SM Essay 2 - Real-time service management issue- The challenges of mass customization: This PDF

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Real-time service management issue- The challenges of mass customization: This essay examines the literature regarding customization to develop an understanding of the challenges organisations face to offer an efficient service by taking a look at the analytical frameworks available. These framework...

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B061608 30/11/2017 Dr Sophie Flemig Words 1490

Real-time service management issueThe challenges of mass customization:

The idea of mass customization is a modern day practice that has become a vital source of competitive advantage. Defined formerly “as a process that changes the functionality, interface, information content,

or distinctiveness of a system to increase its personal relevance to an individual” (Blom, 2000) and more recently “a process for aligning an organization with its customer's needs” (Salvador et al. 2009). The feeling provided to a consumer is that of variety, novelty and creative expression (Blom and Monk, 2003) and this allows organisations to add value through the quality of service they can provide in terms of the overall experience users feel by customizing products and the ability to meet these demands. Ensuring consumers feel the perceived benefits that arise from customization are key to success and are where organisations have to focus on to offer a dynamic and productive customization service (Merle et Al. 2010). This essay will examine literature regarding customization to develop an understanding of the challenges organisations face to offer an efficient service by taking a look at the analytical frameworks available. These frameworks will then be put into practice comparing Nike and Puma to see specifically the obstacles they have to overcome to provide a successful customization service. The literature around service design is ever growing especially in regards to mass customization. Martin (1997) found that early adopters of customization kept it simple and mainly focused on the perceived benefits the product would provide consumers. Further research into how to be successful in online retail showed that “ease of use and convenience” where the most important factors for consumers followed by having a “large selection of products available” (Neilson, 1999). The original ideology around customization was that it should be a straightforward process with the designed product as the main focal point to add value to the consumers. As time went by, research developed in regards to mass customization. An academic paper (Fiore and Lee, 2001) looked into the whole experience of designing your own product and that it would provide users with a stimulating experience arisen from excitement of using technologies and the thrill of being involved in the creative process. In addition, a research questionnaire involving 186 participants concluded that the higher the enjoyment process was for users of a customization service, the higher the perceived value of the product would be (Franke and Schreier, 2006). This more contemporary research suggests that the service design is becoming more important to users and the experience and enjoyment gained from designing your product was also a key source of added value and why users are willing to pay a premium for products designed by themselves. The finished product was still an essential part of the process but as technologies advanced there had become a greater emphasis on the design process providing satisfaction for consumers. This approach of looking into the benefits of the service design of mass customisation led to research into the idea of mass customisation (MC) toolkits. An MC toolkit is a user-friendly design tool that allows users to innovate and design products through a trial and error basis (Von Hippel, 2001). Data showed that for a toolkit to be successful it had to find a balance between giving users the feeling of autonomy in designing their own products (Merle et. Al 2010) whilst also providing support in the design process to avoid mass confusion and over complexity in the decision making process (Dallaert and Stremersch, 2005). Creating an ideal toolkit is a complex process to find this balance, giving endless options for users to design will not only cause confusion but will be too costly for the organisation to implement into its production capabilities. A contemporary study found that to find this balance companies should integrate a sense of peer input into the tool-kit process, knowledge from users who had used the design tool previously stimulated favorable outcomes and provided new users with external feedback into the process (Franke et. Al 2008). The literature outlined shows how there have been developments to a more service dominant process that focuses on providing user satisfaction from the creative and design process. User toolkits are an essential interface for user’s designing their own products and it is important to find the balance between

complexity and creative autonomy, perhaps which could be answered by adding peer input to aid with the design process.

The literature has provided a framework for how a customization service can be successful. It outlined how a service design toolkit has to find the right balance between providing autonomy for users to design their own products, whilst also not being too complicated and confusing to use. Puma and Nike are two of the biggest apparel organizations and have both introduced their customization services to the market. Below is a table that shows their customers journey from pre purchase to post purchase, evaluating various components between the two brands.

Puma’s Mongolian BBQ:

Nike ID:

Low awareness and not well known as a service, online service still in development stage and only available in a few selected countries.

High awareness and very well-known that is popular on a large scale.

Not very established as a brand, lack of trust that will take time to build up.

Well established and trusted brand bui over time, strong relationship with use

Lack of creative autonomy due to low number of specifications available to design – limits satisfactory experience from designing own products. Although Mongolian BBQ is a unique “menu style” toolkit that makes it stand out.

Well-balanced service- Easy to use too high autonomy over design specificati provides satisfactory experience and h quality products.

2. Variety-

Shoes available to customize limited to fashion range – limits target market and number of sales for Puma.

Wide variety of shoes available to cus including fashion and sport ranges.

3. Peer support-

As less established as a service the support network is also limited, a few online forums but no official website to help new users with functionality.

Nike talk an official Nike website allo to post ideas online. Users can ask and advice to other consumers about previ purchased orders or new ones.

Support is provided to help with returns and contact details available for any enquiries.

Specific parts of Nike website dedicat helping users with post purchase enqu as returns.

Users found that Puma’s service was unique in what it offered but was just too limited as an overall experience.

Nike’s experience is usually that of a f outcome and results in repeat purchas their customization service.

Pre-Purchase: 1. Awareness-

2. Brand imagePurchase: 1. Service design/Toolkit-

Post purchase: 1. Customer support-

2. User’s experience-

From the table it’s clear that Nike has mastered the customization service, they have a well-established brand ‘NIkeID’ and have found the balance that was discussed in the literature of having an MC toolkit

that allows for creative expression but is also simple to use. Puma is still establishing its customization service and its brand Mongolian BBQ has a lot less awareness as a service. The variety of products available to customize are low and the options on what specifications to customize are also limited. This means Puma is losing value that could be added to customers as their satisfactions with the overall service are not reaching its full potential. The contemporary research also showed how peer support would be beneficial to organisations as it would encourage users to design new products. Nike, again has the edge over Puma as it has an established website “NikeTalk” that allows users to share and ask for advice on certain design specifications. Puma however, has no official website or forum designed to offer peer support. Puma faces a lot of challenges that they need to overcome in order to compete with Nike on the customization front and offer a truly value adding service. The literature highlighted areas that were required for organisations to provide a customizations service that added value to the users. The literate was used as an evaluative framework in a real life context which showed Puma was behind Nike in regards to their customization service. To overcome the issues outlined Puma needs to add more variety to which shoes can be customized as well as increasing the number of specifications available to design. There are some positives and their Mongolian BBQ service allows users to build a shoe in the style of cooking a meal, this is unique and should continue to be at the forefront of their value adding service. They also had branding and awareness issues that will take time to establish and they could perhaps have famous athletes in a marketing campaign that shows them using their customization service. This will provide recognition and a sense of trust for users who might have been wary of using the service. All in all, Puma has a platform to build on and with time and added components to their service it has the ability to become a successful service provider of customized products.

Bibliography

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Fiore, A., Lee, S., Kunz, G. and Campbell, J. (2001). Relationships between optimum stimulation level and willingness to use mass customization options. Journal of Fashion Marketing and Management: An International Journal, 5(2), pp.99-107. Franke, N., Keinz, P. and Schreier, M. (2008). Complementing Mass Customization Toolkits with User Communities: How Peer Input Improves Customer Self-Design*. Journal of Product Innovation Management, 25(6), pp.546-559. Franke, N, Schreier, M (2006) Why users are willing to pay more for products they design themselves? Research paper, Vienna University of Economics and Business Administration. Kamali, N. and Loker, S. (2006). Mass Customization: On-line Consumer Involvement in Product Design. Journal of Computer-Mediated Communication, 7(4), pp.0-0. Martin, J. (1997). GIVE 'EM EXACTLY WHAT THEY WANT AN INNOVATIVE YOUNG SHOE COMPANY USES A MANUFACTURING STRATEGY WORTH WATCHING--MASS CUSTOMIZATION, MAKING GOODS TO EACH CUSTOMER'S REQUIREMENTS. Merle, A., Chandon, J., Roux, E. and Alizon, F. (2010). Perceived Value of the Mass-Customized Product and Mass Customization Experience for Individual Consumers. Production and Operations Management, 19(5), pp.503-514. Neilson, J. (Feb. 1999). Why people shop on the Web. Retrieved November 18 2017, from the World Wide Web: http://www.useit.com/alertbox/990207.html. Salvador, F, Piller, F De Holan, PM (2009) Cracking the code of mass customization. MIT Sloan Management. Rev. 50 (3): 71–78. Von Hippel, E. (2001). PERSPECTIVE: User toolkits for innovation. Journal of Product Innovation Management, 18(4), pp.247-257....