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留学生市场营销课程论文定制A new marketing approach to mass customisation
FRANK T. PILLER and MELANIE MU¨ LLER
Abstract. Companies today have to adopt strategies thatembrace both a closer reaction to the customers’ needs andefficiency. Mass customisation meets this challenge by offeringindividually customised goods and services with mass productionefficiency. According to a number of recent surveys, thereis evidence for the increasing importance of this strategy invarious industries. But what do the customers think? Thispaper addresses mass customisation from the customerperspective. If the market demand for customisation is notlarge enough, then all investments in a mass customisationsystem would likely be senseless. We will use the example of thefootwear industry to provide insight into the consumers’demand for customisation in regard to fit, style and functionality.Also, we will comment on the willingness to pay (WTP) forcustomised goods. The analysis is based on data from theEUROShoE market study and a meta-analysis of other
empirical studies in the field. Our analysis shows that betterfit is regarded as the most important benefit by consumers ofcustomisation, followed, by far, by style and functionality.
1. Introduction: benefits and drawbacks of mass
customisation
It is the customer who determines what a business is.In the very sense of Drucker’s (1954: 7) analysis, theindividual customer has come more deeply into thefirm’s focus than ever. Firms are faced by an uninterruptedtrend towards individualization in all areas oflife. Explanations may be found in the growing numberof single households, an orientation towards designand, most importantly, a new awareness of quality andfunctionality which demands durable and reliableproducts corresponding exactly to the specific needsof the purchaser (Zuboff and Maxmin 2003, Prahaladand Ramaswamy 2004). In particular, consumers withgreat purchasing power are increasingly attempting toexpress their personality by means of an individualproduct choice. Thus, manufacturers are forced to
create product programmes with an increasing wealthof variants, right down to the production of units of one(Cox and Alm 1999). As a final consequence, manycompanies have to process their customers individually.Precisely this is the objective of mass customisation. Inthe mass customisation concept, goods and services are
produced to meet individual customer’s needs with
near mass production efficiency (Tseng and Jiao 2001;
see also Pine 1993, Duray et al. 2000, Duray 2002, Piller
2003, Rangaswamy and Pal 2003, Reichwald et al. 2003,
Tseng and Piller 2003). Mass customisation means theproduction of goods and services for a (relatively) large#p#分页标题#e#
market, which meet exactly the needs of each individualcustomer with regard to certain product characteristics
(differentiation option), at costs roughly correspondingto those of standard mass-produced goods (costoption). The information collected during the processof individualization serves to build up a lastingindividual relationship with each customer (relationshipoption).
The differentiation option refers to a competitiveadvantage by offering customisation. In economictheory, the intent of offering customised goods and
services is to attain increased revenue by the ability tocharge premium prices derived from the added value of
a solution meeting the specific needs of a customer(Chamberlin 1962). However, the present competitive
situation in many industries prevents companies fromachieving additional profits from customisation. The
cost–benefit relation alters because buyers demandrelatively high standards of quality, service, variety or
functionality even when the sales price is favourable or,vice versa, suppliers have to meet additional requirements
in pricing when a product is highly differentiated
(Piller 2003).
Thus, the cost option of mass customisation describesprinciples to counterbalance the additional costs
Authors: Frank T. Piller and Melanie Mu¨ ller, TUM Business School, Research
Group Customer Driven Value Creation, Technische Universita¨t Mu¨nchen
(TUM), Leopoldstraße 139, 80804 Munich, Germany.
INT. J. COMPUTER INTEGRATED MANUFACTURING, OCTOBER – NOVEMBER 2004, VOL. 17, NO. 7, 583–593
International Journal of Computer Integrated Manufacturing
ISSN 0951-192X print/ISSN 1362-3052 online # 2004 Taylor & Francis Ltd
DOI: 10.1080/0951192042000273140
that are traditionally connected with high variety ofcustomised production, like set-up costs, costs of higher
qualified labour and specialized equipment, as well ascomplexity costs on all levels of planning and execution.
These principles are rooted in three areas: (1) processand product design for mass customisation follow
special design rules in relation to communality andmodularity (Jiao and Tseng 1996, Du et al. 2003). The
idea is to produce customised (flexible) products withinstable processes and structures. Mass customisation is
defined by a fixed solution space. (2) Modern informationand manufacturing technologies, such as product
configurators or dedicated planning systems, enablefirms to cope with information and planning complexity,
set-up and switching costs and transaction costsrelated to mass customisation. In this regard, mass
customisation can be seen as an application of computerintegrated manufacturing (Karlsson 2002, Anderson2003, Bullinger et al. 2003, MacCarthy et al. 2003). (3)Mass customisation opens the way to new cost saving#p#分页标题#e#
potentials, called economies of mass customisation (seePiller et al. 2004, for a detailed discussion). These
economies are the result of the integration of customerinformation into value creation, and the on-demandmanufacturing approach of mass customisation. Whilemost high variety strategies in consumer markets assumethat goods are produced in advance for defined marketniches and placed in inventory for some anonymous
customers, a mass customised product is manufacturedon demand for an identified customer after the order
has been received (Lee 1998). Thus, the company canreduce its distribution inventories and fashion risk, gain
flexibility, or get access to sticky information, enablingbetter planning and forecasting.
The relationship option of mass customisationdescribes the possibilities to increase customer loyalty.Once the customer has successfully purchased anindividual item, the knowledge acquired by the supplier
during the product configuration represents a considerable
barrier against switching the supplier (Peppersand Rogers 1997). Even if a competitor possessesthe same mass customisation skills and even if he offersa lower price, a switching customer would have to goagain through the procedure of supplying informationfor product customisation. Also, he is once again facedwith uncertainties in regard to the quality of theproduct and the producer’s behaviour. Thus, masscustomisation may increase the stickiness of a consumerto a supplier.Motivated by these promising potentials to achieving
competitive advantage, numerous companies havestarted mass customisation within the last decade. Manywell-known mass producers like adidas, Lego, Kraft
Foods, Nike or Procter&Gamble have introduced masscustomisation offerings. A recent survey by Fedex Corp.
in the apparel industry among representatives from across-section of the industry found that more than 90
per cent of the respondents agree that mass customisationwill play a more important role in the next fiveyears. But at the same time, reports on failures anddrawbacks of mass customisation come up. In October
2003, mass customisation pioneer Levi Strauss wasforced to close its ‘Original Spin’ mass customisation
programme (Piller 2004). There is a growing debate onthe drawbacks and limits of mass customisation, andanalyses continue on the possible reasons behind thesefailures (Huffman and Kahn 1998, Agrawal et al. 2001,
Zipkin 2001, Piller and Ihl 2002, Piller et al. 2004).Problems previously addressed include: investment
costs, production planning and control, product
architectures or the qualification of workers.
This paper addresses the challenges of mass
customisation from yet another perspective: the view
of the market and that of the customer. This has simply
one reason: if the market demand for customisation isnot large enough, and if consumers are not willing to
pay for the extra benefits of customisation by meetingheir individual desires and wishes, then all investments#p#分页标题#e#
in research and implementation of mass customisationwill be sunk costs. In this regard, three research
questions seem of particular importance:. Do consumers want customised products and
services anyway?
. What dimension and what extent of customisationdo consumers want in which market segments?
. Are consumers willing to pay a premium for
customisation?The objective of this paper is to provide insights into
these questions; tackling the basic assumption that
investing into customised manufacturing is beneficial,per se, from a market point of view. After presenting
the empirical background of our research, we will try toanswer these questions. Our paper ends with a
discussion of the limitations of consumer research inthis field. In regard to the focus of this special issue of
the International Journal of Computer Integrated Manufacturing,our main field of argumentation will be the
footwear sector. However, we think that many of ourfindings can be transferred to other consumer goodproducts as well.
2. Empirical background
The following argumentation builds on three main
sources: two of own surveys on consumer demand for
584 F. T. Piller and M. Mu¨ ller
mass customisation, and a meta-research of previous
studies in the field.
First, we will use primary data gathered within the
EuroShoE project EuroShoE is
funded by the European Commission to introduce mass
customisation in the European footwear industry bybuilding an extended enterprise of footwear manufacturers,suppliers and retailers (Boe¨r and Dulio 2003).
Within this project, an exploratory market study shouldestimate the market potential for mass customised
footwear in different European markets. Footwear isrelated to ‘everyday’ or ‘formal’ (business) shoes (butno sports, special purpose or children shoes). Based onexpert interviews and focus group discussions, aconsumer questionnaire among 420 customers was
run in 2001 in four European target countries(Germany and the UK representing Northern Europe;Spain and Italy representing Southern Europe). Giventhis small sample size (due to funding constraints), theesults from this study are not representative but ratherexploratory. However, the tendencies of the resultswere confirmed by various expert interviews and theresults of other studies in the field. It is important tonote that the respondents were not drawn from thegeneral public, i.e. representing the full population ofone country, but that the samples were based on a preselectionof target groups that seem to be most likely torespond to the idea of customisation of footwear. Thesetarget groups were defined on the basis of national
consumer typographies of the four target countries (see
EuroShoE Consortium (2002) for a detailed descriptionof this methodology and its limitations).
Second, we will present data from another study inthe footwear Industry. Subjects of research werecustomers of selve AG, a Munich, Germany, basedmanufacturer and retailer of customised ladies shoes#p#分页标题#e#
We conducted two surveys, one with
potential buyers exploring the offerings at the point of
sale (n = 213), and a second on existing customers of
the company (n = 155). Data for the first survey was
collected in interviews in summer 2003, for the second
survey with a mail questionnaire in autumn 2003
(EwoMacs 2003).
Third, we analysed a number of earlier studies on
demand and willingness-to-pay (WTP) of consumers for
customised goods. Table 1 provides a summary of these
sources. Studies were identified by literature and
internet research (see also Franke and Piller 2003,
Table 1. Empirical research on customer demand for mass customization
Author (Research) question Research design, subjects of research
Dellaert and
Stremersch (2003)
What influences consumers’ choice whether or not
to participate in different mass customisation
processes?
Survey and experiments (online consumer panel of
n = 431).
EuroShoE
Consortium (2002)
What is the market for customisable shoes in
Europe (considering four target countries in
Europe: Germany, UK, Spain and Italy)?
Survey among consumers (n = 420) in Italy,
Germany, Spain and the UK expert interviews
(n = 40), focus groups with consumers (n=16
with about ten participants per group).
EwoMacs (2003) What are the demands on a mass customisation
offering from a consumer’s point of view?
Survey among female mass customisation
customers (n = 155) and female consumers
without mass customisation experience (n = 213).
Franke and
Piller (2004)
How differs willingness to pay (WTP) between userdesigned
products and standard products? Does
‘mass confusion’ affect WTP?
Survey and experiments among customers (n = 165,
n = 155, n = 220).
Franke and
von Hippel (2003)
What affects the satisfaction experience of users
who modify their own product?
Survey among users of a software application
(n = 138).
Kamali and
Loker (2002)
What influences satisfaction and WTP of consumers
using online mass customization toolkits?
Survey and experiments among consumers (n = 72).
Kieserling (1999) What is the market for customisable women shoes
in Germany?
Survey among consumers (n = 800).
Huffman and
Kahn (1998)
Does complexity inherent with a wide number of
options lead to customers’ dissatisfaction (mass
confusion)?
Survey and experiments among consumers (n=79
and n = 65).
Outsize (1998) What needs do customers have when buying clothes
and shoes?
Survey among customers (n = 80).
Piller, Ho¨nigschmid
and Mu¨ ller (2002)
What is the WTP for customised products (clothes,#p#分页标题#e#
shoes, wristwatches, cell-phone covers, jewellery)?
Online survey among consumers (n = 2400, sub
sample with n = 600 younger participants between
20 and 29).
Zitex (1999) What is the demand for and WTP for customisable
clothes for men and women in Germany?
Survey among consumers (n = 1173).
New marketing approach to mass customization 585
Piller et al. 2004). Compared to other ‘over researched’
areas of marketing, it was astonishing that there is only a
small number of empirical studies on the demand for
customised products and services. Here, further research
is needed.
3. Do consumers want customised products and
services anyway?
It is a commonplace to state that customer preferences
in many markets are heterogeneous and change
quickly (see for example Cox and Alm 1999, Prahalad
and Ramaswamy 2004, Zuboff and Maxmin 2004). to
date, there are only few studies that quantify heterogeneity
of user preferences. In an empirical study of
software, Franke and von Hippel (2003) show that users
in fact have very unique needs, leaving many displeased
with standard goods. Users claimed that they were
willing to pay a considerable premium for improvements
which satisfy their individual needs. In a meta-analysis of
published cluster analyses, Franke and Reisinger (2003)
found evidence that this dissatisfaction is not an
exception. Current practice in market segmentation
generally leads to high levels of total variance, left over as
in-segment variation (over 50 per cent on average). The
reason for this dissatisfaction can be seen in the missing
capability of mass or variant manufacturing to respond
to individual needs regarding the desired ideal product
of individual customers. Standardized products are
produced on-stock, meeting only the mean preferences
of an average customer in a market segment. This
留学生市场营销课程论文定制A new marketing approac to mass customisation
implies that a major group of customers stays somewhat
dissatisfied with standard offerings, even when it comes
to what seem to be mature markets.
This general finding is confirmed by the Outsize
(1998) study, analysing consumer needs when buying
clothes and shoes. The study’s objective was to learn
more about the difficulties that customers experience
when buying outsize apparel. According to this study, fit
is the most important issue, followed by quality and
design. Deficits in matching fit and style (aesthetic
design) were identified especially in the up-market#p#分页标题#e#
‘smart’ segment. The study concludes that the variety of
clothes and shoes provided today is not sufficient to
fulfil the heterogeneous needs of customers.
The Zitex (1999) study asked German customers
explicitly for their desire for customisation of apparel.
The study showed that today’s customers are unsatisfied
with the availability of sizes and the fit of standard
clothes. More than 70 per cent of formal wear bought
from the rack is altered after the purchase at the
customers’ expense! 65 per cent of the interviewees 65
per cent expressed a strong need for customisation in
regard to custom fit (measurements) for suits and
formal dresses.
The EUROShoE data confirm that a considerable
number of consumers are interested in the idea of
customising shoes. Figure 1 shows the aggregated results
across all countries in the survey (Germany, the UK,
Figure 1. Consumer interest in customised footwear on a scale from 1 ( = very interested) to 7 ( = not interested), aggregated
results of the four target countries (Germany, the UK, Italy and Spain).
586 F. T. Piller and M. Mu¨ ller
Spain and Italy). According to the data gathered, 41 per
cent of women and 31 per cent of men are very much
interested in customised footwear, whereas 33 per cent
of the female and 28 per cent of the male respondents
completely reject the concept. This data indicates a
strong trend: consumers either like customisation, or
they do not like the idea. Compared to other studies
using seven-point likert scales, we have very little answers
in the middle, but either a very strong acceptance or
strong rejection of the idea of customisation.
However, there seem to be large differences in
consumers’ attitudes depending on gender and the
country of origin. Concerning the country of origin, our
data shows a significantly higher interest in customised
footwear in the northern than in the southern European
countries. Figures 2 and 3 show the differences
concerning the interest in customised footwear in larger
detail. In Northern Europe (represented by Germany
and the UK), the interest in customisation of shoes is
comparatively high (figure 2), whereas in Southern
Figure 2. German and UK consumer interest in customized footwear on a scale from 1 ( = very interested) to 7 ( = not interested).
Figure 3. Spanish and Italian consumer interest in customized footwear on a scale from 1 ( = very interested) to 7 ( = not interested).
New marketing approach to mass customization 587
Europe (represented by Italy and Spain) customisation
seems to be of less importance (figure 3). According to
our expert interviews, the selection (variety) of footwear
offered in Italy is much wider, and with higher fashion
content than in other European countries. Therefore,#p#分页标题#e#
the need to alter given models, or even design shoes on
their own, do not seem to be an issue for these
consumers. Also, data from our focus group interviews
show a much higher fashion and trend consciousness of
Italian and Spanish consumers, leading to the rejection
of customised shoes which were, per definition, not
regarded as following the fashion standard of the
season. This implies that footwear manufactures aiming
at differentiation by customisation should try to make
the act of customisation as a fashion item (Piller and Ihl
2002) – meaning that big fashion brands will have an
advantage in introducing customisation as a point of
differentiation in fashion.
In all four countries, women seem to generally be
more interested in the customisation of footwear than
men. Men are less interested in customisation than
women in all target countries except Spain. This finding
is of particular importance as according to our knowledge
today most efforts of footwear manufacturers
regarding customised footwear focus the men market
only. One explanation for the larger interest of women
that was mentioned frequently in our expert interviews
could be that men are likely to buy shoes only when
they actually need them, and in a time efficient way.
Thus, they object the necessity to wait for the
customised shoe being produced. Moreover, men seem
to be more satisfied with the standard offerings in
European shops in regard to style and design. On the
contrary, for women shoes are a major fashion
accessory that has to go with their latest clothing. Thus,
the fashion content is much more important – resulting
in a stronger interest in style customisation (see next
section). Additionally, women encounter comparatively
more difficulties in regard to fit and comfort due to the
design of women’s shoes (e.g. high heels, pointed toe),
dictated by fashion trends rather than by biomechanical
suggestions (Luximon et al. 2003).
Based on the data presented above, a rough
estimation of the potential market volume for customised
footwear in the four target countries can be given
(table 2). Note that this estimation is by definition very
exploratory in its result and does not represent
empirically valid the actual size of the market for
customised shoes. Using various sources of information
on consumer typographies, market segmentations and
market volumes in the footwear industry (see EuroShoE
Consortium [2002] for more information), the number
of consumers interested in customised footwear,
according to our study, was transferred into a quantitative
market volume (pairs of shoes). The data show
that there is an enormous market potential for
customisation that is not covered by existing offers#p#分页标题#e#
yet. In our opinion, even one tenth of these volumes
would justify major investments in an otherwise very
mature and price competitive market with very little
real innovation.
4. What extent of customisation do consumers want?
The previous studies have shown that there might
be a promising market for customised offerings.
However, customisation has to be customised, too.
Mass customisation is characterized by a fixed solution
space, meaning that the customisation options are
restricted and not unlimited as in the case of traditional
craft customisation (Pine 1993, Lampel and Mintzberg
1996, Robertson and Ulrich 1998, Tseng and Jiao 2001,
Piller 2003). Thus, setting the right extent of a mass
customisation offering is of paramount importance.
Generally speaking, customisation can be carried out
on three levels:
. Style (aesthetic design): modifications aiming at
sensual or optical senses, i.e. selecting colours,
styles, applications, cuts or flavours. Often, individuality
is seen only in this dimension (Tepper et
al. 2001). Examples in footwear include the ‘ID
program’ of Nike where customers can select
Table 2. Market potential for customised shoes in the four target countries (‘everyday’ and ‘business’ shoes, but no sports, special
purpose, or children shoes); general market data taken from SATRA.
Market volume for mass customized shoes (million pairs p.a.)
Male Female Total Pairs of shoes sold p.a. in the country
Germany 12.3 32.8 45.1 326.3
UK 11.2 29.2 40.4 315
Italy 2.2 10.2 12.4 216.5
Spain 2.2 4.8 7.0 133.8
588 F. T. Piller and M. Mu¨ ller
between various styling and colour options for
otherwise standard models.
. Fit and comfort (measurements): customisation
based on the fit of a product with the dimensions
of the recipient, i.e. tailoring a product according
to a body measurement or the dimensions of a
room or other physical object. This is the
traditional starting point for customisation (tailoring).
In the footwear industry, individual fit
can be received by two options: either, the shoe is
real made-to-measure based on a customised last
according to the feet measurements of an
individual customer. Or the feet measurements
of an individual customer are matched to an
existing last (from a large library of lasts), and
then the shoe is produced on demand. Applications
in the footwear include selve’s ladies shoes
or the ‘mi adidas’ sport shoes programme of
adidas–Salomon (both ‘match-to-last’), or John
Lobb from London (hand crafted made-tomeasure).
. Functionality: customising option in regard to
functionality or interfaces of the product, i.e.
selecting speed, precision, power, cushioning,#p#分页标题#e#
output devices, etc. of an offering. Functionality
is often overseen when mass customisation is
addressed. Applications in the footwear industry
include again the mi adidas mass customisation
offering where customers, e.g., can select the
insole and cushioning according to their running
preferences.
The cost option of mass customisation demands that
options or adjustments are only offered for those
product features where customisation is valued by the
users. Thus, the critical question is: which characteristics
of a shoe are vital from the customer’s point of
view? A starting point to answer this question can be to
analyse the difficulties customers encounter when
buying standard shoes. According to the EUROShoE
consumer survey, men report that they are not able to
find a shoe to completely match their idea of a perfect
product, due to a wrong design (62 per cent), fit (i.e.
width, pinching; 51 per cent) or dissatisfaction with the
price–quality ratio (37 per cent). Fewer difficulties are
encountered regarding the unavailability of the right
sizes (28 per cent) or due to medical/orthopaedic
reasons (5 per cent). For women, most difficulties in
finding shoes that completely satisfy their needs are
encountered due to design (63 per cent) and almost of
similar importance fit (59 per cent). Also, a missing
price–quality ratio seems to be a critical reason for
womens’ dissatisfaction (47 per cent). Fewer difficulties
are reported in regard to durability/quality (24 per
cent) or medical/orthopaedic reasons (15 per cent).
However, the latter value is significantly higher than the
corresponding value for men. In regard to country
differences, the overall degree of dissatisfaction is the
highest in the UK and the lowest in Spain. In Italy, the
level of dissatisfaction is largest between women and
men. This data provides a number of starting points for
market differentiation by customisation, as both personal
style and fit can be improved significantly by
customisation.
Furthermore, we asked the participants that reported
an interest in customisation of shoes, per se,
which customisation options they would prefer (table 3,
showing mean values). For both men and women, fit
was most important, followed by design and functionality.
Note that all three means are rather close together
(section A). Thus, we analysed the different customisation
option in larger detail (section B). Here, the
largest differences between women and men are the
evaluation of the value of customising the heel (length)
and the possibility of aesthetic customisation by the
application of ornaments or patterns. These results
were confirmed in the focus groups interviews, too.
Men and women share preferred customisation#p#分页标题#e#
options such as colour, material or foot bed. Others
(heel and ornaments) are only of importance for
women. This confirms common sense. One of the main
insights from the survey is that fit, comfort and style
(design) customisation are considered almost equally
important for customisation. Deeper analysis of customer
needs in the focus group discussions, however,
indicates that fit and comfort are the most important
criteria in the consumers’ buying decision while colour,
material and the heel length are considered as
interesting but not vital parameters for customisation.
The female respondents in our sample regard custo-
Table 3. Importance of selected customization parameters:
Aggregated results of the four target countries (consumers
interested in customization only).
Male Female
(1) Design 5.70 5.85
(2) Functional features 5.50 5.50
(3) Fit 6.25 5.80
(2) Foot bed 5.00 4.95
(2) Sole 4.60 4.90
(1) Fastening mechanism 4.05 3.80
(1) Heel 3.70 5.35
(1) Ornaments 2.35 3.25
(1) Upper/material 5.20 5.20
(1) Colour 5.25 5.15
Importance of customization (1 = not very important; 7 = very
important).
New marketing approach to mass customization 589
misation as a means ‘to make the fashionable shoe
more comfortable’ and to improve the price–quality
ratio of customisation. They are more or less satisfied
with the footwear designs offered today, but no longer
want to compromise when it comes to style and fit
(confirmed by the focus group discussions). This
conclusion is confirmed by other studies on consumers’
demands for individualization of apparel and footwear
(Kieserling 1999, Zitex 1999, EwoMacs 2003). These
studies conclude that the most important benefit of
customisation for these goods is to minimize today’s
compromise between fit or comfort and design.
In the following, we will stress this finding with some
results from the market research we conducted with the
potential and present customers of selve, a Munich based
company offering customised ladies shoes. In contrast to
the EUROShoE study, only subjects that had already
some real life experiences with customised shoes were
questioned. Thus, we expect that these results have a
higher validity than the EUROShoE study. From the
participants of the first survey (n = 213), women asked in
the shop after they have explored the system (customisation
options, style options, measurement procedure) but
leaving without purchase, 82 per cent state that they can
imagine much or very likely to purchase a pair of
customised shoes. Only 18 per cent claimed to have no
interest at all. These acceptance figures are much higher
than the EuroShoE results, stressing the importance of#p#分页标题#e#
consumer education and educational advertising explaining
the possibilities and process of customisation
from the consumers’ perspective (Wind and Rangaswamy
2001, Piller 2003). In a second survey, we asked
existing customers of selve about their feedback on
buying a pair of customised shoes (n = 155). The subjects
stated that design (style, colour and heel) and the
custom fit were equally important for their decision to
purchase a customised pair of shoes. Many customers
indicated explicitly the possibility to combine custom
design with fit as the most important purchase factor.
Thus, customisation should not be restricted to the
‘fitting’ aspect, as it is common today formany up-market
craft customiser (traditional shoemaker) of footwear.
In conclusion, a set of customisation options for
footwear should start with an inline (standard) shoe
model that can be ordered in individual measurements.
From an analysis of the order data of selve we know that
many orders (440 per cent) are placed with different
sizes for the right and left shoe (the same was
confirmed by adidas within their mi adidas system).
This is an option that no standard shoe can offer today.
In addition, the customers should become enabled to
alter also a limited number of options within the most
important design and style parameters (i.e. colour,
material, heel, foot bed and sole).
5. Are consumers willing to pay a premium for
customisation?
One of the most challenging questions of mass
customisation is if, and to what extent, consumers are
willing to pay a premium for customisation. For
customers, the decision to buy customised products is
basically the result of a simple economic equation
(Franke and Piller 2003): if the (expected) returns
exceed the (expected) costs, the likelihood that
customers employ mass customisation will increase.
Returns are twofold: first, possible rewards from a
special shopping experience such as flow experience or
satisfaction with the fulfilment of a co-design task
(Dellaert and Stremersch 2003; Franke and Piller
2003), and, second, the value of product customisation
(i.e. the increment of utility a customer gains from a
product that fits better to his needs than the best
standard product attainable). The data presented in the
previous sections has shown that a large number of
consumers expect returns in this respect. Costs of mass
customisation for consumers are: (1) the premium a
customer has to pay for the individualized product
compared to a standard offering; and (2) the drawbacks
of the customers’ active participation at (integration
into) value creation during the configuration process
(increase in ‘mass confusion’, i.e. purchasing complexity,#p#分页标题#e#
uncertainty, co-design risk, etc.; see Huffman and
Kahn 1998, Kamali and Loker 2002, Dellaert and
Stremersch 2003, Piller et al. 2004). In the following,
we will focus on the first cost aspect the premium a
customer has to pay for the customised product
compared to a standard offering.
In the EUROShoE study, we asked people for their
WTP for customised footwear. The majority of male (46
per cent) and female (42 per cent) respondents
answered that they would accept a premium of 10 to
30 per cent on top of the average price of a formal shoe
(figure 4). Approximately 40 per cent of the men and
35 per cent of the women accept a maximum premium
of 10 per cent only (including subjects who are not
willing to pay any premium or even want to pay less to
counterbalance waiting time). However, about 12 per
cent of the men and 18 per cent of the women are
willing to pay a premium of 30 per cent or more.
In all target countries, we found that the majority of
customers reported to accept a premium of between 10
and 30 per cent (except for women in Spain and men
in the UK where the peak is in the 5–10 per cent
range). Spain was the country with the lowest WTP for
customised shoes (47 per cent of the female and more
than 62 per cent of the male interviewees would not
accept a premium of more than 10 per cent). In Italy,
the average WTP was higher than in the other
590 F. T. Piller and M. Mu¨ ller
countries. More than 36 per cent of the women, and
more than 26 per cent of the men would accept a
premium higher than 30 per cent, and a premium
niche of about 13 per cent women would even accept a
premium of more than 50 per cent! The corresponding
values in the other countries are significantly lower.
These findings also match the average price levels of
standard footwear in the target countries (SATRA
data): if the average price level in all four countries is
set to an index value of 100, Italy has the highest
average price level with an index value of 108.5, the UK
the lowest with 93.4, Germany 93.5, and Spain 99.3.
Results of an online survey among 600 young
consumers (Piller et al. 2002) show a much higher
WTP for customised footwear (this study used a refined
methodology, ‘price sensitivity measurement’, to measure
WTP). Both women and men reported a considerably
higher WTP for the possibility to get an
individual fit (measurements). As far as style customisation
for footwear is concerned, the results were somewhat
different. While the optimal price for style
customisation for women is clearly above the average
price for a standard pair of shoes, men’s WTP for style
customisation is lower than that for standard shoes. On
the other hand, to women the idea of a customised#p#分页标题#e#
design seems to be rather appealing (Piller et al. 2002,
for exact data).
In an exploratory study in the watch market (Swatch
alike fashion watches), Franke and Piller (2004)
performed a set of four experiments with a total of
717 participants, in which users created their own
customised watches. The self-designed watches are
highly heterogeneous and diverse in style, confirming
the trend reported in the literature, that today’s users
have very distinct preferences. From an economic point
of view, the most important finding of this study is that
consumers are also willing to pay a considerable
premium: the WTP for a self-designed watch exceeds
the WTP for standard watches by far, even for the bestselling
standards (Swatch models) of the same technical
quality. On an average, this study reports a 100 per cent
value increment for watches designed by users compared
to standard watches from the same segment.
However, measuring WTP by means of questionnaires
is rather difficult and often leads to unrealistic
results (Franke and Piller 2004). Consider the case of
adidas and selve who are already offering customised
shoes. Both companies target average upmarket (but
no luxury) market segments. In the sports shoe
market, adidas can charge premiums of up to 50 per
cent (on the suggested retail price, even more on the
street price) for its customised shoes. The reason can
be seen in the whole set of customisation options:
adidas allows customers not only to choose between
various colours and to put a name on the shoe, but
also to customise the shoes with regard to comfort, fit
and functionality. Its competitor Nike, offering just
style customisation with its ID programme, can ask
only premiums of 10 per cent. The average selling
price for ladies shoes at selve is above e180 – this is a
more than 100 per cent premium to the average
selling price of a pair of shoes in the local upmarket
market segment.
This experience is confirmed by other retailers.
Cove, for example, offers in the German market
customised suits for an advertised price of approx.
e330. However, most customers are ‘upgrading’ their
product during the co-design (configuration) process
by choosing better fabrics or additional features. As the
result, the average selling price is above e600 – far
above the price conception Cove’s customers had when
entering the store!
The last aspect relates to the possibilities of ‘price
customisation’ by allowing customers to adjust their
own price by selecting differently priced options for one
product feature. Levin et al. (2002) compare the price
effects of customisation to how price customisation is
performed. They find for various consumer products#p#分页标题#e#
that a subtractive option-framing method is superior
(i.e. leads to higher average prices) compared to an
additive-framing. Subtractive option-framing means
that consumers start with a fully loaded product and
delete options, while additive option-framing means to
start with a base model and add options. The data by
Levin et al. (2002) show that subtracting leads to a
higher price (WTP). This provides an indication of the
additional value of offering customisation not only on
the product level, but also on the option level, and how
to skin this value.
Figure 4. Accepted premium for customized formal shoes;
aggregated results of the four target countries; consumers
interested in customization only.
New marketing approach to mass customization 591
6. Limitations and conclusion
The mass customisation landscape today reveals a
somewhat sobering picture. The opportunities of mass
customisation are acknowledged as fundamentally positive
by theory and anecdotal evidence for many years. A
growing number of companies are already successfully
operating this kind of business model. However, a deficit
exists in analysing the consumer perspective on mass
customisation (Kamali and Loker 2002, Dellaert and
Stremersch 2003, Franke and Piller 2003). Thus, the
objective of this article was to review a number of
empirical insights into the consumer perception of mass
customisation. Focusing on the footwear industry and
data from the EuroShoE study we can conclude that
consumers are curious about the customisation concept
and do realize the related benefits. They are also willing
to pay a premium for these benefits. A first estimation
suggested a market potential of about 40 million pairs of
customised shoes both in the UK and in Germany, 17.7
million pairs in Italy and 7 million pairs in Spain. Even if
mass customisation is not becoming the dominating
system, these are no niche markets, but promising
market segments, totally uncovered today. Especially
female consumers seem to be willing to invest in
customisation, so that they do not have to compromise
between fit and style any longer.
Some challenges have to be taken into account.
Empirical research on consumer demands for mass
customisation faces one important limitation, restricting
the interpretation of the findings: the majority of
the research subjects had no hand-on experience with
customisation. Already, surveys concerning consumer
purchasing behaviour of standard goods face numerous
biases due to the survey situation, and these biases are
exponentiated in the case of customised goods. Most
consumers have an imagination about customisation,
but no experience with it. They will answer positively
when asked if they would (could image to) purchase a#p#分页标题#e#
good customised to their individual wishes and desires.
But are they also willing to wait for the product until it is
produced? Will they trust the supplier and pay for a
product in advance that they do cannot see? Only data
gained from observing consumers in real purchasing
situations will provide evidence on the real market for
mass customisation. Thus, more pilot studies and test
markets for mass customisation are needed. First steps
are focus group discussions and experiments in market
research labs, where the participants can at least
experience the purchasing and configuration process.
In the end, it is very important to remember the
words of Pine (1998: 14): ‘Customers don’t want choice.
They want exactly, what they want.’ Customers are not
buying individuality; they are purchasing a product or
service that fits exactly to their needs and desires. Only
few customers honour long configuration processes.
Most users want to find their fitting solution as smooth
and simple as possible. Mass customisation concepts,
based primarily on the promise of customisation, will
fail (Piller and Ihl 2002). Successful customisers stress
fit, comfort, higher functionality, lower costs of ownership
and so on. From a marketing perspective, mass
customisation means to offer its customers not any
longer a product, but the capability to deliver an
individual solution. The customer becomes a codesigner,
using the firm’s capacity to create his own
unique solution. Thus, the experience of the buying
and configuration process gets predominant importance.
Here, many companies have still their lessons to
learn, beyond all achievement and research on
computer integrated manufacturing and flexible manufacturing
systems enabling mass customisation.
Acknowledgments
This paper builds on research conducted in the
EuroShoE project under a grant by the European
Commission and research conducted in course of the
EwoMacs project, supported by the German Federal
Ministry of Research (BMBF-PFT). We further thank
Michael Uhl and Stephan Ja¨ger for their support.
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