Mass service customization creates opportunities for firms to provide products and services to serve unique customer needs while maintaining the efficiency of near mass production (Jiao, Ma, & Tseng, 2003). With mass production, economies of scale are generated with the continuous production of similar, standardized products; however, a consequence of mass production is the limitation of customer choice. No longer are customers satisfied with mass production, customers want tailored products individualized to their demands. Mass customization is an opportunity to accentuate the differences or uniqueness of services to appeal to specific customers. Therefore, firms companies that create mass individualized services are more able to give each customer what they want, when they want it. Mass customization of service requires an awareness to meet the unpredictable variation each customer demands. Consequently, critical factors of flexibility, variety, and timeliness are essential with mass service customization (Peters & Saidin, 2000). Firms that offer customized services must also design its products with flexibility in mind. Design flexibility allows for easier variations, modification, or adaptations to the meet the specificity of each customer. With lean manufacturing and smart factories, firms have a greater flexibility to modify, create, and assemble unique services for customers (Daft, 2016). In offering and differentiating customized services, a firm must
Real-world businesses with customers which require product flexibility, in lower volumes, have the beginnings of a job shop production process (Choudhari, Adil, & Ananthakumar, 2012). Such a beginning is further evidenced when the job force is made up of highly skilled employees that are able to help create a wide array of products (Pederson, Dresdow, & Benson, 2013). The job shop process is also very widely used because of its many advantages, and despite the scheduling challenges which it presents (Meredith & Shafer, 2013). Organizations
new products and or a service. Marketers explore ways to distinguish themselves, in the eyes of
Tangible goods, or rather manufactured goods, have been the dominant medium of exchange for centuries. However, recent decades have proved that it is no longer the case as there has been a prevalence of being service oriented (Vargo and Lusch, 2004:1-2). Services, as defined by Vargo and Lusch (2004), are “the application of specialized competences (knowledge and skills) through deeds, processes, and performances for the benefit of another entity or the entity itself (p.2).” Utilizing services gives businesses an edge, a competitive advantage, particularly in an evolving competitive market, something which Metalfrio is definitely part of (Vargo and Lusch, 2004:9). Those businesses that learn to adapt tend to do well. In addition, Vargo and Lusch (2004) write this shift to services is also a shift from producer perspective to a customer perspective (p.2). Thus, it leads to more of a collaborative effort where co-creation leads to adding value to the service rather than a product having value (Vargo and Lusch, 2004:6). Also, customers rather develop relationships with those that can provide a range of related services over an extended period of time, thus allowing businesses retain their clients for the long term (Vargo and Lusch, 2004:13). Overall, service oriented marketing is a direction that businesses should be headed towards to ensure that they can remain relevant and competitive in the
In this way, both the individual consumer and the business customer have the same basic factors motivating their decision, but with very different reasons for doing so. By looking at the customer analysis, it is apparent how Enterprise has tailored its services to satisfy the needs of the consumers.
While mass customization is a viable option in manufacturing with digital factories and employing lean manufacturing designs, service firms have to employ a more productive environment to make mass customization profitable. Mass customization refers to using mass production technologies to quickly and cost-effectively assemble goods that are uniquely designed to fit the demands of individual customers (Daft, 2016, p. 271). The key challenge for service mass customization is to translate information about consumer preferences gained through market research into a format that can be easily used for service modularization decisions and customer-contact personnel training (Haas & Kunz, n.d., p. 603). In the service arena, mass customization becomes an ongoing configuration process with direct involvement of the customer coupled with professional advice by service personnel who understand the configuration rules and know them by heart. A clear understanding of the customer’s needs is required, as well as a requirement by service personnel to provide the customer clear and concise configuration options that strike the perfect balance between flexibility and complexity. Also, a continuous interaction between frontline contact personnel and the customer is a consequence that must be
The first time our civilization has faced with mass customization in pre-industrialization era. In spite of this fact, today we also have started to develop it. Of course, these times are very different, because today people use modern technologies. Between these periods we can observe mass production, which come in vogue with fundamental benefit of economy of scale and it was peak in mid century. For example, it was time of Soviet Union, and then companies produced a lot of similar clothes, shoes and etc. In late twentieth century, mass customization was back. Manufacturers offer different variation of products and customization is possible. Methods of application will examine in the next section.
The lean principles can be applied to service operations, as service operations are “organized systems of production processes” with the same potential for improvement through implementation of lean precepts as manufacturing operations (Benson, 1986 in Duclos et al., 1995). Manufacturing employ processes that add value to the inputs used in creating final products, which is in a way similar to services (Canel et al., 2000). Silvestro et al. (1993) classified service processes into three major headings of professional, service shop and mass. These three majors headings are further classified into six different dimensions of equipment/people focus as the main element of the service delivery is provided by equipment or people; customer contact time per transaction; the
Differentiation can be achieved in a variety of ways: unusual features, responsive customer service, rapid product innovations, technological leadership, perceived prestige and status, appeal to different tastes, and engineering design and performance. Methods of controlling costs, however, may be limited. The ability to price differentiated products competitively will be important for reducing upward pressure on customer prices so that they do not exceed the level customers are willing to
Firms pursuing a specialization strategy often try to develop a competitive advantage based on customer intimacy and try to deliver unique and customizable products or services to meet their customer’s needs and increase their
For services offered to businesses, wholesalers, distributors and retailers differentiation takes place on the basis of a host of additional factors such as the quality of services, ability to serve large orders, ability to generate sales for third parties and speed of performance of its
2. (p. 4) The maintenance contract offered by Sears on its Kenmore refrigerators, dishwashers and microwaves is an example of a(n) _______.
2. Unique business model – expanding on the self-service trend with a unique twist and custom pricing options will be appealing to all consumers.
The focus of Mass Markets is gradually shifting towards Niche Markets. Such markets mainly focus on particular products to a much defined audience unlike mass markets. The product is customised and made according to customers’ needs hence the customer is also ready pay for their preferred product.
Sawhney et al. (2004) present a model for product companies to increase their value proposition to customers by adding services with an objective to differentiate themselves with their competition. One such company which benefited from such an innovation is the ICI-Nobel (Collins and Gibbs 1995). ICI-Nobel was in a commoditized market of supplying explosives to mining companies and was facing a stiff
Service Marketing This life is quite challenging if we look at things from a different perspective in terms of responsibilities that we have to shoulder at almost all the stages of our lives there are a number of social and personal and private commitments that have to be met quite religiously. Personal commitments are those, which you take on yourself. These are the things that are required to be done to get somewhere in life and to live the life to its purpose and to make things much more meaningful. This may include taking in time to teach you about different cultures and providing for detailed description. We live in a highly global village where almost everything is interlinked and the diversity of cultures requires us to exhibit