Mass Customization is the customization and personalization of products and services for individual customers at a mass production price. Thus it means meeting each customer's individual wants and needs exactly, but at prices comparable to those of standard mass produced goods. The concept was first conceived by Stan Davis in Future Perfect. It was then further developed by Joseph Pine in his book Mass Customization - The New Frontier in Business Competition.
Traditionally customization and low cost have been mutually exclusive. Mass production provided low cost but at the expense of uniformity. Customization was the product of designers and craftsman. Its expense generally made it the preserve of the rich. To-day, new interactive technologies, like the Internet, allow customers to interact with a company and specify their unique requirements which are then manufactured by automated systems.
Why Do we Need Mass Customization:
The reasons of using Mass Customization instead of Mass Production can be identified as an adaptive behavior of the business. As the consumer preferences are ever changing, and are becoming more diverse and unpredictable, gaining advantages among competitors need to be achieved by acknowledging customer needs and reacting accordingly.
- People are more unpredictable and diverse-minded; they refused to be considered see as collective groups but as individual person. To approach the goal, customer requires more unique products to exhibit their distinctness and uniqueness.
- By providing successful customized products to customers, companies can shift the focus of their buyers from how much they are to pay to how much benefit they can get.
- Since manufacturers make products after receiving orders, the risk of over-producing an item that no one need and stocking it in the inventory are reduced.
- Companies create a close relationship with their suppliers, distributors and customers when the customers return again and again, sending their unique orders. Also, satisfied customers will provide excellent references and referrals.
Business Strategies Supporting Mass Customization
Mass Customization can be used to support different business strategies.
Customization is the norm
Customers are given the opportunity to configure their product. This has been a common strategy in the furniture sector (e.g. sofas). Some customers may select a recommended version and the company may speculate by stocking popular configurations, but the underlying strategy is to offer every customer a choice.
Customization for premium products and brand building
The principle underlying this strategy is that customers are willing to pay more for a product that satisfies them more. Compared to (lower priced) standard products, the customizable product can have the potential for greater satisfaction by: having a better physical fit; a bigger choice of functions; more attractive styling options, and so on.
It is not only the customizable attributes of the priced) standard products, the customizable product can have the potential for greater satisfaction by: having a better physical fit; a bigger choice of functions; more attractive styling options, and so on.
It is not only the customizable attributes of the product that give it its premium status, but also the buying experience. A customer can be engaged in the buying process for a considerable time and a well-designed experience enhances the brand. As an example Adidas is using this model to customize its offer.
Customization for market intelligence
A benefit of allowing customers to configure their product is that the company can find out not only how customers are reacting but learn from them. Rather than pay for market research, why not allow customers to customize their products and thereby tell you what trends are finding favors and what innovations they would like to see in your products?