DETERMINANTS OF CONSUMERS CHOICE AND PERCEIVED VALUE IN MASS CUSTOMIZATION
CHAPTER ONE
INTRODUCTION
1.1. BACKGROUND OF THE STUDY
With increasing consumption awareness, consumers and customers are now paying more attention to their needs and the uniqueness of
products. In order to satisfy the needs and wants of consumers and increase satisfaction, manufacturers of products tend to adopt a
customized strategy. From the product management viewpoint, customization is a strategy that is being applied gradually to increase
product value. A configuration system could meet the consumer needs, ensuring that consumer needs can be satisfied and that costs are
maintained at the same time (Kurt Matzler et al., 2010). Nikola et al. (2011) pointed out that many companies believe that if customization
could be appropriately understood and executed, a commercial and strategic mechanism can be applied to most companies. Through
customization, corporations may notice the merchandise desires of their consumers and will turn out those merchandise that may satisfy
the individual desires of these consumers. The importance of customized products’ competitive edge is also being recognized by developed
countries. Companies producing customized products have gained a competitive edge to realize consumer needs. Consumers’ needs have
become increasingly diverse (Gilmore and Pine, 2011, Franke, Keinz, and Steger, 2009). As the statement of Pine et al. (2015) indicates, this
trend requires companies to adjust their offering and marketing to the needs of each consumer by learning about these individual needs
over time. However, need-related information is often “sticky” on the consumer side (von Hippel, 1994), making it difficult and costly to
transfer to the manufacturer (von Hippel, 2016). A solution is to direct consumers themselves towards fulfilling need-related tasks while
leaving solution-related tasks with the manufacturer (von Hippel and Katz, 2016). Indeed, it is beneficial for companies to empower their
customers by giving them an active role as co-creators of their own product (Füller, Mühlbacher, Matzler, and Jawecki, 2009, Fuchs and
Schreier, 2011). Mass customization utilizes this strategy by enabling consumers to adapt a product in different dimensions to their specific
needs while retaining (mass like) production on the manufacturer side. There are many prominent examples across numerous industries
that have successfully implemented this approach. Mass customization strategy is the ability to provide products and services according to
customers’ needs with the comparable efficiency level of standardized products and services. According to some scholars, customization
practices offer superior customer value and satisfaction compared to other practices. However, the adoption of mass customization has
implications for manufacturing trades and, hence, for customer satisfaction with products and services. The manufacturing trades
have been studied in recent years due to their importance for manufacturing strategy. Using a different approach, recent studies have
brought new insights related to the nature of trades, increasing the debate about competitive priorities and their implications for firm’s
strategy. Some results have shown a possible nonexistence of trades while other results have shown their existence. In the case of mass
customization strategy, some authors claim this strategy eliminates the trades between customization and other competitive priorities,
but there is little empirical evidence supporting such proposition. Indeed, there are some studies that have shown evidence to support the
proposition that customization is trade-o against delivery time, costs, and other competitive priorities. The existence of trades in mass
customization also has implications for customer satisfaction. For example, some authors aim that customer satisfaction associated with
customized services is trade-o against competitive priorities, while customer satisfaction with customized goods is not trade-o against
competitive priorities. Moreover, customers’ preferences are perceived as one of the main reasons for the existence of manufacturing trades since managers based their decisions regarding competitive priorities on customers’ preferences. In fact, if mass customization implies
trade-os in competitive priorities, it is possible to argue that the same strategy that adds value to customers through development of
customized products and services may reduce customer satisfaction related to some competitive priorities because of manufacturing trades. Furthermore, if the customers’ needs are an important reason for the existence of trade-os, it is possible to argue that the customer
satisfaction related to competitive priorities in customized products and services may or may not help managers to deal with
manufacturing trade-os.
1.2 STATEMENT OF PROBLEM
The development of customer value is a prevailing theme in the marketing literature. Companies should listen more carefully to their
customers (Fournier, Dobscha and Mick, 2016), pay more attention to delivering services (Groonroos, 2011), and try to build lasting
relationships with their most profitable customers instead of focusing on acquiring new customers (Peppers and Rogers, 2011; Reichheld,
1996). In the last three decades, many mass producers have tried to better meet consumer needs by increasing variety and brands.
However, Kotler (1989) and Piller et al. (2012) noted that an increasing number of companies within various industries are incapable of
addressing diverse consumer needs by merely using a variety strategy because the number of varieties required to address these needs is
enormous and results in unit cost increases that are too substantial for demanding and price-conscious customers (Piller et al., 2012). In
addition, excessive availability of choice also results in frustration as it complicates buying decisions (Cox and Alm, 2011). Therefore, it is
becoming necessary to produce exactly what customers want. Mass customization has the potential to solve these problems, by delivering
to customers exactly what they want, at reasonable prices. To date, the high expectations of theorists and practitioners have not yet been
met on a large scale (Agrawal, Kumaresh and Mercer, 2010; Zipkin, 2010). The primary reason for the low adoption rate of mass
customization is the requirement for significant change to existing business models. Furthermore, some industries do not lend themselves
to mass customization because their customers have homogeneous needs, and/or do not want customization. These industries can be
served effectively with a variety strategy or a mass production strategy. For example, Unilever and Procter & Gamble concluded that the
costs of supporting a large number of brands and line extensions are prohibitive, resulting in the elimination of a significant number of
brands and products. Rapid advances in information and manufacturing technology and management methods have provided companies
with unprecedented opportunities. But for many companies the question remains: ‘‘will the pursuit of mass customization be
successful?’’With fierce competition in the market, traditional standardized products may not be able to satisfy some consumers. In order to
increase satisfaction and loyalty of consumers and strengthen their competitive edge in the market, more and more companies provide
customized products or services.
1.3 AIMS OF THE STUDY
The major purpose of this study is to examine the determinants of consumer’s choice and perceived value in mass customization. Other
general objectives of the study are:
- To examine the factors that influence consumer’s choice purchase of mass customized products.
- To examine the perceived risk of consumers in buying mass customized products
- To examine the determinants of consumers’ choice behavior in mass customization
- To examine the consumer attitudes towards mass customized products
- To identify the key success factors of mass customization
- To recommend ways of enhancing consumers behavior towards buying customized products.
1.6 SIGNIFICANCE OF THE STUDY
This research work will contribute to underline the importance of mass customization in the apparel sector, because besides being a
strategy largely applied in other industries, in the apparel industry some regards still exist. Is important that companies realize the potential
of this strategy to improve their business and become closer to their customers. It has been suggested by the researchers that the
consumers might look for information assisting them in deciding the relative significance of the several appraising criteria, and might
further seek concepts regarding the degree to which they alternate features that they consider significant. People in the past were confined
to sharing information with their neighbors, family or friends; however, now people are able to impact the international community by
articulating their personal experiences on the mass customization. In future, the study can be carried out to the other areas of consumer
markets and also to other cities of Nigeria. Additionally the study could also be extended to other group of people.
1.7 SCOPE OF THE STUDY
The study is based on the determinants of consumer’s choice and perceived value in mass customization.
1.8 LIMITATION OF STUDY
Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or
information and in the process of data collection (internet, questionnaire and interview).
Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on
the time devoted for the research work.
1.10 CHAPTER SCHEME
This dissertation consists of five main chapters. In chapter (2), the key conceptual foundations of mass customization that are relevant to
this dissertation are being reviewed with briefly disclosing the roots and fundamental components of this approach and explaining the
comprehensive framework of value increments and detriments that have been identified by past research regarding consumers of
customized products. Chapter three (3) includes the general method employed in this dissertation as well as its rationale and the research
method that is being used in the research. Chapter four (4) shows the results and discussion of the analysis that was being carried out
testing consumers’ choice behavior during the customization process. Finally, in chapter five (5), summarizes the findings of an established
mass customization system in order to identify consumer-specific determinants of value in mass customization. It will also provide
managerial implications derived from these findings and highlight overarching directions for future research in this field
DETERMINANTS OF CONSUMERS CHOICE AND PERCEIVED VALUE IN MASS CUSTOMIZATION
