MASS CUSTOMIZATION

AND CHANGING
MARKET TRENDS
 TEAM
SHUBHENDU PANDEY
KUSHAGRA PARMESHWAR
HARSH KHANDELWAL
SOHAM SEN
PARV JAIN
AAYUSH KATNORIA
KIRTI CHATURVEDI
VISHESH GUPTA
VIBHANSHU VAIBHAV
KINJAWL BHATTACHARYYA
CHESTA
 WHY MASS CUSTOMIZATION?
Enhanced Customer Satisfaction: Mass customisation aligns
products or services with individual customer preferences,
leading to higher levels of customer satisfaction and loyalty

Optimised Business Outcomes: Striking the right balance in

customisation efforts is crucial as excessive customisation
may not necessarily lead to higher prices or increased
customer satisfaction

HISTORIC PARADIGM SHIFT

Mass customization represents
a significant shift from
traditional mass production
strategies
This allows companies to
compete effectively on
multiple dimensions, including
price, quality, flexibility, and
delivery, concurrently

.R eference: https://tinyurl.com/3bb4uh3j
CP: CUSTOMIZED PRODUCT | MP: MASS PRODUCT
MCP: MASS CUSTOMIZED PRODUCT | MPP: MASS PERSONALIZED PRODUCT
EXAMPLES OF MASS-CUSTOMIZED PRODUCTS
Shoe Industry
EUROShoE Study Findings:
30% of men & 40% of
Mass Customization Pioneer women express a strong
Nike introduced mass customization in interest in custom shoes
Willing to pay a premium
1999 with NikeiD
for customization
Allowed customers to personalize
shoes for comfort, color, and style

Case Study: Cracking the Code of Mass Customization

My Virtual Model Inc. offers virtual avatars for trying products
Partnered with retailers like Adidas, Best Buy, Levi’s, and Sears
With 10+ million users, Land’s End Inc. saw a 15% increase in average
order value
The conversion rate jumped by 45%

Reference: https://tinyurl.com/2s3by6xc
 EXAMPLES OF MASS-CUSTOMIZED
PRODUCTS
Dell Model Dell utilizes the internet to offer its customers a range
of customizable computer features. This business
model eliminates the need for inventory and
intermediaries and is a customer-centric approach

Uniform P/E Ratio

Dell's Uniform P/E Ratio: 11.1x
In line with its historical average: 9.5x

Dell has been able to expand its ROA from 24% levels in 2015
to even more robust levels of 41% in 2021

Uniform ROA refers to an ROA which is standardized by adjusting earnings and assets
under the Uniform Adjusted Financial Reporting Standards (UAFRS)
 NICHE MARKET AND MASS MARKET

Mass Market

The mass market represents a broad and diverse consumer Role of Mass customization
base with standardized products
The products lack customization and benefit from
economies of scale due to mass production
Examples: smartphones, fast food, and basic clothing Offering customized products means tragetting niche
market
The concern of businesses is losing a considerable
chunk of users if offering customized products
Niche Market This would lead to losses
However, it has been found that contrary to this mass
customization blurs the boundaries between mass
Niche markets are specific, well-defined consumer
and niche markets
segments with unique and specialized preferences or needs
This leads to overall increase in market size thus profits
Niche market products are highly customized to meet the
specific demands of their target audience
Examples: Customized shoes, laptops, vegan cosmetics
 HOW MASS CUSTOMISATION HELPS IN
FRUGAL DESIGN
Reduction in Waste and Costs:
Mass customization reduces production waste by up to
50% compared to traditional manufacturing methods
Companies implementing mass customization techniques
have experienced a significant decrease in material usage,
leading to cost savings
Waste reduction through customization directly correlates
with reduced production cost aligning with frugal principles
Customer Satisfaction - Market Penetration
75% of consumers are more likely to make a purchase from
companies offering personalized products or experiences
Customization enhances customer satisfaction by catering
to diverse preferences, leading to increased brand loyalty
Tailoring products to specific market segments through
customization improves market penetration
Resource Utilization and Sustainability
Precise customization techniques have led to a 20-30%
reduction in material usage, optimizing raw material
resources
Energy-efficient manufacturing practices associated
with customization contribute to sustainable production
Sustainable manufacturing practices resonate with eco-
conscious consumers, driving market demand
Production Processes and Scalability
Automation and digital technologies enable efficient
customization, streamlining production processes
Scalable production models based on customization allow
quick adjustments to changing market demands
Data-driven decision-making facilitated by customization
technology enhances operational efficiency and scalability
 Warby Parker, A Case Study

About the company

Warby Parker started as a mass-market eyewear company in 2010

It recognized significant demand for customization due to unique vision
needs and aesthetic preferences
Launched various customization options, including prescription lenses,
sunglasses lenses, blue light lenses, and more

How mass customization bridges the gap

Data on the right shows that the sales of the company increased after
it started selling customized products
This shows that it targetted not only niche market but mass market too,
thus bridging the gap
However to produce them in large quantities it has to change it’s
manufacturing process
SOURCE: IMPACT REPORT PARKER, 2018
 Levi Strauss, A Case Study

Shift towards customzied jeans

Levi Strauss & Co., a mass manufacturing jeans company since 1873
shifted to providing customized jeans from 2015
Launched customization program called Levi's Tailor Shop to Profit/Loss ?
customize jeans
According to case study by markedium desk
Changes made within the company
The Tailor Shop to experience an average growth of 72% in
revenue in 2018 vs. their 2017 sales figures
The brand’s sell-through growth also increased by 15.6%
Levi Strauss & Co. is using new technology to customize the finishing of compared to the 2017 Christmas season.
its jeans. The article states that Levi Strauss & Co. is using a new
process called "Future Finish" to create custom finishes
They invested in new laser cutting and dyeing machines that allow it to
customize the fit of jeans and create a wider range of custom washes
They also changed inventory management system so that it could keep
a larger inventory of components, such as denim fabric and zippers

SOURCE: PRESS RELEASE BY THE

COMPANY ON JULY24, 2019
 Will market size decrease if customers don’t know
what they want?

TWO TRAINS OF THOUGHT

“Mass customisation only caters to niche market” “Customisation toolkits can be treated as learning
instruments”

According to this, only customers with high a priori insights A contrasting idea suggests that customers can learn through
about their requirements and preferences benefit from mass the process of customisation and realise their preferences
customisation. better

SOURCE: “mass customisation or niche customisation?”

-Nikolaus Franke and Christopher Hader
 Mass Customization and Customer Loyalty

While businesses should benefit from increased conversion levels, consumers trading up
and increased loyalty, the consumer receiving a personalised experience will feel more
valued and recognized

Our research has highlighted not only consumers' willingness to pay more for personalised
products and services, but also their desire to be actively involved in this process

According to a Deloitte study, 60% of consumers are willing to pay more for a personalized
product, reflecting the emotional value of customization

EXAMPLES

Netflix uses data to

LEGO's "Design by Me" Starbucks' loyalty personalize movie
lets customers design program allows recommendations,
their own LEGO sets, customers to customize contributing to customer
fostering engagement and their beverages and loyalty.
loyalty offers personalized
rewards
 CHALLENGES
01 02 03 04

SUPPLY CHAIN COSTS AND QUALITY SUSTAINABILITY

INTEGRATION PRICING CONTROL
Coordinating a flexible Employ strategies to Maintaining consistent Mass customization
supply chain to meet lower the expenses product quality while may result in increased
diverse customer associated with accommodating diverse waste due to smaller
demands can be manufacturing products customization options batch sizes and excess
challenging with specific customer can be a significant materials from
61% of companies specifications, challenge customization
struggle with supply determining the right 45% of manufacturers
chain integration in pricing strategy can be identify quality control
mass customization tricky. as a key challenge in
efforts mass customization
HOW TO ACHIEVE MASS
CUSTOMIZATIONS
Product family architecture [6]

IDEA BRIDGING THE GAP

Common core element Mass production
Varying product specification Customized configuration

CUSTOMERS
COST EFFICIENCY MARKET EXPANSION
Shared component Economies of scale
Shared manufacturing processes Diverse customer segment

EXAMPLES
Vehicle manufacturers
HOW TO ACHIEVE MASS
CUSTOMIZATIONS
Reconfigurable manufacturing systems [7]

IDEA ADAPTIVE MANUFACTURING

Reconfigurability in Shifting market demands
manufacturing processes Reconfiguring production system v/s
investing in entirely new equipment.

CUSTOMERS
CUSTOMIZATION EFFICIENCY
Reconfigured production for small- Minimize downtime
batch manufacturing Waste reduction

EXAMPLES
3D printer/Robotic manipulator
HOW TO ACHIEVE MASS
CUSTOMIZATIONS
Process variety [8]

IDEA EFFICIENT OPERATION

Customization of product => Standardized core processes
exponentially increased Flexible workflows
variation in production systems

CUSTOMERS
RESOURCE UTILIZATION RESPONSIVENESS
Efficient resource allocation across Tailored processes for meeting
processes based on degree of customer demands
customization
EXAMPLES
Fast food restaurant
HOW TO ACHIEVE MASS
CUSTOMIZATIONS
Modularity [9]

IDEA DESIGN-MANUFACTURING EFFICIENCY

Small, upgradable self contained Optimize individual component
modules Faster product development

CUSTOMERS
CUSTOMIZATION COST SAVING
Component sharing between products Reusing standardized modules
Fully customized product Non-redundant manufactiring

EXAMPLES
Smart phone assembly/Custom PC builds
 SCOPE FOR FUTURE RESEARCH
Dynamic Production and Multi-Generation Product Market Demand Analysis and
Supply Chain Configuration Family Design Customer Behavior Prediction
This entails examining Research in this area centers on swiftly This scope involves
time-dependent costs responding to market shifts and adjusting using machine learning
and lead times in existing systems for changing customer to predict market
configuring production preferences demand, anticipate
and supply chains, customer behavior, and
especially for long- improve product
lifecycle products development for
challenging conventional enhanced customer
assumptions satisfaction and design
 References
1. Industry 4.0: a way from mass customization to mass personalization production (Yi Wang, Hai-Shu Ma,
Jing-Hui Yang AND Ke-Sheng Wang)
2. Design for mass customisation, design for manufacturing, and design for supply chain: A review of the
literature (Shixuan Hou, Jie Gao AND Chun Wang)
3. Enabling mass customization: extending build-to-order concepts to supply chains (A. E. CORONADO, A. C.
LYONS, D. F. KEHOE and J. COLEMAN)
4. Customizability analysis in design for mass customization (Jianxin Jiao, Mitchell M. Tseng)
5. The paradigm shift of mass customisation research (Songi Kim, Keeheon Lee)
6. Fundamentals of product family architecture (Jianxin Jiao, Mitchell M. Tseng)
7. Reconfigurable manufacturing systems (Y. Koren, U. Heisel, F. Jovane, T. Moriwaki, G. Pritschow, G. Ulsoy,
H. Van Brussel)
8. Design for mass customization: Product variety vs. process variety (Joanna Daaboul, Catherine Da Cunha,
Alain Bernard, Florent Laroche)
9. Fundamentals of Product Modularity (Karl Ulrich)