Perreault−McCarthy: Basic
Marketing: A
Global−Managerial
Approach, 14/e- Managing Marketing’s
Link with Other Functional
Areas
Text © The McGraw−Hill
Companies, 2002588 Chapter 20
By contrast, flexible manufacturing systems may make it possible for a firm to
better respond to customer needs. This is a key advantage of Dell Computer’s Inter-
net order approach. Early on, most other computer firms produced large quantities
of standardized computers and then shipped them to dealers for resale. If the dealer
didn’t have the right model in stock, it often took weeks to get it. Dell’s approach
allowed customers to order whatever computer configuration they wanted—then
the parts were assembled to match the order. This reduced the cost of finished goods
inventories, precisely matched output to customer needs, and kept everyone focused
on satisfying each customer. It’s been hard for firms like Compaq to directly copy
this approach without alienating the dealers that it relies on. But it’s trying a vari-
ation of the same idea. Compaq ships bare-bones computers to the dealer, and the
dealer’s service department installs the accessories that the customer wants. Here
flexibility is achieved by combining efforts at different levels of the channel.^10Of course, automobile companies, producers of specialized machine tools, and
other types of manufacturers, as well as many service firms, have been creating prod-
ucts based on specific orders from individual customers for a long time. However, a
wide variety of companies are now looking for innovative ways to serve smaller seg-
ments of customers by using mass customization—tailoring the principles of mass
production to meet the unique needs of individual customers.
Note that using the principles of mass production is not the same thing as try-
ing to appeal to everyone in some mass market. With the mass-customization
approach, a firm may still focus on certain market segments within a broad prod-
uct-market. However, in serving individuals within those target segments it tries to
get a competitive advantage by finding a low-cost way to give each customer more
or better choices.
The changes that are coming with mass customization are illustrated by Levi’s
Personal Pair personalized jeans program for women, which is offered in select Levi’s
stores. With this program, a woman goes to a participating retail store and is care-
fully measured by a trained fit consultant. These measurements are entered into a
computer that generates a pair of prototype trial jeans with these measurements.
The customer tries on that prototype for fit; if necessary, other prototypes or mod-
ifications of measurements may be tried. When the customer is satisfied, the
measurements are sent via computer to the Levi’s factory, where sewing operators
construct the jeans. In about three weeks, the jeans are ready at the store, or they
can be shipped directly to the customer via express mail. The customer’s measure-
ments are kept in a database to make it easy to place future orders—perhaps in a
different color, finish, or style.
Mass customization is not limited to consumer products. Andersen gives builders
and architects a software disk that they use to design their own custom windows.
Similarly, sales reps for ChemStation, a firm that produces industrial detergents,
work closely with customers to understand their special cleaning needs—a car wash
wants something very different from a metal-working plant. Then scientists in
ChemStation develop just the right product—with the correct amount of foam,Producing to order
requires flexibility too
Mass customization—
serves individual needs
Lear Corp. has designed
modular, interchangeable
components that make it
possible for car buyers to
customize their car interiors. This
sort of mass customization could
become available in the near
future.