  '1145' 
0.0002  

SELECT *
FROM (`authors`)
JOIN `products__authors` ON `authors`.`author_id` = `products__authors`.`author_id`
WHERE `products__authors`.`prod_id` =  '1145'
ORDER BY `sort` ASC 
0.0001  

SELECT `cat_id`
FROM (`product_categories__products`)
WHERE `prod_id` =  '1145' 
0.0001  

SELECT *
FROM (`product_flags__products`)
WHERE `prod_id` =  '1145' 
0.0001  

SELECT `sku`
FROM (`products__xsell`)
WHERE `prod_id` =  '1145'
ORDER BY IF(position = 0, 1, 0) ASC , `position` 
0.0156  

SELECT `products`.`parent_id`
FROM (`transaction_lines`)
JOIN `products` ON `products`.`sku` = `transaction_lines`.`sku`
JOIN `product_categories__products` ON `products`.`parent_id` = `product_categories__products`.`prod_id`
WHERE `products`.`avail_id` =  'A'
AND TO_DAYS(transaction_lines.updated_at) < (TO_DAYS(NOW()) - 90)
AND `product_categories__products`.`cat_id` IN ('245') 
GROUP BY `products`.`parent_id`
ORDER BY COUNT(*) DESC
LIMIT 6 
0.0002  

SELECT `parent_id`
FROM (`products`)
WHERE `prod_id` =  '35' 
0.0003  

SELECT *
FROM (`products`)
WHERE `products`.`prod_id` =  '35' 
0.0002  

SELECT *
FROM (`authors`)
JOIN `products__authors` ON `authors`.`author_id` = `products__authors`.`author_id`
WHERE `products__authors`.`prod_id` =  '35'
ORDER BY `sort` ASC 
0.0001  

SELECT `parent_id`
FROM (`products`)
WHERE `prod_id` =  '905' 
0.0002  

SELECT *
FROM (`products`)
WHERE `products`.`prod_id` =  '905' 
0.0002  

SELECT *
FROM (`authors`)
JOIN `products__authors` ON `authors`.`author_id` = `products__authors`.`author_id`
WHERE `products__authors`.`prod_id` =  '905'
ORDER BY `sort` ASC 
0.0001  

SELECT `parent_id`
FROM (`products`)
WHERE `prod_id` =  '3959' 
0.0001  

SELECT *
FROM (`products`)
WHERE `products`.`prod_id` =  '3959' 
0.0002  

SELECT *
FROM (`authors`)
JOIN `products__authors` ON `authors`.`author_id` = `products__authors`.`author_id`
WHERE `products__authors`.`prod_id` =  '3959'
ORDER BY `sort` ASC 
0.0001  

SELECT `parent_id`
FROM (`products`)
WHERE `prod_id` =  '371' 
0.0001  

SELECT *
FROM (`products`)
WHERE `products`.`prod_id` =  '371' 
0.0002  

SELECT *
FROM (`authors`)
JOIN `products__authors` ON `authors`.`author_id` = `products__authors`.`author_id`
WHERE `products__authors`.`prod_id` =  '371'
ORDER BY `sort` ASC 
0.0001  

SELECT `parent_id`
FROM (`products`)
WHERE `prod_id` =  '3761' 
0.0001  

SELECT *
FROM (`products`)
WHERE `products`.`prod_id` =  '3761' 
0.0002  

SELECT *
FROM (`authors`)
JOIN `products__authors` ON `authors`.`author_id` = `products__authors`.`author_id`
WHERE `products__authors`.`prod_id` =  '3761'
ORDER BY `sort` ASC 
0.0001  

SELECT `parent_id`
FROM (`products`)
WHERE `prod_id` =  '1757' 
0.0001  

SELECT *
FROM (`products`)
WHERE `products`.`prod_id` =  '1757' 
0.0002  

SELECT *
FROM (`authors`)
JOIN `products__authors` ON `authors`.`author_id` = `products__authors`.`author_id`
WHERE `products__authors`.`prod_id` =  '1757'
ORDER BY `sort` ASC 
0.0004  

SELECT SQL_CALC_FOUND_ROWS media_id, position
FROM (`media`)
WHERE `foreign_key_table` =  'products'
AND `foreign_key_column` =  'prod_id'
AND `foreign_key_value` =  '1145'
AND `kind` =  'image_600x600'
ORDER BY IF(position = 0, 1, 0) ASC , `position` 
0.0001  

SELECT *
FROM (`media`)
WHERE `media`.`media_id` =  '558' 
0.0001  

SELECT *
FROM (`mime_types`)
WHERE `mime_types`.`extension` =  'jpg' 
0.0001  

SELECT *
FROM (`media_metadata`)
WHERE `media_id` =  '558' 
0.0002  

SELECT SQL_CALC_FOUND_ROWS media_id, position
FROM (`media`)
WHERE `foreign_key_table` =  'products'
AND `foreign_key_column` =  'prod_id'
AND `foreign_key_value` =  '1145'
AND `kind` =  'gallery_image'
ORDER BY IF(position = 0, 1, 0) ASC , `position` 
0.0003  

SELECT *
FROM (`products`)
WHERE `avail_id` IN ('A', 'B', 'C', 'H') 
AND `parent_id` =  '1145'
AND `type_id` =  'V'
ORDER BY IF(position = 0, 1, 0) ASC , `position`, `title` 
0.0001  

SELECT `c`.`format_id`, `c`.`price`, `c`.`sale_price`
FROM (`products` AS c)
WHERE `c`.`prod_id` =  '1146'
LIMIT 1 
0.0002  

SELECT SQL_CALC_FOUND_ROWS media_id, position
FROM (`media`)
WHERE `foreign_key_table` =  'products'
AND `foreign_key_column` =  'prod_id'
AND `foreign_key_value` =  '1146'
AND `kind` =  'thumbnail'
ORDER BY IF(position = 0, 1, 0) ASC , `position` 
0.0002  

SELECT `product_categories__products`.`cat_id`
FROM (`product_categories__products`)
JOIN `product_categories` ON `product_categories__products`.`cat_id` = `product_categories`.`cat_id`
WHERE `product_categories__products`.`prod_id` =  '1145'
AND `product_categories`.`parent_id` =  1
AND `product_categories__products`.`cat_id` NOT IN (1, 261)  
0.0004  

SELECT `cat_id` AS id, `parent_id` AS parent, `status_id`, `name`, `description`, `url_friendly`, `page_title`, `meta_keywords`, `meta_description`, `position`, `updated_at`
FROM (`product_categories`)
WHERE `cat_id` != 1
ORDER BY `parent_id`, IF(position = 0, 1, 0) ASC , `position`, `name` 
0.0004  

SELECT *
FROM (`product_categories`)
WHERE `status_id` =  'A'
AND `parent_id` =  1
AND `cat_id` NOT IN (1, 261) 
ORDER BY `name` 
0.0002  

SELECT *
FROM (`site_settings`)
WHERE `option_key` =  'announcement' 
  HTTP HEADERS  (Show)
  SESSION DATA  (Show)
  CONFIG VARIABLES  (Show)