INDEX
1. INTRODUCTION ... 4 2. THEORETICAL BACKGROUND ... 10 2.1 CONCEPTUAL MODEL ... 10 2.2 DIRECT EFFECTS ... 11 2.3 MODERATING EFFECTS ... 14 3. METHODOLOGY ... 20 3.1 SAMPLE AND DATA COLLECTION ... 20 3.2 MEASUREMENT VARIABLES ... 22 4. RESULTS AND ANALYSIS ... 27 4.1 DIRECT EFFECTS ... 27 4.2. MODERATING EFFECTS ... 28 4.3 SUMMARY OF EMPIRICAL RESULTS ... 30 5. CONCLUSION AND DISCUSSION ... 30 5.1 CONCLUSION ... 30 5.2.1 Theoretical Implications ... 32 5.2.2 Managerial Implications ... 33
5.3 LIMITATIONS AND FURTHER RESEARCH ... 35
ABSTRACT
1. Introduction
First introduced by Stanly Davis in his book Future Perfect, Mass Customization was described as a novel industry practice that aims to produce customized goods that can satisfy individual consumers’ preferences (Ngniatedema, 2012). According to Pine (1999), mass customization has two main dimensions: gaining from mass production economies of scale at low cost by using a single product or service, and achieving economies of scope by applying a single process in order to produce a greater variety of products or services more cheaply and more quickly. Moreover, mass customization provides the opportunity to fulfill each consumer’s needs without substantial tradeoffs, in cost, delivery, and quality (Pine 1993, McCarthy 2004, Liu et al. 2006). Mass customization combines the product-customization advantages of craft manufacturing with the operational-performance advantages of mass production (Duray 2002, Squire et al. 2006). Since customers nowadays are less and less willing to buy mass products and competitive pressure is intensifying, Mass Customization provides an interesting opportunity to innovate and develop a new way of doing business (Squire et al., 2006, Huang et al., 2008).
McIntosh et al., 2010). Research on mass customization has been mainly conceptual in nature and while much is written in the literature about product-related and manufacturing process-conceptual in nature and while much is written in the literature about product-related enablers, relatively little attention has been devoted to the broader perspective of customer-relationship management (Romano, 2001). It has been only recently that researchers begun to address the importance of understanding the consumer’s perspective on on-line mass customization and the main drivers that attract consumers to use particular formats (Simonson, 2005).
2001). In their research, Randall et al. (2007) demonstrated that users designing their own products report an impressively high degree of perceived fit.
In addition to aesthetic and functional fit, conceptual work on Mass Customization explicitly or implicitly suggests product uniqueness as one of the main value drivers in self-designed products (Kamali and Loker, 2002; Lynn and Harris, 1997; Schreier, 2006). The main argument is that there is almost infinite variety of products offered by the mass customization systems and this not only allows more effective adaptation to the consumer’s aesthetic and functional preferences, but also facilitates enhanced differentiation from other consumers and their belongings by means of a truly unique product (Fiore, 2004; Lynn and Harris, 1997).
Another individual difference that relates closely to mass customization is the need for cognition (NFC). Need for cognition is conceptualized as a tendency to enjoy thinking (Cacioppo and Petty, 1982) and intrinsic motivation of effortful cognitive activities (Cacioppo, Petty, Feinstein and Jarvis, 1996). Low need for cognition is the relative absence of person’s chronic tendency to engage in and enjoy effortful cognitive activity (Cacioppo, 1996). Consumers with high need for cognition naturally tend to search, inquire, think about, and reflect back on information to make a sense of stimuli, relationships and events in their everyday life. These people have more positive attitudes toward stimuli or tasks that require reasoning or problem solving. According to Nail and Ramnarayan (2000), people with high need for cognition experience more success in solving problems, collect information and make decisions on diverse aspects of problems meanwhile facing fewer crises during the process. In general, it has been determined that individuals with high need for cognition tend to seek detailed information about their world, engage in effortful cognitive activity, and are less stressed by cognitively effortful problems or tasks.
the alternatives based on overall liking (Alba and Hutchinson, 1987). They may be better able to cope and reap the benefits using (complex) mass customization tools.
This research aims to connect the subject of mass customization and more specifically consumers’ intentions to use mass customization processes with the influence of the level of need for uniqueness, cognition and expertise. When making decisions, consumers usually make mental linkages that connect product or service features to underlay perceptions of cost and benefits that drive their intentions to use particular product or service (Gutman, 1982). This research investigates the moderating influence of need for uniqueness, need for cognition and level of expertise on the drivers of consumers’ intentions to use on-line mass customization processes.
2. Theoretical background
2.1 Conceptual model
2.2 Direct effects
Better fit
According to Dellaert & Dabholkar (2009), a product’s better fit relates to the consumer’s overall fit and comfort of the product. Online mass customization retailers have the possibility to limit or to expand the total set of product features available to the consumers by providing different number of customization modules (Dellaert & Dabholkar, 2009). Using mass customization processes consumers can customize not only the size of their clothes or shoes but also different styles and fits, which can optimize the comfort, and the final fit of the product. Therefore better fit is expected to have a positive effect on intentions to use mass customization.
Price fairness
Complexity
Complexity is defined as a cost associated with the mass customization process, and refers to the consumers’ perception of how difficult it is to use the on-line mass customization (Dellaert & Dabholkar, 2009). A process can be perceived complex for consumers for a various reasons, including the number of cognitive steps required in customizing a product, the difficulty in identifying product specifications, and dealing with product uncertainty (Dellaert & Stremersch, 2005). It is expected that the perception of greater complexity of an online mass customization process will have negative effects on consumers’ intentions to use mass customization.
Enjoyment
Enjoyment is the consumer’s perception of the pleasure associated with the experiencing of using an online mass customization (Dellaert & Dabholkar, 2009). Enjoyment is considered to be an important aspect of consumers’ shopping experiences both online and offline (Babin, Darden &Griffin, 1994). In mass customization, enjoyment can be driven by the pleasure of participating in an attractive technology-based experience and from the excitement of being able to compose one’s ideal product (Freitag &Higgins, 2002). It is expected that the role of enjoyment will have a positive effects on consumers’ intentions to use mass customization processes.
with greater risk, it is expected that complexity will have a negative impact on consumers’ intentions to use mass customization processes. Table 1. Direct effects H1 There is a positive association between better fit and consumers’ intentions to use on-line mass customization.
H2 There is a positive association between price fairness and consumers’ intentions to use on-line mass customization.
H3 There is a negative association between complexity and consumers’ intentions to use on-line mass customization. H4 There is a positive association between enjoyment and consumers’ intentions to use on-line mass customization.
Dimension Definition Impact on Intentions to use MC
Supporting
literature Explanation
2.3 Moderating effects
Consumers can perceive value in terms of different characteristics such as low price, high quality or fit, affordability, or a trade-off between all give and get components (Zeithaml, 1988). Moreover, consumers may differ in their perception on what drives value, evaluating the costs and benefits differently. This can depend on their personal differences. This research investigates the role of three main personal characteristics: need for uniqueness, need for cognition and level of expertise, and how they influence consumers’ intentions to use mass customization processes. Consumer’s need for uniqueness and mass customization
and processes. Fromkin and Snyder (1977) developed the so-called “need for uniqueness scale” and examined the differences between high and low need for uniqueness individuals, concluding that individuals with high need for uniqueness are especially sensitive to the degree to which they are seen as similar to others and are most likely to engage in behaviors and processes that establish a sense of specialness, such as acquiring unique or scarce product (Snyder, 1992).
Customization makes a product different from the standard, customized product that most people get. Thus, the desire and the need for uniqueness may manifest itself in a tendency to customize products (Lynn and Harris, 1997). Supporting this possibility Harris and Lynn (1996) found that the preference for customized products was positively related to the strength of consumers’ self-attributed uniqueness motives and to a latent variable reflecting the tendency to pursue uniqueness through consumption.
Need for uniqueness and Price fairness
Consumers nowadays are seeking exactly what they need, when they need it at affordable price (Gilmore and Pine, 1997). Although theoretical debates suggests the possibility of producing mass-customized products at the price of produced products, recent applications indicate that mass-customized products are in general more expensive than standardized products (Kotha, 1995).
on the basis of the products’ perceived attributes, which represent the positive and the negative utilities that the consumer can get from its ownership (Michel, Kreuzer, Stringfellow and Schuman, 2009). Generally, consumers are prepared to pay premium to overcome negative product attributes. Thus, consumers who perceive that a customized product overcomes negative product attribute will be prepared to pay premium price. In contrast with avoiding negative attributes, customized products also embody symbolic meaning related to self-presentation, meaning that individualized product attains additional value as compared with other products (Michel et al., 2009). Consumers with higher need of uniqueness desire for products that enable them to differentiate from others. They are unlikely to find standardized products acceptable and therefore more likely to pay for a product that is out of the ordinary (Harris and Lynn, 1997). Considering the theory it can be also presumed that consumers with high need for uniqueness are also less susceptible to the negative consequences of high price. H5 The positive relationship between price fairness and consumers’ intentions to use on-line mass customization is weaker for consumers with higher need for uniqueness. Need for Cognition
Morris, 1983). These individuals expend more cognitive effort on information acquisition, reasoning and problem solving to cope with the wide variety of predicaments in their worlds. According to Cacioppo et al. (1986), individuals with high need for cognition have more deliberation of product information and thus go through the central persuasion route in attitude forming. In contrast, individuals with low need for cognition are involved in less deliberation of product information (Haugtvedt et al., 1988). They are characterized with relative absence of a person’s chronic tendency to engage in and enjoy effortful cognitive activities. Individuals, with higher need for cognition, are more likely to engage in cognitive processes much more than those with lower need for cognition because they do find thinking enjoyable. Moreover, high need for cognition individuals have essential motivation to expend effort to source and examine information (Haugtvedt et al., 1988).
Need for cognition and Complexity
(Berzonsky and Sullivan, 1992). Therefore, it is hypothesized that complexity will be less important for consumers with stronger need for cognition in comparison with those with lower need for cognition.
H6 The negative relationship between complexity and consumers’ intentions to use on-line mass customization is weaker for people with higher need for cognition and stronger for consumers with lower need for cognition.
Customer expertise with mass customization and complexity
users in their intentions to use on-line mass customization processes, as compared with those with lesser experience.
H7 The negative relationship between complexity and customer intentions to use on-line customization is weaker for individuals with greater mass customization experience.
3. Methodology
customization process. For that purpose a special customization tool was created. Each participant had to use the same customization tool, which created a controlled environment and quarantined reliable answers.
There were six main features that could be customized: straps type and color where six options were available, straps length where normal length and shorter length were available, cups color where participants could choose between four main base colors, designer art print by the designer Marjolein Caljoul, decorations including four different color bows, and finally a bra pocket. The initial price of the bra was €55 and depending on the customization options chosen it could get up to €85. Only after a complete customized bra was created the participants were granted access to the questionnaire. This experimental set up assured that all the participants would have the opportunity to experience the same customization process. It was not possible to order the customized bras because the web shop was still not actively working
3.2 Measurement variables
Due to the fact that intentions to use mass customization processes, need for uniqueness, need for cognition and level of expertise were all previously researched in different fields and studies, the survey uses existing scales for the different items. Table 2 summarizes the construct items, their standardized loading score, the relevant source and the scale for each question that was used. Considering Table 2, the independent variables are:
Ø Better fitting product: investigates consumers’ overall fit and comfort of the bra (Dellaert & Dabholkar, 2009; Piller & Müller, 2004).
Ø Complexity: refers to the extent to which consumers find the whole customization process difficult in terms of special skills and knowledge and the number of steps required to complete an order (Dellaert & Dabholkar, 2009).
Ø Risk: based on the factor analysis complexity splits into two factors, the second of which is risk. It deals with consumers’ perception of the uncertainty that the product they customized will not turn out the way they wanted and the privacy issues related with online purchasing.
Ø Enjoyment: investigates how fun, enjoyable, interesting and entertaining the process of online mass customization is (Dellaert & Dabholkar, 2009). Ø Price fairness: deals with consumers’ perception of the fairness of the
price for a customized product (Xia, Monroe and Cox, 2004; Gielissen, and Graafland, 2009).
The dependent variable is:
purchasing their next bra and if they would recommend the website to others (Sirohi et al., 1998).
The moderation variables are:
Ø Need for Uniqueness: the need of a person to be different from the others represented in preferences for one of a kind products, being a fashion leader, adding custom features to products and intentionally doing things in order to differentiate from others (Michel et al., 2009). Ø Need for Cognition: represents the tendency for individuals to engage in and enjoy effortful cognitive activities (Cacioppo, 1996). Ø Level of Expertise: refers to consumers’ knowledge and experience with online mass customization processes (Alba and Hutchinson, 1987)
Construct items Score Description 5 point
Likert Scale Better Fitting Product
BF1 .743 Through customization I can improve the overall fit of my
bra 1=strongly disagree
5=strongly agree BF2 .910 Through customization I can improve the comfort of my bra BF3 .804 Through customization my bra will be fitting better than the standard ones Complexity C1 .806 I find customization rather complicated process 1=strongly disagree 5=strongly agree C2 .717 I feel that a lot of special skills and knowledge are required in order to customize a bra C3 .816 I feel that there are too many steps required in order to customize a bra Risk R1 .622 I feel that there is a big chance that the bra I customize will
not turn the way I wanted it 1=strongly disagree
5=strongly agree R2 .896 Purchasing through the website leads to uncertainties R3 .906 Things can easily go wrong when I purchase through the website R4 Dropped .552 I feel that my privacy is protected at the website Enjoyment E1 .670 Customizing my own bra is fun for me 1=strongly disagree 5=strongly agree E2 .801 It makes me feel happy when I customize my own bra E3 Dropped .415 Customization is enjoyable for its own sake E4 Dropped .021 Customizing my own bra is interesting E5 .814 Customizing my own bra is entertaining E6 .778 The time spent on the website is/was truly enjoyable Price Fairness P1 .673 I think that premium price for customizing a bra is fair 1=strongly disagree 5=strongly agree P2 .824 Paying a bit more for getting a bra of my choice seems worth it P3 .819 I feel that I get value for the money and thus I am ready to pay a bit more for customizing my own bra P4 .834 Paying 10% more for customization seems reasonable Intentions to use MC IMC1 .800 It is likely that I will use customizing when purchasing my
next bra 1=strongly disagree
Finally, the AVE (Average Variance Extracted) is calculated. AVE represents the average communality of a block of indicators. It is considered that if the AVE measures exceed 0.5, the latent variable explains at least half of its measures. Looking at Table 3 it can be seen that almost all values of AVE exceed 0.5 (with exception of Need for Cognition, which scores 0.49; just below the 0.50 threshold).
In order to assess whether the pattern of loadings of the measurement items corresponds to the theoretically anticipated factors, a factorial validity was conducted. To do so the correlation of the latent variable scores with the measurement items needs to show an appropriate pattern of loadings, in a way that the measurement items load highly on their theoretically assigned factor and not highly on other factors (Gefen & Straub, 2005)1.
Construct AVE Cronbach’s Alpha Number of
items Better Fit 0.68 0.76 3 Complexity 0.61 0.68 3 Risk 0.70 0.79 3 Enjoyment 0.60 0.77 4 Price fairness 0.63 0.78 4 Intentions to use MC 0.78 0.72 2 Need for Uniqueness 0.51 0.83 7 Need for Cognition 0.49 0.79 6 Level of Expertise 0.62 0.84 5 Table 3: Constructs reliability
Additionally a correlation matrix, together with the Mean Score and the Standard Deviation of all the variables is shown in Table 4. It can be seen that the highest correlation is between enjoyment and need for uniqueness.
Mean St. D. BF Comp Risk Enjoy PF IMC NFU NFC LE
BF 4.16 .73 1 Comp 3.04 .86 .06 1 Risk 3.23 .91 -.08 .51** 1 Enjoy 4.13 .53 .42** -.16 -.22* 1 PF 3.79 .62 -.28** .21* -.35** .36** 1 IMC 3.34 .72 .29** -.40** -.40** .28** .44** 1 NFU 3.31 .66 .27** -.40** -.42** .60** .40** .39** 1 NFC 3.64 .59 .23* -.23* -.28** .48** .30** .34** .57** 1 LE 2.98 .66 .29** -.33** -.31** .24** .19* .29** .49** .36 1
Table 4: Correlation Matrix *Correlation is significant at the 0.05 level (2-tailed) ** Correlation is significant at the 0.01 level (2-tailed)
4. Results and Analysis
4.1 Direct effects Linear regression analysis is used in order to determine the direct effects on the intentions to use online mass customization processes. Looking at Table 5 and the direct effects between the independent variables and the intentions to use mass customization (dependent variable) we can see that Better Fit, Complexity, Risk and Price have positive effect on intentions to use mass customization and are significant at 10% significance level. On the other hand enjoyment appears not to have an effect on consumers’ intentions to use online mass customization.Variable B t -value Sig. Hypothesis
Table 6 summarizes the model used in SPSS. We can see that 35% of the variance can be explained by the independent variables.
Model R R Square Adjusted R Square Std. Error of the Estimate
1 0.60a 0.35 0.33 0.60
Table 6: Model summary
4.2. Moderating effects
In order to investigate the moderating effects a linear regression in SPSS is used, where the interaction terms are added to the main effects (Aiken & West, 1991). The results are summarized in Table 7. We can see that with the introduction of the main effects of the moderators (NFC, NFU, and LE) the effects of complexity and price fairness (that were significant in Table 6) become insignificant (in Table 7). The effect of better fit (positive effect) remains significant, and indicates the persistence of this effect. Price fairness does no longer have a direct impact, but its interaction effect with NFU significantly influence intentions.
Model B t- value Sig.
Figure 2 visualizes the interaction between Price and Need for Uniqueness. It can be seen that individuals with lower need for uniqueness are more negatively affected by an increase in price (i.e., reduction of price fairness) as compared with those with high need for uniqueness. The reason for that might be because consumers with low need for uniqueness perceive mass customization as something special and unusual, and do not use it when they find the price too high. For them, mass customization has little added value (mass customized products will be evaluated like any other product, because the uniqueness of the specialized products does not bring them any additional value). When low NFU respondents perceive the price as fair, they increase their intentions more strongly than those with high NFU. Those with high NFU are practically not influenced by price. The remarkable direct and negative effect of NFU on intentions hints that respondents with high NFU were not attracted by the mass customized offering. It could be that they found the customization tool to be too easy and that they did not feel that using it will fulfill their need for unique products. Figure 2: Interaction between Need for Uniqueness and Price fairness 1 2 3 4 5
Fair Price Unfair Price
4.3 Summary of empirical results
Based on Table 7, we can conclude that regarding the moderation effects the positive relationship between Price fairness and consumers’ intentions to use mass customization is weaker for individuals with higher need for uniqueness, supporting H5.
Furthermore even though complexity significantly affects consumers’ intentions to use mass customization (Table 6). It did not have any significant relationship with intentions in Table 7 (including moderators). The moderation analysis shows that need for cognition does not moderate the complexity-intention relationship. Thus H6 is rejected.
Finally, the research showed that complexity significantly affects consumers’ intentions to use mass customization in Table 6, but the main effect became insignificant in Table 7 (including moderators). The moderation analysis reveals that the negative relationship is not weaker for people with higher level of expertise. Therefore H7 is rejected.
5. Conclusion and Discussion
5.1 Conclusion The main objective of this research was to gain knowledge in the area of mass customization and to investigate the main reasons that influence customers’ intentions to order mass-customized product. The study is the first one to investigate the moderating role of need for uniqueness, need for cognition and level of expertise on consumers’ intentions to use mass customization.level). The results show that better fit has an important and persistent effect on intentions to use mass customization. Furthermore, price fairness (positive effect) and complexity (negative effect) influence intentions to use, but these effects disappear when the main effects of the moderators are included. The positive impact of price fairness is in line with initial expectations and previous researches (Dellaert & Dabholkar, 2009; Piller & Müller, 2004). It appears that consumers value the outcome of the process (what do I get for which price) rather than the customization process itself: risk and enjoyment are not significant predictors of intentions to use mass customization. This is in stark contrast with previous research (Dellaert & Dabholkar, 2009; Piller & Müller, 2004). A possible explanation for the limited effect of risk and enjoyment could be the relative ease and repetitiveness of the customization tool provided for the particular experiment.
Moreover, results show that even though complexity has direct effect on consumers’ intentions to use mass customization, when analyzed together with the moderating role of need for cognition or level of expertise they seem not to be significant. This may suggest that the moderators substitute for the effects of complexity (i.e. the correlation between NFU and complexity is -.40). Finally, the evidence suggests that the variables need for cognition and enjoyment are also not significant. 5.2 Discussion 5.2.1 Theoretical Implications
Moreover, the study found out that the level of enjoyment did not influence consumers’ intentions to use mass customization. These results are in stark contrast with the current literature (Dellaert & Dabholkar, 2009). Our results suggest that enjoyment does not play significant role in affecting consumers’ intentions to use mass customization. A possible reason for that may be that the customization tool appeared to be rather slow, which could have made participants lose their flow state, which influenced their overall enjoyment from the customization process (Dellaert & Dabholkar, 2009). For more advanced customization tools enjoyment may still play a role, but our results suggest that for simple customization tools enjoyment is not a relevant criterion.
5.2.2 Managerial Implications
The industry practice of mass customization is important part of today’s economy. With companies trying to innovate and produce customized goods that can satisfy individual consumer preferences it is crucial that managers understand their customers’ needs, expectations and the main factors that drive them to engage in adopting the concept of mass customization. For these reasons this study provides several new insights.
uniqueness can be a beneficial for both companies and consumers but only when the price is considered fair. Special student discounts, quantity deals and seasonal actions may be useful in making consumers more aware of the mass customization processes and attaining fair price perceptions. Keeping a detailed profile of clients buying history can be useful because it can give a clear idea of consumers’ purchase behavior. Unlike consumers with lower need for uniqueness, those with higher need for uniqueness seem not to be strongly influenced by price. Managers should consider other factors like reducing complexity and attaining better fit in order to attract these consumers.
Furthermore, the results show that complexity has a direct negative effect on intentions to use mass customization. Reducing complexity should be a primary goal for companies offering online customizable products. A good way to do so can be using short animated demonstration videos that display the steps required to customize a product. These way customers will be guided through the customization process and that in return will reduce complexity and its negative effects.
Consumers can store their virtual body models in their private profiles so they can use it every time they want to purchase a new product.
5.3 Limitations and Further Research
This study has several limitations. The limitations of this study can be taken into consideration for future research on the topic of mass customization. First, the study focuses only on one product, which is related with the apparel industry, where only one website is used and by the time the research was conducted participants did not have the opportunity to order the bras they customized from the web shop as the customization tool was only experimental and therefore more limited.
Furthermore, the sample size is relatively small and the majority of the participants in the study are students, which could be the reason why price appears to be the most important variable for the adoption of the mass customization process. Students also can be considered to score highly on need for cognition as they have higher education.
A possible future research can be conducted comparing products in the technological and apparel industry, where better fit for example can play less important role. Ideally, several websites and both genders should be used in order to prevent generalizing of the findings. It would be interesting to see if a non-student sample is used would that make a difference in price importance.
product, that is more visual, is used would have different impact on the importance of need for uniqueness.
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Appendix 1
Factor Loadings, Independent Variables
Component Unique
products
Appendix 2
Factor Loadings, Moderating Variables and Dependent Variable
COMPONENT Need for Uniqueness Level of expertise Intentions to use MC
