A useful range lets distinct segments self-select.
A useful range lets distinct segments self-select. A product that duplicates a use case, shifts sales from a neighbouring offer and consumes forecasting, inventory, sales or support effort can destroy value despite a positive unit margin. Assess portfolio contribution after migration and avoidable complexity, not standalone sales.
Decision.
Keep, merge or withdraw an item according to its genuinely incremental contribution and the choice value it adds. Map each item to a segment, job, service level and observable reason to choose it. Rebuild net price, variable and channel costs, service and avoidable complexity on a common horizon. Then distinguish transferred sales, competitive losses and abandoned demand before testing the target range.
Worked example.
Two tail items generate €96k contribution and €140k avoidable complexity. Three retained offers recover €68k of contribution: €140k + €68k − €96k = +€112k. Withdrawal is favourable only if retained offers absorb volume without damaging service or price; validate migration through a regional pilot.
Checks and limits.
Each item needs a distinct, observable reason for choice; retained complexity costs must actually disappear; and the target range must still cover priority segments. Historical data can understate a poorly available item, removal can increase distributor or factory dependency, and a short pilot may miss loyalty and reference-price effects.
Resources and sources.
Download the range rationalisation model. Related: measure internal transfers, rebuild offer levels, check product–price coherence. Sources: Quelch & Kenny (1994), *Extend Profits, Not Product Lines*; Kekre & Srinivasan (1990), *Broader Product Line*; Lancaster (1990), *The Economics of Product Variety*.