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Changing a traditional product / service to the needs of individual consumers

The Dell company practices the service "Assemble the computer of your dreams": you can set the necessary characteristics for the hard drive, select the required amount of memory and many, many other characteristics. This new trend of predominantly Western companies is customization - changing a traditional product / service to suit the needs of individual consumers.

Customization, referring to the history of market relations, is not something innovative, on the contrary, the market began with it: suits were made by tailors for individual orders, jewelry, interior items were made exclusively for the client. Having rebuilt to a different type of marketing, the market began to focus on reducing costs and optimizing production, and goods began to be "stamped" in mass quantities and lost their main value - individuality. As a result, the consumer lost himself, his style and became one "big client" for the company.

Tired of the monotony, the client began to demand an individual approach to himself, and organizations began to offer this kind of service for a very impressive price: “They say, if you want an individual approach, pay twice.” As a result, we observe the process of filling the market with “same” goods, from which we want to go to something new and unique.

Customization in Russia

The West clearly demonstrates the promise of customization, however, Russia still lacks positive experience, if only because Russians are not always ready to pay impressive sums for being different. At the same time, a group of consumers has already formed in megacities, which can be considered the target audience for customized goods. The need for products tailored as much as possible to personal tastes is crucial where the market capacity is large. For example, in the auto business, customization was not only put on stream, but also made an additional source of profit. It is more profitable for a salon to sell a car with additional luxury options than with a standard set. So, about 10% of the total number of orders in domestic car dealerships is an individual assembly. In addition, there are premium-class models, the equipment and interior design of which are exclusive. In this case, customers, as a rule, try to "start" the car with absolutely everything, sometimes even with those options that they will never use.

In the process of customization, in addition to the taste nuances of the client, the image characteristics of the product are also taken into account, i.e. when the same product is packaged differently for different customers. Not a reproach to domestic producers, but it is no secret that a number of TM juices are bottled at the same plant, but are positioned in different price segments. Design is one of the main customization tools: packaging design, interior design, clothing, jewelry, technology, etc.

A successful example of customization can be considered the activity of the manufacturer of chocolate products "Konfael", which is developing a network of stores of the same name. In the range of salons there are sweet souvenirs and sets for various holidays. Along with them, you can also purchase a completely personalized product - for example, order a full-length figure of your favorite mother-in-law in chocolate. Artists undertake not only to reproduce the external resemblance, but if desired, they can adjust its forms to Hollywood standards or “change clothes” into Catherine II. And in 2011, a famous designer presented a collection of chocolate dresses at a fashion show. Of course, these clothes are not meant to be worn, but they are perfect as a creative idea for a photo shoot or runway show.

Unusual overlays, stickers, sequins, rhinestones - everything that individualizes a thing, arouses interest in it and a desire to purchase it. Given the fierce competition in each market segment, manufacturers are forced to expand the scope of the product and its functionality in order to later adjust the design to technical features and vice versa. For example, jockets for mobile phones are in high demand. The idea is good because the client sticks the image himself, failure is excluded - jockets can be re-glued several times. This custom design method is very exciting.

Marketers say that, unlike the West, Russian business is not yet ripe for such a customer focus. In our country, the trend of "boxed" solutions is more distinct. Ready-made tariffs, ready-made tours, ready-made packages. On an industrial scale, that is, in the mass market, where it is required to ensure rapid throughput, or flow, any personalization increases transaction costs. Who needs it? Yes, and why customize, if everything is already bought. Any mass production is obviously cheaper than an individual approach. But there are different ways to personalize. You can use expert customization, then you have to create a new product for each client. For example, the Paris Miki company sells glasses, each model of which is designed based on a photograph of the buyer and taking into account his personal preferences. This option is extremely expensive and significantly increases the cost of the final product. The alternative is modular customization. If the product involves a certain division into elements (a set of functional parts), then the client may be given the opportunity to choose his own package. This is what the already mentioned company Dell does. Another option is customization at the design level, that is, the person himself chooses the style of packaging, the shape of the product. The Porsche Cayenne, for example, offers a wide range of combination options for interior design, from elegant to sporty, thanks to a wide range of colors and panel structures. For example, stylish wood finishes, aluminum finishes or – straight from motorsport – carbon fibre. Everything according to the client's taste.

Any product can be customized, especially if the development of the idea is aimed not so much at increasing profits, but at increasing the credibility and prestige of the TM. The so-called luxury-class goods and services should be in small quantities and cost a lot. Otherwise what is their value?

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Mass customization

Mass customization is the production of products for a specific customer, performed in a standard way, without involving additional time and human resources.

An example of a company successfully using mass customization is Nike(sportswear). It does not produce anything in its own factories, it is only engaged in design, technical specifications and distribution system.

The company has a dedicated website www.nikeid.com. Any buyer can go to it and design sneakers for themselves by choosing the right size, material, color, model, stickers, embroideries, etc.

Customized shoes cost $120-150. Moreover, the same sneakers with similar options in the store can be bought for only $30–40.

It turns out that people are willing to pay several times more for the opportunity to buy exactly the sneakers that they themselves came up with, with their own embroidered or embossed name.

Benefits of Bulk Customization

Another advantage of mass customization is that a person who has gone through all the obstacles and customized his product has put the parameters of the product he needs into the database and will not go to competitors, where he will have to do the same thing again.

This is how customer loyalty is won - something that currently does not exist on the market, but can be achieved with the help of mass customization.

In North America, Volkswagen offers its customers a similar opportunity: instead of five or seven standard car colors, the buyer is given the opportunity to choose from 20-30 different leather options.

Increasing the number of options when shaping the final look of the product makes it possible to further tailor the machine to a specific customer.

If Volkswagen put the Prada logo on the seat, embroidered the customer's name in monograms, or gave options to choose from as a set of women's accessories, such a service would be in even greater demand.

History of customization

The application of customization began in the 1950s, when assembly line production was put on stream. A huge number of firms produced the same goods in large quantities, then the products settled in warehouses - and sales volumes were difficult to control.

At first, the market was unpretentious and bought only those goods provided by the manufacturer. Then, accustomed to diversity and the opportunity to choose, the market began to demand from manufacturers products that better suit its needs.

Custom products began to appear, but their production was expensive. People were needed to complete the drawings, control production, calculate costs, etc. All this was done manually, which affected the price of the final product.

Customers are accustomed to the fact that customized products have their own value and special value.

It has only been in the last few years that mass customization systems have emerged to support drawing generation, material selection, etc., and produce products in a standardized way without increasing costs.

A fork has formed: people are willing to pay a lot of money for customized products, which is not actually worth their production.

Bulk customization in B2B

You can increase the profitability of the company with the help of mass customization not only when your product is consumed by the end user, but also when working in the B2B sector.

There is a company in North America that manufactures electric trains. They have a unique appearance for each city. The city gets used to trains of the same design, begins to replicate it in its advertising campaigns; It makes no sense to switch from one type of train to another. Therefore, the company's management refused to make electric trains with a similar design in China.

Manufacturers of kitchen furniture, which are sold through extensive dealer networks, enjoy an interesting technique. Minor changes are made to the basic furniture configuration (color changes, handle design, etc.), which do not increase the cost of production. Then these changes are transferred as exclusive distributors, which allows you to include in the advertising campaign the statement that exactly the same furniture cannot be found cheaper from any other seller.

If the buyer finds the same furniture at a lower price, they will return the money and make a gift. Naturally, it is impossible to find similar furniture, it simply does not exist. But the advertising move allows you to attract a large number of buyers.

Using mass customization and selling custom products allows you to distance yourself and your dealers from competitors.

Distribution networks, when they get special products on sale, will not go to competitors and will not look for cheaper products.

Customization in the premium segment

Recently, a separate segment has emerged on the market, which is growing very rapidly.

This is a premium market (mass affluence). It is made up of people who are willing to pay much more not just for customized, but for unique products that carry aesthetic value in addition to functionality and demonstrate the uniqueness of the owner.

If you sell any one category of goods, you can make two or three versions in different price categories. This will allow you to enter the premium market and offer luxury products.

Naturally, this requires other service, terms of service and sale.

Also, representatives of this segment are willing to pay much more for goods tied to well-known brands. For example, high school gym lockers adorned with Disney characters cost $10, while similar locks without pictures cost $3–4. And the cost is the same.

Disney requires money to license their images, but that investment is covered because kids want a unique lock on their locker and ask their parents to buy one.

Cheap identical castles are sold much worse than expensive ones that have uniqueness and attractiveness in the eyes of children.

Customization of products for different market segments is very common among successful companies. For example, LG in Saudi Arabia makes a lot of gold-plated appliances (TVs, microwave ovens, DVD players, etc.) for customers who want to purchase luxury goods.

At the same time, in the same Saudi Arabia, the company sells microwave ovens with a built-in barbecue function, because eating fried meat is a tradition of the Arab peoples. In the Middle East, these ovens are selling very well.

LG was one of the first to use product customization for mass markets. In India, she sells refrigerators with huge containers for vegetables and fruits: there are many vegetarians in this country, so the internal system of the refrigerator was completely redesigned to increase sales.

Customization for the market segment

Customization can be carried out not only for a specific client, but also for a market segment, which also allows you to stand out from the competition.

In the furniture industry, if a person orders a wardrobe, sofa, bed, or something else with dimensions that differ from the standard ones, he is ready to pay 15-20% more for a household item made to the dimensions that he needs.

A striking example of customization for a market segment is the production of minivans. There is an entire industry that equips minivans and adapts them for the delivery of goods.

GAZ makes Gazelles adapted for fixed-route taxis.

People are willing to pay much more for customizing products to fit their needs. And the more the product matches the niche, the more customers are willing to pay for it.

Customization and production volume (private label)

Another way to customize products is private label. it production of products without a name and their adaptation to specific customers or their group.

If you have customers or dealers who can buy a large quantity of goods in bulk, you can create products with the logo and name of the customer or dealer.

They will feel a sense of belonging to the product, their importance and connection with you. Such customers are very reluctant to go to competitors - if you offer them a product that has their name on it.

This is actively used by Bang & Olifsen, which manufactures plasma TVs at the factories of other companies, doing only design and packaging. She puts her own brand on TVs and sells them at a much higher price.

Very few use mass customization, but if you look closely at the activities of successful industrial enterprises, you can always find elements of mass customization in them.

Questions and answers

Will mass customization of a product cost more and how to tailor a product to a specific customer without increasing costs?

Usually, if customization is configured correctly, it does not lead to a significant increase in production costs.

Many computer systems today support standard product manufacturing processes, but each industry has its own nuances.

Won't mass customization be so widespread that it becomes the standard? Will the uniqueness of the approach disappear?

This is not possible because new standards, products, industries and markets are constantly emerging. A few years ago, the market for mp3 players and iPods did not exist. And now the market for accessories for them amounts to hundreds of millions of dollars.

New features for which you can customize your products appear all the time.

Can mass customization work in production for other businesses?

Yes, definitely. But in each case and in each production there are nuances. All industrial enterprises cannot be automated in one way.

How much does it cost to introduce a new system or procedure into production?

It depends on what system exists in your production at the moment. If it is modern, you can not change it, but improve individual procedures and enable mass customization.

If the existing system is out of date, either it or the approach to production will have to be changed.

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There are the following types of customization:

Horizontal (modification of products from the same, impersonal components);

Vertical (a unique product from unique "components" originally created for a specific client).

One example of vertical customization is the Italian olive oil producer Nudo, which has revolutionized the idea of renting a personal olive tree for 90 euros per year. The owner will be able to come to the Nudo farm to show "his" tree to friends, take care of him if he wants. And for each such client, Nudo employees will press the oil from the olives grown on his tree, indicating this on the package. The company proposed a completely new way of customization: to give individuality to the mass product, firmly linking it to the personality of the client.

The additional value of the product will grow even more if the client not only gives it a personality with a set of standard modifications, but also participates in its production.

One of the secrets of profitable customization is good communication and coordination between production and marketing departments. It is these departments in the company that develop customized offers for buyers. It should be noted that consumers demand from companies, each time, a wider line of products, personalization of goods or services. Thus, companies, in an effort to cut costs, often produce the “wrong product”, and therefore consumers do not need such a product or are willing to pay a much lower price for it. Disruption of communication between departments is a problem faced by any company. It is because of this that most companies fail in today's market, where customization reigns. The discord between marketer and manufacturing leads to higher costs and significantly complicates the implementation of a strategy focused on customization. Another point that needs to be taken into account is that the main motive of sales managers is not to understand the general trends, not to identify the main preferences of the target audience of the product, but to make a deal with the client, get an order and a legitimate premium. Therefore, attempts to customize the product often fail. Therefore, the "customization" strategy must be used in the right direction.

2. The phenomenon of mass customization as a marketing concept for the development of modern companies

Mass customization allows you to most effectively provide a variety of goods for the consumer. Levi-Strauss sells customized jeans, Andersen Windows makes windows for a specific home. Buyers can see their names printed, sewn on or carved into stone.

After the merger of Compaq and Hewlett-Packard, their combined revenue was 2.5 times that of Dell, but the profit was only 40% of the level of Dell. One of the main reasons experts call Dell's choice of mass customization strategy.

The essence of the concept is to create such a control system when, on the basis of mass production, the final product is produced for the individual consumer. At the same time, the strategy is based on the fact that all the costs of bringing the basic production basis of the product are fully paid off even at the stage of product manufacture. The purpose of customization is to offer a unique product that can satisfy "special needs". By “special needs” is meant a situation where the consumer is generally satisfied with the main consumer characteristics of the product, but there are individual wishes for its modification. It should be noted that we are talking about modifying the product, and not modernization (making deep qualitative changes) or creating a fundamentally new product.

The most important aspect in which the profit maximization from the use of mass customization is achieved is the practice of obtaining payment from consumers before the manufacturer bears the cost of acquiring the necessary additional components and the actual production. So with $31.2 billion in annual revenue and advances from buyers 6 days before suppliers are paid, the company has $720 million a year in working capital to invest in mass customization (32.1 / 260 x 6).

What questions should be considered before moving on to mass customization:

1. What needs to be changed in the production structure and management system for this transition?

2. What additional skills are needed and how to organize a staff development system?

3. Where to find additional sources of funding for the transition to mass customization?

3. Characteristics of mass customization

As can be seen from the table, mass customization is a kind of symbiosis of mass and single-piece production.

To effectively transition to mass customization, you need to make changes in the following areas:

personnel management system;

production system;

Relationships with suppliers and clients;

Product promotion system;

Organizational building;

Business philosophy.

Let's take a closer look at what changes need to be made.

In the field of personnel management, the most important aspects to pay attention to are recruiting, motivation system, training and creating a working atmosphere.

When hiring specialists, attention should be paid to the presence of general marketing knowledge and a communicative function. These two points become relevant, since when implementing a mass customization strategy, staff must understand and satisfy individual customer requests, while evaluating their correlation with the corporate marketing program.

The motivation system should be aimed at encouraging the initiative to find new customers, create a base of regular customers and put forward rationalization proposals from all functional and production departments of the company.

It is also obvious that the new concept requires investment in the training system for both office staff and advanced training for workers.

The reorganization of production usually begins with the "modularization" of processes, when the output is not the final product, but a wide variation of modules or components from which individual products will subsequently be made. This change requires the construction of a flexible production system in which the time factor is dominant. That is why, as a rule, companies working in the field of mass customization give maximum powers to the production departments in the field of making any management decisions aimed at adapting to the constantly changing needs of customers.

In price competition, product features have become simplified, and customer needs have been reduced to an average value. The return to the uniqueness of goods is due to the presence on the market of a large number of almost identical products. Saturated with monotony, consumers now want to buy products that are custom-made and emphasize their status and significance.

Targets and goals

The main task of individualization is to create for the consumer a feeling of ideal interaction, in which the personal needs of the client are satisfied and all work is done "only for him". Customization increases the competitive advantage of the product and creates higher value for the consumer.

The main motives for ordering goods "for oneself": obtaining public recognition and personal satisfaction of the consumer. Understanding these reasons gives consideration to A. Maslow's pyramid of needs. At the lower levels of the pyramid (satisfaction of physiological needs and a sense of security), a person does not think about the exclusivity of the product, and, as a rule, the price factor is decisive. But rising to a higher level, and in need of public recognition and respect, the consumer begins to pay attention to other qualities of the product. An individually manufactured product for a specific person or a narrow group becomes more desirable in the eyes of the consumer and society and acquires greater value. With such motivation, the consumer does not choose the product that has the best characteristics, but the one that the manufacturer has made "for him." It is this factor that gives the product the greatest value in the eyes of the buyer.

You can customize a product using:

replacement of some components of products with better ones;
bringing individual systems to a higher level, providing them with improved quality characteristics;
production of all components on an individual order;
manual element trimming, which provides improved performance through element matching or system adjustments.

The result is high quality products with exclusive features that meet the individual needs of the customer. The price of such a product will be determined by the cost of production and the willingness of the buyer to pay for his ambitions, and not the functional requirements for the product.

From idea to production

When customizing, there is a reassessment of the real qualities of the product. The generally accepted evaluation parameters for individualized products do not work, since the concept of quality is a purely personal perception of a person, and he himself determines its decisive criteria. At different stages of life (reaching a certain age, status or position in society), the assessment parameters may change. Achieving significance and recognition of one's social group is one of the main motivation factors for ordering customized products.

Customization differs from simple product line expansion, in which products are targeted at narrow segments of consumers and are standardized.

Customization types:

Individual (expert). Creation of a product for the individual needs of a particular client. Suitable for high-end segment products, and associated with high costs.
Modular. It is used if the product can be divided into parts or components. In this case, the consumer can choose his own version of the configuration of the system elements.
At the level of appearance. The buyer can choose the type of packaging or packaging.

Customization at the level of components of the final product can be the best way out of the situation. Pizza making is a prime example. When preparing it, the buyer can order his favorite set of components. By the same principle, some models of equipment are produced, which are completed with the set of devices necessary for the consumer.

Customization can also be divided into:

horizontal(when the product is modified from typical elements offered for selection);
vertical(the product is created from unique components, which are also created based on their individual wishes of the client).

Creating a customized product is a creative process in which two parties are directly involved: both the manufacturer and the customer.

The main stages of the customization process:

The first and most important step is to understand the needs of the client, his desires and interests, the motivation for buying this product.
Determination of the set of properties and characteristics that a product must have in order to meet the needs of the buyer.
A clear fixation of all the wishes of the client, to transfer the order to production.
Cost calculation and price negotiation with the client.
Production and delivery of goods to the buyer.

Food items that can be customized

Customizable products should be made up of components that can be easily changed or adapted to the needs of the customer. Not every food product can be customized - a consumer product with low elasticity (for example, bread, milk) is purchased to satisfy a physiological need (to satisfy hunger). These products are low-margin and although they are in daily demand, it does not make sense to unify them. In this case, the costs will exceed the profitability. But a completely different matter is chocolate, confectionery or delicacies. A person acquires such products for pleasure and is ready to pay more for it.

You can customize products using variations of the set of components, a unique recipe or individual packaging. You can personalize your product with unique packaging or labels.

Food items that can be custom made (individual or modular customization):

chocolate and confectionery;
elite drinks, cocktails;
herbal preparations, teas;
dry breakfast sets;
ice cream with different fillings;
meat and fish delicacies to order;
raw milk products;
selection and home delivery of individual grocery sets.

Expediency, benefit or just cost?

The uniqueization of the product is associated with additional costs for production (the system for receiving orders, sending it to production, manufacturing and delivery to the client) and promotion. The cost of such goods must be recouped either by a high price or by expanding market share. As a rule, small companies practice an individual approach to the manufacture of goods for a specific consumer, but for large manufacturing or trading firms, customizing a certain group of goods can also be cost-effective.

The feasibility of the process must be assessed based on the following parameters of the product:

Planned market capacity. To assess the size of the market, it is necessary to clearly understand who is the target buyer, what price is he willing to pay for a unique product, and how often will he order it?
The profitability of a unit of goods. Manufacturing and shipping costs. Promotion costs.
Market share growth prospect.
Planned project risks. Such risks include: low demand for the proposed product, competitive products, low profitability, etc.

Customization to the individual tastes of each consumer can be beneficial if the process is properly organized. One of the most effective ways to increase profitability and reduce the cost of producing a customized product is through strong coordination and communication between production and customer service personnel.

The feasibility of customization depending on the type and market share of companies:

For small companies, this is an opportunity to find and occupy their niche, "detuning" from competitors.

For large trading enterprises, customization of a certain direction of the product range allows increasing consumer loyalty and sales of products of the main assortment. Even by making one product to order, the company secures its reputation as a manufacturer "that takes into account the needs and wishes of the buyer."

Many gamers are interested in the question, what is customization? It refers to any process by which any element of the game is created, improved or decorated. Most often, this concept refers to the main character and changes to existing projects. Customization is completely dependent on the tools that the manufacturer creates directly for the players. The projects differ from each other in that some received a huge editor with great functionality, while others received a small choice between models.

The popularity of customization in games

Customization is an opportunity for the player to express himself in any gameplay. He can create a character that will stand out and be as unique as possible. RPG players are often happy with this. The editor can enable the gamer to create any character they like. Customization also applies to those games in the shooter genre. Usually in them she captures interesting weapons. In racing, self-creation of cars is common. And these are just the most popular options.

Term Explanation

The term "customization" is a concept that refers to the change of any element in the product, making it more convenient for the buyer to use. Often this word is used by marketers in the professional field. In this case, it will mean a change in the design of products. In the digital industry, this term is also often used.

The Windows operating system is software that can be improved and changed. Everyone who loves beautiful desktops has been coming up with beautiful screensavers since the first version.

Today, customization concerns not only the design of the system, but also the computer from the inside. Users are allowed to install gadgets, download various themes and wallpapers. But you need to understand that the ability to rewrite the code is not provided. Most often, this term is used in games in which manufacturers allow gamers to create levels, new characters, and so on. For this, special editors are used.

Characters in RPG

Customization is a never ending process in RPG games. Immediately upon first login, the user opens an editor in which you can choose the appearance of the hero and his size. In many large games, even small elements of the face can be changed, creating an almost perfect character.

The game Fallout 4 has advanced far in this matter. After it was released, gamers spent at least 3-4 hours in it, without really starting the process. Customization continues throughout the game: a choice of armor, clothing is constantly provided. A person can choose any option according to their preference.

In the Skyrim game, you can even choose hairstyles, and in Fable you can beat tattoos. Thanks to this approach, users do not lose interest and do not leave the project halfway through.

Editor at MMORPG

An overview of customization in should be described separately. In this genre, this process is practically the main one. The fact is that in such games, each user is trying to stand out from the rest. The gameplay continues constantly, it is possible to participate in adventures as a group. If there is no way to immediately stand out from the rest, then players, as a rule, will not like this project at first sight.

It is necessary to note the Korean MMORPGs, which belong to the upper class. We are talking about Blade and Soul and others. The editor built into them allows you to change even the color of the eyes. It would seem a frivolous and small detail, but many players like it. In games of these genres, customization does not end with the design of one character. In a project that is known throughout the world, World of Warcraft, the hunt for beautiful clothes began a long time ago, but is still relevant. In many games, customization is very different. The common feature of every process is to make the player interested.

New customization

Customization examples have already been described above. Now we need to talk about how this process is changing. In 2010, the question arose of how to introduce paid content into the project, which would be secondary and not affect the main storyline. Prior to this period, the strongest competition between the players was created, since, as a rule, the material sphere greatly influenced the position of the gamer. Nobody liked this.

The concept of "skin" became known after the release of League of Legend, in which customization became paid - basic elements were available for free, but for special items you had to pay extra. This scheme has spread very widely and is now used in all major games. These are the options for customization.

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