Mass Customization

What is 'Mass Customization'

Mass customization is the process of delivering wide-market goods and services that are modified to satisfy a specific customer need. Mass customization is a marketing and manufacturing technique that combines the flexibility and personalization of "custom-made" with the low unit costs associated with mass production. Many applications of mass customization include software-based product configurations that allow end-users to add and/or change certain functionalities of a core product. Sometimes called "made to order" or "built to order."

BREAKING DOWN 'Mass Customization'

B. Joseph Pine II's 1992 book "Mass Customization: The New Frontier In Business Competition" describes four types of mass customization:

1. Collaborative Customization - where companies work in partnership with individual customers to develop precise product offerings to best suit each customer's needs.

2. Adaptive Customization - where companies produce standardized products that are customizable by the end-user.

3. Transparent Customization - where companies provide unique products to individual customers without overtly stating the products are customized.

4. Cosmetic Customization - where companies produce standardized products but market the products in different ways to various customers.

RELATED TERMS
  1. Market

    A medium allowing buyers and sellers of a specific good or service ...
  2. Perfect Competition

    A market structure in which the following five criteria are met: ...
  3. Monopolistic Competition

    Characterizes an industry in which many firms market products ...
  4. Demand

    An economic principle that describes a consumer's desire and ...
  5. Economics

    A social science that studies how individuals, governments, firms ...
  6. Dog Eat Dog

    Intense competition in a market. Dog eat dog competition most ...
Related Articles
  1. Fundamental Analysis

    Great Expectations: Forecasting Sales Growth

    Predicting sales growth can be something of a black art, unless you ask the right questions.
  2. Economics

    Economics Basics

    Learn economics principles such as the relationship of supply and demand, elasticity, utility, and more!
  3. Options & Futures

    Henry Ford: Industry Mogul And Industrial Innovator

    This man made his dream of bringing the automobile to the masses a reality.
  4. Economics

    How Can Companies Increase Market Share?

    Companies that increase their market share enjoy a competitive advantage. They receive better prices from suppliers, and they’re able to produce goods faster.
  5. Your Practice

    Advisors on the Air: Tips for Hosting a Radio Show

    Hosting a radio show is a great way for financial advisors to reach new clients. Here are some tips on how to generate quality leads on air.
  6. Entrepreneurship

    Up-to-Six-Figure Loans a Business Can Get – Fast

    The banking industry has invested a lot of money into shortening loan approval times from a few weeks to a few minutes, but should you dive in?
  7. Your Practice

    Grow Your Referrals from Pros with These Tips

    Getting referrals from other professionals can be one of the best ways to grow your business. Here are five ways to do it.
  8. Economics

    Understanding Capital

    Capital has a variety of meanings, but it generally refers to financial resources.
  9. Economics

    Calculating Economic Profit

    Economic profit is the difference between the revenue a firm earns from sales and the firm’s total opportunity costs.
  10. Economics

    Explaining Cost Of Capital

    Cost of capital is the cost of funds used to finance a business.
RELATED FAQS
  1. Do working capital funds expire?

    Find out how and why a company's working capital can change over time, though the fund does not actually expire, and how ... Read Answer >>
  2. Does working capital include inventory?

    Learn about inventory that is part of current assets and working capital, which is the difference between current assets ... Read Answer >>
  3. Is a financial advisor allowed to pay a referral fee?

    Understand how financial advisors can legally pay a referral fee to someone for soliciting business, and learn the regulations ... Read Answer >>
  4. How does a long tail become profitable?

    Understand what the long tail concept is and who pioneered it. Learn how a company using a long tail strategy becomes profitable. Read Answer >>
  5. How do companies with a large product portfolio use BCG Analysis?

    Understand what BCG analysis is, and learn how companies use the BCG Matrix to analyze the performance of their product portfolios. Read Answer >>
  6. What are the similarities between product differentiation and product positioning?

    Learn how two marketing strategies, product differentiation and product positioning, are similar and work together to effectively ... Read Answer >>
Hot Definitions
  1. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  2. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  3. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  4. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
  5. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
  6. Economies Of Scale

    Economies of scale is the cost advantage that arises with increased output of a product. Economies of scale arise because ...
Trading Center