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 products with the low unit costs associated with mass production. Mass customization products may also be referred to as made to order or built to order.

BREAKING DOWN 'Mass Customization'

Mass customization allows a customer to customize certain features of a product while keeping costs closer to that of mass-produced products. In some cases, the components of the product are modular. This allows customers to combine different options to create a semi-custom final product. Many applications of mass customization include software-based product configurations that allow end users to add or change certain functions of a core product.

Mass Customization Offerings

Most products created based on the mass production model start with a base package that customers can add to, subtract from or alter to suit their needs or tastes. Mass-customization products are generally made to order, but they are based on templates to allow production companies to keep costs lower than truly custom pieces.

Examples of Mass Customization Product Lines

Certain furniture companies offer mass customization by offering multiple options for various components or features. This can include different fabrics, furniture legs or sectional pieces that can be combined in a large number of configurations. Modular home builders also use mass-customization models by allowing customers to make changes to base home packages.

Mass Customization: The New Frontier in Business Competition

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

• Collaborative customization refers to companies that work in partnership with individual customers to develop precise product offerings to suit each customer's needs.

• Adaptive customization includes companies producing standardized products that the end user can customize.

• Transparent customization refers to companies who provide unique products to individual customers without overtly stating the products are customized.

• Cosmetic customization includes companies that produce standardized products but market the products in different ways to various customers.

Pine focused on the concept of creating a small number of interchangeable pieces that can be brought together in a large number of ways. This aims to produce a cost-efficient production model while allowing customers to pick and choose how the pieces went together. This allows customers to achieve a higher level of satisfaction from the product while simultaneously keeping costs lower for both the production company and the customer purchasing the final product.

RELATED TERMS
  1. Mass Production

    Mass production if the manufacturing of large quantities of standardized ...
  2. Mass Market Retailer

    Mass market retailer is a seller of consumer goods that are priced ...
  3. Customer

    A customer is an individual or business that purchases the goods ...
  4. Critical Mass

    Critical mass is the point at which a growing company becomes ...
  5. Mass Payment

    Mass payment is a method of paying multiple recipients online ...
  6. Customer Relationship Management ...

    Customer relationship management (CRM) is a term for the principles, ...
Related Articles
  1. Retirement

    Saving Toward and Maintaining Your Retirement Goal

    Your retirement plan should include deciding how much money you need to save, how you will save it, and how you will maintain it.
  2. Tech

    How Big Data Has Changed Marketing

    Big data has enabled marketers to enhance their customer engagement and customer retention strategies by providing insight into behavior and thoughts.
  3. Financial Advisor

    Be A One-Stop Shop For Your Clients

    Offering a comprehensive suite of financial services can bring in business, but coordination and customization are key to success and customer retention.
  4. Small Business

    How to Make $1 Million in Your Small Business

    Learn how to help make your million dollar small business dreams a reality. Find out what steps you need to do for you to reach this financial goal.
  5. Investing

    5 Things Frontier Communications Wants You to Know (FTR)

    The telecom industry is well known for its lucrative dividends, and rural telecom specialist Frontier Communications (NASDAQ: FTR) has one of the best dividend yields in the stock market. Frontier's ...
  6. Investing

    Twitter Aims to Humanize Customer Service Dealings

    Twitter wants you to know when you are dealing with an actual human on the other end of that DM.
  7. Insights

    How Online Banking Is Overtaking Traditional Banking

    Is traditional banking doomed to be surpassed by online banking?
  8. Financial Advisor

    Financial Advisors: Avoid These Marketing Mistakes

    Effective marketing can be the difference between your business succeeding or failing.
  9. Tech

    10 Industries Forever Changed By Mobile Apps

    Mobile apps and services have forever changed the way that some industries operate.
  10. Investing

    Top 3 Customer Experience Companies (PG)

    Have the top three customer experience companies rewarded their investors?
RELATED FAQS
  1. How does a merger affect the customer?

    Learn how a merger may affect customers of the industry. The effects of mergers may be positive or negative, but there's ... Read Answer >>
  2. How did mass production affect the price of consumer goods?

    Discover how mass production has affected the price of consumer goods throughout recent history. The automotive industry ... Read Answer >>
  3. What is the difference between cost and price?

    Cost is typically the expense incurred for a product or service being sold by a company. Price is the amount a customer is ... Read Answer >>
  4. What impact does brand equity have on profit margins?

    Learn how both positive and negative brand equity affects profit margins by influencing profit per customer, sales volume ... Read Answer >>
  5. What are the Four Types of Economic Utility?

    Understand the four main types of economic utility that apply to transactions between consumers and businesses: form, time, ... Read Answer >>
  6. What strategies do companies employ to increase market share?

    A company's market share is the percentage it controls of the total market for its products and services. Learn about the ... Read Answer >>
Hot Definitions
  1. Futures Contract

    An agreement to buy or sell the underlying commodity or asset at a specific price at a future date.
  2. Yield Curve

    A yield curve is a line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but ...
  3. Portfolio

    A portfolio is a grouping of financial assets such as stocks, bonds and cash equivalents, also their mutual, exchange-traded ...
  4. Gross Profit

    Gross profit is the profit a company makes after deducting the costs of making and selling its products, or the costs of ...
  5. Diversification

    Diversification is the strategy of investing in a variety of securities in order to lower the risk involved with putting ...
  6. Intrinsic Value

    Intrinsic value is the perceived or calculated value of a company, including tangible and intangible factors, and may differ ...
Trading Center