The Limits of Mass Customization
Is mass customization really the best way to deliver variety to consumers? Managers understand how critical variety is to adding value to their product offerings. And mass customization has been touted as the premier way of achieving that goal. But there are several ways to deliver variety, and mass customization may not always be the best.
Mass customization is the capability, realized by a few companies, to offer individually tailored products or services on a large scale. Levi Strauss, for instance, sells custom-fitted jeans. Andersen Windows can build a window to fit any house. Consumers can get their names printed or sewn or embossed on just about anything. And personalized information services for everything from financial planning to travel guidance proliferate on the Web.
The phrase “mass customization” is striking, for it seems a contradiction in terms. Mass production implies uniform products, whereas customization connotes small-scale crafts. (See “Mass Customization vs. Mass Production.”) Combining the best of both promises exciting choices for consumers and new opportunities for businesses.
1. Even those conditions are not sufficient for success. Reichwald et al. discuss the demise of Custom Foot, whose business model seemed promising. See R. Reichwald, F. Piller and K. Möslein, “Information as a Critical Success Factor for Mass Customization, or Why Even a Customized Shoe Does Not Always Fit” (paper presented at ASAC-IFSAM Conference, Montréal, July 10, 2000).
2. For an alternative depiction of mass customization, ibid.
3. S. Shugan, “The Cost of Thinking,” Journal of Consumer Research 7 (September 1980): 99–111; and C. Huffman and B. Kahn, “Variety for Sale: Mass Customization or Mass Confusion?” Journal of Retailing 74, no. 4 (1998): 491–513.
4. Gilmore and Pine call that “cosmetic” customization. J. Gilmore and B.J. Pine, “The Four Faces of Mass Customization,” Harvard Business Review 75 (January–February 1997): 91–101.
5. “Database Marketing,” Business Week, Sept. 5, 1994, 56–62;
D. Peppers and M. Rogers, “Enterprise One to One” (New York: Doubleday, 1997); and S. Brown, “Customer Relationship Management” (New York: Wiley, 2000).
6. “Custom-Made, Direct from the Plant,” Business Week Special Issue: 21st Century Capitalism, 1994, 158–160.
7. “Distribution Dilemmas,” The Economist, Feb. 26, 2000, 27–38.
8. M. Tseng, J. Jiao and C. Su, “Virtual Prototyping for Customized Product Development,” Integrated Manufacturing Systems 9, no. 6 (1998): 334–343.
9. K. Ulrich, T. Randall, M. Fisher and D. Reibstein, “Managing Product Variety,” in “Product Variety Management: Research Advances,” eds. T. Ho and C. Tang (Dordrecht, Netherlands: Kluwer, 1998), 177–205.
10. S. Kotha, “From Mass Production to Mass Customization: The Case of the National Industrial Bicycle Company of Japan,” European Journal of Management 14, no. 5 (1996), 442–450.
11. “Sweatshops to Body Scans,” The Economist, April 29, 2000, 60–61.
12. The limited research on demand for variety gives no clear indication whether such demand is increasing. See for example, B. Kahn, “Variety: From the Consumer’s Perspective,” in “Product Variety Management: Research Advances,” eds. T. Ho and C. Tang (Dordrecht, Netherlands: Kluwer, 1998), 19–37.
Readers interested in learning more about mass customization will enjoy J. Gilmore and B.J. Pine’s book “Markets of One: Creating Customer-Unique Value Through Mass Customization,” published in 2000. B.J. Pine and colleagues’ Harvard Business Review article “Making Mass Customization Work,” from September–October 1993, also is recommended. Another helpful article is S. Kotha’s 1995 Strategic Management Journal article “Mass Customization: Implementing the Emerging Paradigm for Competitive Advantage.” A good Web site is www.mass-customization.de.