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Study: Suppliers Need to Narrow Options

Published January 4, 2008

MONTGOMERYVILLE, PA (BRAIN)—Bicycle manufacturers are creating confusion at retail by flooding the market with too many choices. The result is reduced product sales—and profits—industry-wide.

“Consumers find variety overwhelming, particularly when there is lack of differentiation,” said Nicole DeHoratius, an adjunct assistant professor at the University of Chicago who teaches about supply chain management. “Too much variety leads people to make no choice.”

The BPSA commissioned DeHoratius and Robbie Kellman Baxter, president of strategic marketing consultancy Peninsula Strategies, to find out why industry sales have been stagnant despite many opportunities for growth.

“We were mandated to look at all the research that already has been done, synthesize this and tell the BPSA why bicycle sales are flat,” DeHoratius said, adding that they also looked at other industries that face a declining market.

They found companies need to modify their product portfolio and design processes to create fewer models that are more differentiated. In particular, suppliers need to identify and target the many types of people buying a bike.

The research team will present these and other recommendations at the BPSA Bicycle Leadership Conference in San Diego, Jan. 18-20. For more information about the conference, visit www.bicycleconference.org.

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