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Management article
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Reference no. U9704A
Published by: Harvard Business Publishing
Published in: "Harvard Management Update", 1997

Abstract

Theoretically, information technology should allow businesses to mass customize products and services for their customers at a reasonable cost. In truth, experts think you can mass customize effectively for only about 20% of your customers. The key to success is making sure that this 20% represents the buyers who are the most loyal and offer the biggest opportunity for future profit. Four different types of customization are described: 1) collaborative customization--dialogues with individual customers to help them articulate their needs as the basis for designing and manufacturing customized products, 2) adaptive customization-- standard but customizable product that users can alter to suit their wishes, 3) cosmetic customization--changing only the presentation of the product for specific customers, and 4) transparent customization-- providing individual customers with tailored goods or services without their necessarily realizing it. The article further elaborates how to align a company''s products and processes with customer needs.

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Abstract

Theoretically, information technology should allow businesses to mass customize products and services for their customers at a reasonable cost. In truth, experts think you can mass customize effectively for only about 20% of your customers. The key to success is making sure that this 20% represents the buyers who are the most loyal and offer the biggest opportunity for future profit. Four different types of customization are described: 1) collaborative customization--dialogues with individual customers to help them articulate their needs as the basis for designing and manufacturing customized products, 2) adaptive customization-- standard but customizable product that users can alter to suit their wishes, 3) cosmetic customization--changing only the presentation of the product for specific customers, and 4) transparent customization-- providing individual customers with tailored goods or services without their necessarily realizing it. The article further elaborates how to align a company''s products and processes with customer needs.

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