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Garmin Needs to Keep Things Simple

SAN FRANCISCO -- For Garmin (GRMN - Get Report), the message is clear: Keep it simple.

Most experts say the maker of GPS-based navigation systems has been confusing customers, lowering buyer satisfaction and taxing the company's operations by offering 30 models of its "Nuvi" car navigation systems that range from $200 to $1,000 in price.

"I believe 30 (models) is too much," says Russell Winer, a professor of marketing at the Stern School of Business. "There's a lot of academic research that shows consumers get overwhelmed by a product having too many attributes and variations."

Garmin needs to streamline its offerings, cut down on the number of models and build in greater differentiation between the different variants, say company watchers.

"I think what they have is too much," adds George McAuliffe, portfolio manager with Tocqueville Asset Management, which holds shares of Garmin in some of its funds. "I don't understand the higher-end devices and think some of them are just too complicated."

Garmin's many offerings are far more than its largest rival, TomTom, which lists about 12 models. Its smaller competitor Mio has 11 models of its car navigation systems.

Garmin spokesperson Carly Baltes, though, says the company wants to offer numerous variants in a bid to help customers choose the one that's best for them.

"A buyer can almost customize the device they want," she says. "It is important that we offer as many SKUs (stock-keeping unit) as we can, all the way from the low end to the high end so customers can tailor the device to their preferences."
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