Mass Customisation and Personalisation - Coursework Example

Mass Customization and Personalization By Human Resource Management of Introduction Mass customization simply refers to the presentation of goods to the general consumer public in a format that is very much focused on addressing their needs. Similarly, personalization refers to the same practice of modifying goods in such a manner that they appeal and fit with the general desire of the individuals. These two systems coupled are meant to ensure customer satisfaction and are usually a way by which the various companies and businesses compete to exert their prowess as sellers of certain products and services. Two decades in the past from now, the concept of Mass Customization and personalization had been understood and categorized as the new face of business competition. Since this conceptualization of this topic, researchers, consultants, academics and businessleaders have very much delved into developing strategies that can be used to establish this practice as a standard platform for use in most businessareas. This is to create a standard and fair platform of knowledge that can be implemented for the successful competition of the various companies and parties involved in the market. There have been a lot of workshops and conferences arranged internationally to address these issue, as aglobal factor.Currently there is more than enough knowledge circulating among the various outlets of business marketing and advertisements. The onset of the digital platform, which uses the internet as the medium of propagation, has really been a boost for the implementation and adoption of this knowledge of business. The baby boomer generation played a very important role as a means of propagating the growing knowledge into the developing business enterprises at the time. In the recent days, it is very common to see almost everyone utilize the marketing platforms and facilities as a way to reach the mass. However, the need for presentation of customized goods and services to the consumers has grown. This is attributed to the current increase in the level of education among various people. In this research, market segmentation is emphasized as the main theme to describe the concept of mass customization and personalization. Definition Analysis The main idea behind mass customization and personalization is to use the differences of the people as one way of turning the customer’sheterogeneous needs into a competitive advantage for business. Taking it from ones point of view, it can be discerned from real life experiences that the more personal things you possess are the more they fit you and hence therefore the smarter you look with them. Doing things in a smart fashion is quite a way to be very much competitive albeit it requires a lot of involvement and hence a lot of work. Personalization has a lot to do with using technology as a means to accommodate the various differences that various market niches in terms of individuals possess. When this idea is implemented in the right manner, usually both the two parties are bound to benefit. The customer is served with services or goods that address their personal needs. Similarly, the seller gains a competitive advantage over other competitors by getting the market to sell their goods. According to (Piller et al, 2009), mass customization can be defined as a scenario when a large number of customers of the same category can be reached simultaneously for instance in the mass markets of an industrial economy hence can be treated as individual entities in the setting of customized markets of preindustrial economies. It can therefore be said that personalization is implemented by the use of mass customization. Further definition of this idea can be derived from the definition by (Herd, 2001) who both claims a pragmatic definition of customization as corresponding to the technologies and systems that are used to deliver goods and services well designed to meet the needs of the customers with a near mass production efficiency. This is the ultimate application of customization in the digital world where technology is the order of the day. From the definition of mass customization, it is important to note that these definitions of mass customization can be supplemented by the fact that they do not carry price premiums that were associated to them by the traditional crafting customization. The fact that the customers find it still fine for them to pay a premium price for their various goods means that they are just but an increment of their utility. It is therefore not very wise to include the price propositions as part of the definition of the concept of mass customization. Moreover, mass customization generally does not demand that the lot sizes be restricted to just but one. It is possible that custom products can be produced for a single customer just as one. There is also no one-way to customize or personalize goods; looking at the automobile industry, the various different models of cars come with various forms by which they are customized. These represent the various ways that they form part of the customized market. To maintain a rather competitive market, creativity at its maximum has to be used to design ways by which the various businesses can out smart each other. These companies involved in designing how modern cars look like factor in a lot of customization and personalization, a concept that has come to evolve as the determinant factor in the type of company the vehicles are made from. The Product Platform Strategy for mass customization and personalization in product development The drive from customers evolving expectations, the need for personalized products as well as the diverse demands that the various markets have create the need for implementation of strategies that enable mass customization and personalization. High costs are often incurred by companies because of the processes they have to go through from designing to the overall implementation of the products in the market. To add up to these challenges, there is need to mitigate the variety of products that they are able to provide into the market to avoid confusion among the customers. Once the customers have many product varieties to choose from, then they have to use a lot of effort and research to be able to come up with the right choice. One of the strategies used is the use of the product platforms, which is elementally described as a set of interfaces, and subsystems, which form a relatively common structure from which a stream of derivative products, which form a set known as a product family, can be effectively produced and developed. This product family shares a lot of common technology that directly influences its related market applications. Such tools include the set of power tools defined by Black and Decker. Using such tools help in cutting down the costs associated with these products as well as the complexity of these products. The essence of utilizing the product family is that a product created has its various components as similar products that can apply in different bigger products of the company. This reduces the design and manufacturing cost of the product. This strategy is usually guided by the use of external variety maximization while at the same time minimizing the internal variety. This is commonly used when designing products whose bodies or outer components are subject to many changes and might need a lot of replacement from time to time. Consequently, the inner parts must be static such that they do not need a lot of replacement from time to time. According to Simpson and co-authors (13), the objective of the designers are to simplify the product and reduce the variety of parts by standardizing the components which in essence reduces the inventory cost and manufacturing variability of the products. This strategy depends on a variety of principles, which include the use of standardized component interfaces, compatible components, and the commonality of the various components across the different products. It is advisable that one uses the common components principle since it serves as a complexity reduction technique for manufacturing processes. This principle is very efficient in cost reductionin the maintenanceand assembly of the products. This principle can be incorporated into the system by standardizing the interface and using modular designs in production. Benefits and Draw backs of Mass Customization In every field of study, there are advantages and disadvantages that can be discerned from these forms of communication with the audience. They are dependent on how the customers interact with the companies and who determines what and at when. From the definition analysis, it is evident that the customer in such systems determines what the business is. The individual customer is now the center of focus of every business firm (Nielson et al, 2014). Many people have realized that they can order products and services to be delivered to them the way they want. Considering the rising number, single households and the orientation towards individualization in all the areas, then the firms have no option rather than to bend to the customers desires. They have to factor in designs and strategies such as the product family and the principle of commonality to achieve the objectives in terms of the specific requests presented by the customers. (Hvolby et al, 2014). Another drawback is that most companies have to process their customers individually, which precisely defines the main reason for the existence of mass customization. The company may take a lot of time to just serve one customer as they have fast to take in the concept of the customers and modify their products to fit the needs of the customers. They therefore are sometimes forced to modify to fit individuals requirement directly (Piller, 2009). In mass customization, usually the products and services produce by the company are specific that is individualized which creates a longer lasting relationship between the customer and the company selling the services or the products. This way the customers get used to the products and the company and develop a lasting attachment to the; this helps keep numerous customers inclined towards the company. From (Nielson et al, 2014), the economic theory is intended to ensure the goods offered are customized towards the needs of the individual customers through differentiation hence be able to charge premiums on the personalized presentations of goods to the clients. This is not the case in the current market, as most customers do not rely on the fact that they must charge premiums due to presentation because they are challenged with the threat of being faced out by competition if they decide to do so. However, the buyers will always demand for quality service and a variety oblivious of the fact that the companies go an extra notch to settle their needs (Piller et al, 2003). It is also very important to realize that mass customization is quite rooted on some principles for instance, the set up costs as well as the labor cost involved determine to a higher level the end service of the companies involved. Firstly, the design of the product and process for mass customization has to follow a relatively special design regarding the communality and modularity of the products (Blecker et al, 2007) and (Du et al, 2003). Secondly, the modern technologies in terms of information and manufacturing determine the product configurators as well as the dedicated systems hence are vital to ensure the firms cope with the information and planning complexity – therefore mass customization and personalization can be termed as a function of the computer integrated manufacturing (Blecker et al, 2007). Moreover, it can be concluded that mass customizationis a way opener for potential cost saving mechanisms, which can be classified as economies of mass customization according to Piller et al (2004). This forms the integration of information from customers into value creation. These economies are the result of the integration of customer information into value creation. The other conceptual advantage of mass customization is the use of this platform to increase the customer loyalty once the customer has purchased an individual item. The knowledge the supplier gets about the customer would help them fine-tune the customer to using their products and loving them more. The probability that the customers switch to another supplier is very small, as they would have to incur numerous losses. The fact that the switching customer would have to go again through the whole process of describing the whole idea afresh to the supplier would be very cumbersome especially if it involves a bigger project.Most well-known producer such as the Kraft Foods, Adidas, and Lego have ventured into these enterprising business marketing strategy thus ensuring a bettercustomization offering. Currently there are numerous debates concerning the problems affecting mass customization and personalization. The center of these debates is on areas such as the product architectures, qualification of workers, production planning and control as well as investment costs. The analysis and discussion above is mainly focused on defining and addressing the challenges facing this study from a new perspective where the customer and the consumer feature as the most important central figures of focus. The way the consumer sees the market products and services determines the type of products used and the level by which they would need to be customized. This further determines the level of relationship between the customer and the company or business as well as the trust the company will be entrusted with the customer’s idea. Future direction of mass customization With the advent of the digital platforms in almost all disciplines of study, the future of mass customization is very much dependent on the computing technology and the internet. Currently, the shift from traditional forms where the manufacturers determined the exact look and feel of the products for the customers is visible. It is expected that in future, the companies will utilize a lot of customer participation through the social media to help them understand the needs for individuals. An example is the GMAT Companyin China, which is already using this system to personalize its products and services. The future of mass customization is intended to provide a lot freedom to the various customers by giving them a chance to purchase beforehand and even modify their goods in the virtual environment before they are delivered to them or even after delivery and throughout their life span. This will shift the decision making to the consumers allowing them room to assert their unique identity and designs in their products. This gives them a sense of intimacy and originality with their products which is a highly sought after characteristic in the environment. This would be a way of getting the customers to utilize their products over a long period hence stick to the company. The result is a product ecosystem that can be considered as a dynamic unit where all products and services are well correlated with the user’s needs in an ambient environment. The future mass customization and personalization will very much depend on the computing technologies in place as well as the study of the interaction activity and flow patterns in this ecosystem of mass communication. Technologies might also influence heavily on the delivery of physical goods. There has been a proposition to have drones used in delivering goods to customers at their doorsteps. Just as an example, this is a very critical stage and advanced personalizations where the companies go an extra mile to ensure the goods reach the customers safely at their various locations and in time. This could extend to a level where the companies form a routine delivery system of goods that are mandatory to the users hence they can sustain their every time needs and in essence customizing the customer as one of theirs. All the company needs to do is just to inquire from the customer what they need and then deliver. Without even the customer having planned to order for such a good, they would offer suggestions from which the customer can decide to choose if it fits their needs. In a scenario, where customers are given choices accompanied with options to alter their choices look and feel using the technological advances, then there are bound to be production channels where the customers even decide to model their own products and services. Using the robotics knowledge, these products can be modelled and shipped to the customers in a very short time once the payment is complete and production finalized. It is important to note that technology is the main core factor that determines the changes in the usage of the mass customization and personalization concept. Market Segmentation This is a theoretical concept sometimes referred to as the “Segmented Markets Theory” that can be defined as one because there is no relationship between long and short-term interest rates hence the market is very much divided into these two different categories of interest yields. From this definition, it is clear that the yield curve that can be drawn to represent this definition of market segmentation is very much dependent on the supply and demand of the securities that are within the length of each maturity. Most investors prefer to set their preferences depending on the length of the maturities that they want to invest. Market segmentation denotes that the buyers and sellers cannot be substituted in any of the maturity lengths by each other. However, it is very clear that if an investor decides to choose to investwithout consideration of their own preferences, then they must be compensated for doing so as presented by the Preferred Habitat Theory. According to the market segmentation theory, the financial markets are subdivided into smaller divisions with the supply and demand forces being unique to each of them. Hence, they form the basis from which the yields can be derived. Deductions can be made such that it is the yield curve for each subdivision that ends up determining the division into the long-term, intermediate, and as well as the short term market segments. A case example can be given where the supply of short term corporate bonds like the commercial paper is pretty much dependent on the demand for the short term assets that include inventories, accounts receivables and as well as short term corporate bonds. It can be deduced from this research that the Market segmentation theory form a very powerful tool for analysis of the demand and supply curves in businesses especially regarding the concept of mass customization and personalization. It provides a foundation for economically explaining the resultant shapes formed by the yield curves in the form of the fundamental supply and demand theory. The market segmentation theory can generally be used to analyze the impacts of economic activities have on the structure of customization through a study of the various market segments involving various different niches of customers. The theory however has some risks accrued to it. It does not recognize the fact that it is possible for the rate of returns from a bond of a particular maturity segment to rise and induce the investors into buying the bonds with a higher rate at the expense of risk exposure. Furthermore, this theory is limited by the fact that it does not take much consideration in the role of expectations in determining the structure of interest rates. This limitations are better addressed in other theories such as the Liquidity Preference Theory, The Pure Expectations Theory and more so the Preferred Habitat Theory. E-commerce Organizations and Mass Customization For a successful implementation and integration of the various knowledge bases, there needs to be a lot of consideration and effort put into the flow of information through the various channels to all the phases of the value chain. E-commerce have an advantage as they are based on the internet which is a great and the most powerful tool used in propagating information through to almost any level. This makes them the best organizations likely to succeed in implementing their products using mass customization. The essence of these bodies is simply that they lower the transaction rates by cutting out the intermediary level business personnel hence increasing operational efficiency. Furthermore, this creates a system that is very much reliant on the customer to interact with the producer or seller. The result is a platform to enable communication and hence a lot of interaction between this two customer base. E-commerce is the only viable and the best channel that the customers can use to interact effectively with their customer base on an individual level. A channel allows for automation in the massive flow of information coming from the customer to through the value chain to various individual departments. The portals collect a large chunk of information starting from the user’s products, hobbies, interests, vocations and annual incomes etcetera. So as to ensure that the order information is well presented to the markets and that the details are well presented to the customer base, then they have to be able to channel the communication simultaneously to the various departments including the computerized systems, the finance and logistics department and the external suppliers. This would ensure immediate reaction from the various departments, which would ensure that they are well equipped in terms of contributing to the success of the orders posted by the customer. These systems usually require databases for collection of information that is classified based on the category it falls in. With all the data synchronized and stored in one database, a comprehensive analysis can be done to determine the required products that the customer would be more inclined to use. The products commercials and adverts can then be customized according to the user needs and services. This way the users can just view the commercials comfortably with the passion they have created for them while in the end the companies will also have had their message sent across to the various users of the portals and information outlets. The other advantage with this system of mass customization is that time and geography do not hinder the e-commerce platform from propagating their messages and the internet can be used to do business anywhere. This is generally the future of mass customization and personalization where even the basic advertisement sand commercials will be always digitally customized and personalized. Conclusion As wide a topic as it is, mass customization and personalization is just but a strategy that targets to profit from the fact that various people are different hence they have numerous needs that they would like to meet. These are categorically specialized needs depending on one’s own desires. The fact that people have different orientations in life simply means that they are very much affected by individualized needs that are more specific to individuals. This gives them the need to have specialized equipment that suits their desires. These specialized and individual needs have created a platform for the various producers and suppliers in the market to present their products in better way to the customers that encourages them to pledge their loyalty to them. This is where various companies compete against each other in selling their products to customers. As discussed above, these companies not only strive to have their products just sold but also create a loyalty from the customers. This way they can be able to provide their support services such as maintenance and any complications that may arise to the customer base. This system of business tends to address the long tailed business models where mass customization forms a very radical means of providing quality goods and services to customers according to individual needs with a near mass production efficiency.The use of customized and personalized services is a mutual benefiting activity whereby all the independent entities that include the customer and the advertising companies both benefit from their actions. The possibilities of success in this business are very high considering the fact that the customer base is more curious to have these services at their disposal. It is only prudent that all companies that wish to be successful in the modern market adopt this form of marketing to ensure that their customer base is wide and that they are able to maintain their customers. Since it is a mutual business model that would see to it that all the customers are well served in terms of their products with their personal interest being very much attended to. Using this model is one way that companies and businesses can be able to ensure that they are able to get the most out of their business and maintain the loyalty of their customers. With the future trends in marketing and technology, every company has to find a means to adopt these marketing trends into their systems as the potential customers are all being tuned to ask for no less than customized products. Reference List BLECKER, T., & FRIEDRICH, G. (2007). Mass customization information systems in business. Hershey, Information Science Reference. HERD, KATE, KARAMANOGLU, MEHMET, & BARDILL, ANDREW. (2011). Mass customization. What are we designing? HERD, KATE, KARAMANOGLU, MEHMET, & BARDILL, ANDREW. (2011). Mass customisation. What are we designing? HVOLBY, H.-H., MARTIN, C., & DREYER, H. (2014). Modelling and Organising Customer-Driven Business Processes in a Mass Customization Environment. PILLER, F., & MÜLLER, M. (2004). A new marketing approach to mass customisation.International Journal of Computer Integrated Manufacturing. 17, 583-593. PILLER, FRANK T., TSENG, MITCHELL M., HERD, KATE, BARDILL, ANDREW, & KARAMANOGLU, MEHMET. (2009). The co-design experience: conceptual models and design tools for mass customisation. World Scientific Publishing Co. Pte. Ltd. PILLER, FRANK T., TSENG, MITCHELL M., HERD, KATE, BARDILL, ANDREW, & KARAMANOGLU, MEHMET. (2009). the co-design experience: conceptual models and design tools for mass customization. World Scientific Publishing Co. Pte. Ltd. PILLER, FRANK T., TSENG, MITCHELL M., HERD, KATE, BARDILL, ANDREW, & KARAMANOGLU, MEHMET. (2009). The co-design experience: conceptual models and design tools for mass customization. World Scientific Publishing Co. Pte. Ltd. RAYNA, T., STRIUKOVA, L., & DARLINGTON, J. (2014). Open Innovation, Co-Creation and Mass Customization: What Role for 3D Printing Platforms? STORBJERG, S. H., BRUNOE, T. D., & NIELSEN, K. (2014). Mass Customization and Performance Assessment: Overview and Research Directions. UCHYIGIT, G. (2010). Adaptive Interaction for Mass Customization. Read More