Mass Customization

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Harvard Business Review article, by the author of Experience Economy

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Mass Customization

  1. 1. Mass Customization <ul><li>Original Work: </li></ul><ul><li>The Four Faces of Customization by James H. Gilmore and B. Joseph Pine II, Harvard Business Review, January-February 1997 </li></ul><ul><li>Mass Customization Website </li></ul>
  2. 2. What is Mass Customization <ul><li>producing goods and services to meet individual customer's needs with near mass production efficiency </li></ul>
  3. 3. Features of Mass Customization <ul><li>Customer co-design </li></ul><ul><li>Meeting the needs of each individual customer </li></ul><ul><li>Stable solution space </li></ul><ul><li>Adequate price and cost level </li></ul>
  4. 4. Customer co-design <ul><li>Customers are integrated into value creation by defining, configuring, matching, or modifying an individual solution </li></ul><ul><li>Different to a do-it-yourself (DIY) setting, co-design activities are performed in an act of company-to-customer interaction and cooperation. </li></ul><ul><li>offers possibilities for building up a lasting relationship </li></ul>
  5. 5. Meeting the needs of each individual customer <ul><li>is a differentiation strategy </li></ul><ul><li>increment of utility of a good: </li></ul><ul><li>The larger the heterogeneity of all customers' preferences, the larger is this gain in utility. </li></ul>
  6. 6. Stable solution space <ul><li>The space within which a mass customization offering is able to satisfy a customer's need is finite, but still flexible and responsive. </li></ul><ul><li>A traditional (craft) customizer re-invents not only its products but also its processes for each individual customer. But a mass customizer uses stable processes to deliver high variety goods. </li></ul>
  7. 7. Adequate price and cost level <ul><li>still targeting the same market segment that was purchasing the standard goods before, different from craft customization </li></ul>
  8. 8. The Four Faces of Customization <ul><li>Collaborative </li></ul><ul><li>Adaptive </li></ul><ul><li>Cosmetic </li></ul><ul><li>Transparent </li></ul>
  9. 9. Collaborative Customization <ul><li>Conduct a dialogue with individual customers </li></ul><ul><li>For business whose customers cannot articulate what they want, or </li></ul><ul><li>Paris Miki </li></ul><ul><li>are being frustrated when forced to select from a plethora of options </li></ul>
  10. 10. Adaptive Customization <ul><li>Offer one standard but customizable product and users can alter it </li></ul><ul><li>For business whose customers want the product to perform in different ways on different occasions </li></ul><ul><li>Lutron Electronics </li></ul>
  11. 11. Cosmetic Customization <ul><li>standard product presented differently for different customers </li></ul><ul><li>Personalized presentation </li></ul><ul><li>Springle or other treats: bite size, travel size, resealable, customized for super markets </li></ul>
  12. 12. Transparent customization <ul><li>Customized, but unknown to customers </li></ul><ul><li>Customer needs are predictable or deducible, but they do not want to be interfered or repeat their needs. </li></ul>
  13. 13. Taxonomy

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