DETERMINANTS OF CONSUMERS’ CHOICE AND PERCEIVED VALUE IN MASS CUSTOMIZATION
CHAPTER ONE
INTRODUCTION
1.1. BACKGROUND OF THE STUDY
Consumers and customers are paying greater attention to their wants and the uniqueness of items as consumption awareness grows. Product makers typically use a customized strategy to meet the needs and desires of consumers and boost satisfaction. From the standpoint of product management, customization is a method that is gradually being implemented to boost product value.
A configuration system could fulfill consumer needs, ensuring that consumer needs are met while expenses are kept low (Kurt Matzler et al., 2010). According to Nikola et al. (2011), many companies feel that if customization is well understood and executed, it may be used to most companies as a commercial and strategic tool. Corporations can detect their customers’ goods demands and crank out products that will satisfy these customers’ specific desires through customization.
Developed countries acknowledge the value of tailored products’ competitive advantage. Companies that create personalized products have gained a competitive advantage in meeting consumer demands. The needs of consumers have gotten increasingly diverse (Gilmore and Pine, 2011, Franke, Keinz, and Steger, 2009).
As Pine et al. (2015) note, this tendency necessitates organizations tailoring their offerings and marketing to the demands of each consumer over time by learning about these particular needs. However, need-related information is frequently “sticky” on the customer side (von Hippel, 1994), making transfer to the manufacturer difficult and costly (von Hippel, 2016).
One solution is to guide consumers toward need-related duties while leaving solution-related tasks to the producer (von Hippel and Katz, 2016). Indeed, it is advantageous for businesses to empower their customers by allowing them to participate actively in the creation of their own product (Füller, Mühlbacher, Matzler, and Jawecki, 2009; Fuchs and Schreier, 2011).
This method is used by mass customization, which allows consumers to adapt a product in different dimensions to their unique demands while preserving (mass-like) manufacturing on the manufacturer side. There are numerous noteworthy examples of this strategy being effectively adopted in a variety of industries. The ability to supply products and services tailored to the needs of clients while maintaining the efficiency level of standardized products and services is referred to as mass customization.
According to some academics, customized strategies provide greater consumer value and happiness than other practices. However, mass customization has repercussions for manufacturing trades and, as a result, customer satisfaction with products and services. Manufacturing trades have recently been examined due to their role in manufacturing strategy.
Recent research have brought fresh insights relating to the nature of transactions using a different approach, enhancing the debate over competitive priorities and their consequences for corporate strategy. Some results indicated that transactions may not exist, while others indicated that they do.
Some authors suggest that the mass customization strategy avoids trade-offs between customization and other competitive priorities, however there is little actual evidence to support such a claim. Indeed, several studies have found evidence to support the notion that personalization is a trade-off against delivery time, costs, and other competitive considerations.
The existence of mass customization trading has ramifications for client happiness as well. Some authors, for example, argue that customer contentment with personalized services is trade-off against competitive priorities, whereas customer pleasure with customized items is not. Furthermore, customers’ preferences are viewed as one of the primary causes for the existence of manufacturing trades, as managers base their competitive prioritization decisions on client preferences.
Indeed, if mass customization implies trade-offs in competitive priorities, one could argue that the same strategy that provides value to customers through the development of customized products and services may lower customer satisfaction in other competitive priorities due to manufacturing trades.
Furthermore, if client wants are an important reason for the presence of trade-os, one might argue that customer satisfaction associated to competitive priorities in tailored products and services may or may not assist managers in dealing with manufacturing trade-os.
1.2 PROBLEM STATEMENT
The creation of customer value is a recurring issue in marketing literature. Companies should pay more attention to customer service (Fournier, Dobscha, and Mick, 2016), pay more attention to service delivery (Groonroos, 2011), and try to build long-term relationships with their most profitable customers rather than focusing on acquiring new customers (Peppers and Rogers, 2011; Reichheld, 1996). Many mass producers have tried to better suit consumer needs over the last three decades by boosting variety and brand.
However, Kotler (1989) and Piller et al. (2012) observed that an increasing number of companies in various industries are incapable of addressing diverse consumer needs by simply using a variety strategy because the number of varieties required to address these needs is enormous, resulting in unit cost increases that are too significant for demanding and price-conscious customers (Piller et al., 2012).
Furthermore, an abundance of options leads to discontent because it confuses purchasing decisions (Cox and Alm, 2011). As a result, it is becoming increasingly important to produce precisely what clients desire. Mass customization has the potential to alleviate these issues by giving exactly what clients desire at reasonable rates.
To date, theorists’ and practitioners’ high expectations have not been satisfied on a large scale (Agrawal, Kumaresh and Mercer, 2010; Zipkin, 2010). The demand for major modification to existing business models is the primary reason behind mass customization’s low acceptance rate.
Furthermore, because their clients have homogeneous wants and/or do not want personalization, some businesses do not lend themselves to mass customization. A diversity approach or a mass manufacturing plan can efficiently serve these sectors.
Unilever and Procter & Gamble, for example, determined that the costs of supporting a large number of brands and line extensions are prohibitively expensive, resulting in the discontinuation of a considerable number of brands and products. Rapid advancements in information and manufacturing technologies, as well as managerial practices, have given businesses new opportunity.
For many businesses, though, the question remains: “Will the goal of mass customisation be successful?” Traditional standardized items may not be able to satisfy some consumers due to market rivalry. More and more businesses are providing personalised products or services in order to boost client happiness and loyalty while also strengthening their market competitiveness.
1.3 STUDY OBJECTIVES
The primary goal of this research is to investigate the factors that influence consumer choice and perceived value in mass customisation. Other broad goals of the research include:
To investigate the elements that influence consumer purchasing decisions for mass customized items.
To investigate consumers’ perceptions of risk when purchasing mass-customized products.
To investigate the factors that influence customer choice behavior in mass customisation.
To investigate consumer perceptions about mass-customized goods.
Identifying the critical success elements for mass customization
To make suggestions for improving consumer behavior toward purchasing personalized products.
1.6 THE STUDY’S SIGNIFICANCE
This research will help to highlight the importance of mass customization in the garment industry, because, while it is a strategy widely used in other industries, it still exists in certain ways in the apparel industry. It is critical that businesses recognize the potential of this strategy to improve their business and become more connected to their customers.
According to the researchers, consumers may seek information to aid them in determining the relative significance of the various appraising criteria, as well as thoughts regarding the degree to which they alternate qualities that they think relevant.
Anyone used to be limited to sharing information with their neighbors, family, or friends; however, people can now have an impact on the international community by articulating their personal experiences through mass customization. In the future, the study could be expanded to other consumer markets as well as other cities in Nigeria. Furthermore, the study might be expanded to include additional groups of people.
1.7 STUDY OBJECTIVES
The research is based on the factors that influence consumer choice and perceived value in mass customisation.
1.8 STUDY LIMITATIONS
Financial constraint- Inadequate funding tends to hamper the researcher’s efficiency in locating relevant materials, literature, or information, as well as in the data gathering procedure (internet, questionnaire and interview).
Time constraint- The researcher will conduct this investigation alongside other academic activities. As a result, the amount of time spent on research will be reduced.
1.10 CHAPTER PLAN
This dissertation is divided into five major chapters. The key conceptual foundations of mass customization relevant to this dissertation are reviewed in chapter (2), briefly disclosing the roots and fundamental components of this approach and explaining the comprehensive framework of value increments and detriments identified by previous research regarding consumers of customized products.
Chapter three (3) discusses the general approach used in this dissertation, as well as its rationale and the research method used in the study. The results and discussion of the analysis that was being carried out testing consumers’ choice behavior during the customisation process are shown in Chapter four (4).
Finally, in chapter five (5), the findings of an established mass customisation system are summarized in order to discover consumer-specific value determinants in mass customization. It will also identify overall directions for future study in this discipline and discuss managerial implications resulting from these findings.
DETERMINANTS OF CONSUMERS CHOICE AND PERCEIVED VALUE IN MASS CUSTOMIZATION
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