Customization is simply the adaptation of goods and services according to individual consumer needs. It is the tailoring of the offerings of a company to provide multiple choices and variety in such a way that every consumer finds exactly what they are looking for. Customization is not the same as product variety, neither is it the same as personalization. Creating customized goods from the existing product portfolio is different from launching multiple or seasonal product designs. Also, customization is different from personalization. While personalization involves the adaptation of either existing or yet-to-be-produced goods to particular individual demands, such as name inscription on products or bespoke goods commission; customization involves goods adaptation that can be done en masse. Personalization is, however, a part of the customization process.
Mass customization is the production and sale of highly individual products and services on a bulk scale, to a mass market. In other words, it is the provision of customized products and services to every consumer who desires so. It involves using mass production techniques and economies of scale processes to manufacture a larger variety of products at lower costs and capture more personal style needs of customers. Writer and notable proponent of mass customization, B. Joseph Pine calls this 'Economies of Scope' in his book, Mass Customization: The New Frontier in Business Competition. Economies of scope involve companies saving money on a wide range of possibilities in products and services offerings, in the same way that mass production saves costs through economies of scale.
Although it might seem that customization cannot be applied to a mass market and at a similar low cost level as mass production, it is possible for companies, including luxury brands, to achieve the benefits associated with mass production through applying mass customization techniques. This can be done through resource sharing and allocation on standard components, which can further be utilized to create variety in the end product.
Customization works on three levels. First, a wide variety of product designs, styles, colours and materials that appeal to a broad taste level should be available to the consumer public. Secondly, this range of goods should be easily modified and adapted according to specific consumer requirements such as providing multiple leather and hardware choices for a particular leather goods range. Thirdly, customers should also be able to add personalized features to their chosen products such as their names or short messages on specific product parts. These services or features could be provided at either no cost or with an additional small fee. This is one of the ways to guarantee that the customer receives the optimum satisfaction, which should be the target of luxury brands.
A simple illustration of customized versus standardized service is the customer services letter that often accompanies the delivery of ordered luxury products. I once made an order from a major luxury brand which arrived two weeks late, accompanied by a letter of appreciation from the Customer Services Manager. The letter was obviously a standard letter that is sent to all customers addressing them as 'Dear Customer', instead of with the customer's name as would be expected from a luxury brand. Had this letter addressed me as 'Dear Uche', instead of 'Dear Customer', it could have been elevated from the status of 'toneless' and 'drab' to appreciation for recognizing me as a valuable customer. This simple action would have incurred the brand no additional costs in terms of time, paper and ink. This attitude of customer generalization is prevalent among several luxury brands, despite the availability of advanced business systems that aid customization.
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