Mass Customization is More Viable to Create a Profitable Brand Than Mass Marketing

Synopsis

Mass Customization is a marketing technique which operates in a combination of customization of products in accordance with segment needs, as well as the production flexibility and lower costs through economies of scale achieved from mass producing for that segment.

Mass Customization

Introduction

Marketing, in any organization forms one of the key pillars of strategic objectives. Marketing converges the strategic direction as well as the objectives of the organization, ensuring that the organizational objectives are achieved. Different business organizations can take different approaches to their marketing strategy. One of these modes is mass customization. This is a marketing technique which operates in a combination of customization of products in accordance with segment needs, as well as the production flexibility and lower costs through economies of scale achieved from mass producing for that segment. Mass customization combines the two ideas (flexibility and customization of products) with the costs per unit that are associated with mass production of items. This marketing technique is also known as made-to-order or built-to order. Dell computers are a perfect example of this method. Dell produces a basic version of computers which is same across virtually all of its customer segments; but there are various versions of each module (screen, speakers, input devices, power cables) suited for different segments such as businesses or individuals. Another technique is mass marketing, which is a marketing strategy where an organization decides to ignore segment differences and appeals to the whole market with one common offer. This supports the idea of broader message reach and broadcasting which will reach the largest number of people as possible.

Each of these strategies have their own merits and demerits. However, diverging needs among smaller and smaller segments of customers (niche), attributable, in the most part, to internet and communication media mean that mass customization marketing grounds my position in this argumentative research. According to Joseph & Pine (1993), mass customization offers vast advantages such as proximity with customer, customer involvement into the overall value creation and consumption process, positive customer attitudes, and increases willingness to pay. The fact that goods are built to order gives this strategy an upper hand in many dynamics. More of these details add strengthening my position with evidence and facts are found within the essay.

 Argument

Currently, consumer markets are seen to be changing rapidly due to advances in communication and transportation technology, and the end consumers are much more demanding than before. Due to this reason, mass customization has come up in the last decade as a solution addressing the new market realities and helping different firms to grab the efficiency merits of mass production, customers satisfaction advantages of customization. Relative to mass production and mass marketing to mass customization has superior benefits. Mass customization allows the following:

Positive Customer Attitudes

Mass customization can help organizations build a profitable brand by affecting several customer attitudes. Some of these positive changes may include increase loyalty, increase in brand’s share, and hence profits.  Mass customization builds brand loyalty (Yoo & Park, 2016) and increases brand share(Jiao, et al., 2003). This effect has been widely seen in the luxury and high-end products. Customization has been found to increase perceived service quality, which in turn has been found to drive purchase intention. One study found that customization increases customer satisfaction, trust, and as result, customer loyalty (Coelho & Henseler, 2012).

Increases Willingness to Pay

Because customers are willing to pay more for the products that satisfy their unique needs (Kuo & Carnage, 2012), mass customization allows organizations to charge premiums for their products and increase margins, and hence build a profitable brand. Willingness to pay is considered as an outcome of competitive advantage from a strategic point of view. Thus, it can be said that customization can build a competitive advantage.

Provides customers an ego-gratification

This strategy adds to the customer’s value by satisfying the ego-gratification need (Pine, et al., 1999). Ego gratification is defined as a feeling that customers get from consuming products specifically tailored to their unique needs. That ego boast results in enhanced loyalty and price premiums. Moreover, such a relation between customers and the brand which is based on emotions is an attachment desirable for customer based brand equity.

Aids Recall

Carefully devised customization which is centered around customer needs has benefit of triggering sales by reminding customers of the company’s brand when they find products best fit for their needs. Customized advertising on social media is one example of this effect. This helps companies to support sales by aided recall when their way of customization reminds customers of their brand in purchase situations. Transparent customization for example also eliminates the time customers need to spend finding accurate products, creating, or reviewing orders (Gilmore & Pine, 1997).

Provides a chance to create proximity with the customer

Under customization, every transaction adds more details of coordination between the customer and the company thorough  client-specific product design and is pegged on a direct communication between the company and the customer. During this interaction, the supplier’s solution capabilities are usually converted into a unique customer order by the usage of enough tools of configuration. According to Zipkin (2001), this process can be referred to as elicitation of mass customization system. The supplier has to have some kind of interaction with the customer so as to enable them to obtain unique information in order to bring about definition of the product and also translate the needs of the customers into a definite product specification. This process of elicitation is in many instances more than the mere exchange of details but also an exact act of joint co-creation and cooperation (Joseph & Pine, 1993).

Increases customer involvement

Elicitation process just explained necessitates integration of customers into the design and production phases of customers. Customer integration results in value creation process in which customers take a play in all the processes and activities which were used to be seen as the companies’ domain. The customer is converted into a co-producer as well as a prosumer. The end result of all this is a co-creation which means that there is company-customer interaction and also ensures adaptation for the sole reason of achieving increased value for both the customer and the company—supplier (Joseph & Pine, 1993).

According to Kotler, et al. (2005), mass customization is a reflection of a growing trend of self-marketing. Self-marketing is a shift in the approach of product development and marketing communication from a one-monologue from companies to the customers to a more interactive process where customers are creators of the products. They increasingly use the internet to influence all aspects of marketing from design and development to final presentation of the products to the customers.

Many companies are now choosing to tailor their offerings to individual customers on a mass scale. This shift is reducing the time companies spend understanding consumer and the time customers spend finding, evaluating, and choosing from different alternatives. Cocreators also tend to be more satisfied with the products and services they settle for.

Conclusion

So, we have reviewed significant amount of literature and looked at several practical examples for evidence on why mass customization is superior to mass marketing in the modern era. Specifically, we argued that mass customization increases integration of customers into all stages of value creation, it positively affects customer satisfaction, loyalty, and trust. These attitudes in turn affect purchase intentions such as willingness to pay. Through customization companies can increase profits by charging premiums for their offerings, attracting more customers, and reducing costs of production. We now look into some specific recommendations on how to make mass customization work.

Recommendations

First, different segments to which company is to deliver need to be defined clearly in terms of their needs. This sets the objective for customization and helps companies visualize the end value for the consumer. Similarly, the product tailored at the defined segment needs to be defined clearly so that the processes of value creation can be visualized.

Second, rapid response is the first characteristic of effective mass customization. Processes involved in value creation for customer must be so designed to be rapidly linked together. Coordination of processes such as marketing and production is essential to deliver customized value.

Third, the costs of moving across different versions of a product should be reduced to minimum. Otherwise the increased costs of customization would erode its benefits. This is related more to production processes and modular design.

Fourth, a seamless value to each segment should be guaranteed; customization sometimes creates seams which interrupt how consumers extract their value from the product.

Finally, technology needs to be leveraged in this regard. Amazon is classic example of deploying computers to understand better each customer and then recommend products tailored to their specific needs by maintaining cookies and other customer records. Almost every modern business is doing this, but not with the same precision as does Amazon.