Answer to Question #168179 in Marketing for Sunny

Question #168179


Expert's answer

The concept of mass customization is about a production process that involves mass production techniques for the mass market. However, the key here is that the customization elements enables the output to be tailored to a larger or lesser extent based on the specific requirements of the customer. So where did it all start? It is often said that Levi-sStrauss with its original spin firm was perhaps the first, certainly one of the best known examples of mass customization. 20 years ago, they run that for five or six years and then close it down but then relaunched mass customization having learned the marketing lessons. In the sports market Nike have been a leader in mass customization for almost 20 years. That is, consumers design how their product looks like, Nike then makes it to that exact specification and then keep you informed as your personalized products goes through the production process. The key to understanding this concept is that you are combining the benefits of mass production and economies of scale, therefore low unit costs with a product that has of personalization and therefore potentially much greater value added from the customer point of view. If you look at companies like Uber who run more taxis than anyone else in the world but do not own any taxis, companies like AirBnB that have more accommodation than anyone else in the world but do not own any property. Thus, the line between real and actual is becoming blurred and that is the disruption of the market. From this point of view, the perceived value is high and therefore you may be helped to charge a premium price for the customization options that are provided you may not but certainly the added value is strong. Clearly, if you do mass customization right and well and consistently well it is a way of differentiating your offer from other mass-market producers because it's not easy to do well and do it well.

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