Customizing the Consumer Benefit. An Investigation into the Effects of Individualization, Exclusivity and Individual Characteristics in Mass Customization


Master's Thesis, 2017
56 Pages, Grade: 1,3

Excerpt

Content

1 Introduction

2 Literature review
2.1 Mass customization
2.1.1 The corporate perspective on mass customization
2.1.2 The consumers’ perspective on mass customization
2.2 Exclusivity
2.3 Individual characteristics as potential moderating effects
2.3.1 Product involvement
2.3.2 Category knowledge
2.4 Interim conclusion

3 Methodology
3.1 Research methods
3.2 Data collection
3.2.1 Measures

4 Results
4.1 Sample characterization and data preparation
4.1.1 Sample characterization
4.1.2 Outlier analysis
4.1.3 Scales reliability
4.1.4 Manipulation checks
4.2 Main Findings
4.2.1 Hypotheses test
4.2.2 Additional analysis
4.2.3 Discriminant validity of results

5 Discussion

6 Conclusions

7 Appendix
7.1 Appendix 1 - Hypothesized relationships
7.2 Appendix 2 - Online questionnaire

8 References

Abstract

Title: Customizing the Consumer Benefit: An Investigation into the Effects of Individualization, Exclusivity and Individual Characteristics in Mass Customization Scholars and practitioners alike have paid growing attention to the concept of mass customization. Assuming favourable outcomes for both businesses and consumers, many have expressed high expectations about this increasingly adopted marketing strategy. The blanket advantage of mass customization is however not unquestioned. Theoretical arguments imply narrow conditions under which consumers perceive the process of customization to be superior over the choice among standard products. But what are the conditions that foster positive consumer-reactions to mass customization? Following an experimental research approach, the manipulated simulation of a real-world customization scenario allowed to collect data and to test developed hypotheses. The study examines the effects of different individualization levels and exclusivity on the benefits consumers perceive through customization. It measures the moderating influence of product involvement and category knowledge and assesses the consumers’ intentions to purchase a customized product. Analyses find that (1) consumers value the creative achievement of customizing a product more than they appreciate the enjoyment of the individualization process as such. (2) Investigations into the role of exclusivity further imply that its perception is viewed as an additional cue of information that is detached from customization activities. (3) Despite strong individual effects of product involvement and category knowledge, no moderating influence was found on the effect of individualization. Collectively, these findings hold implications for how businesses can create value for consumers. The study contributes to the academic literature on consumer behavior as it extends the understanding of how, and under what conditions, mass customization is likely to succeed.

Resumo

Título: Personalizar o Benefício do Consumidor: Uma Investigação sobre os Efeitos de Individualização, Exclusividade e Características Individuais na Personalização em Massa.

A estratégia de personalização em massa é um conceito cada vez mais utilizado e estudado por académicos e especialistas, pelos resultados positivos junto das empresas e consumidores. Este conceito representa uma vantagem consistente e a sua fundamentação teórica implica condições nas quais os consumidores percebem que o processo de personalização é bastante superior à escolha de produtos padrão. Através de uma estudo experimental, onde foram manipulados cenários de personalização do mundo real, foram recolhidos dados e testadas as hipóteses desenvolvidas. Este estudo analisa os efeitos de diferentes níveis de individualização e exclusividade nos benefícios associados pelos consumidores em relação ao processo de personalização. Mede ainda a influência moderadora do envolvimento do produto e conhecimento da categoria e avalia as intenções de compra dos consumidores e de personalização do produto. Os resultados revelam que (1) os consumidores valorizam mais a possibilidade criativa de personalizar um produto do que o prazer do processo de individualização, (2) a análise do papel da exclusividade revelou que a sua perceção é vista como um sinal de informação complementar, não relacionado com as atividades de personalização, (3) apesar dos fortes efeitos individuais no envolvimento do produto e conhecimento da categoria, não foi encontrada influência moderadora no efeito de individualização. Estes resultados revelam implicações na maneira como os negócios podem criar valor para os consumidores. Este estudo contribui para a literatura académica sobre o comportamento do consumidor, uma vez que aumenta a compreensão de como, e em que condições, a personalização em massa poderá ter sucesso.

Acknowledgements

First and foremost, I would like to thank Professor Rita Coelho do Vale who exceeded my expectations as a thesis advisor. I thank her for her constant engagement and availability, her valuable advices and insights. I want to take this opportunity to show my greatest appreciation for my dear family and friends. I thank them for their guidance, their emotional support and their patience as they witnessed my efforts and frustrations during this exciting yet challenging time. For their constant backing and encouraging believe, I am especially grateful for those closest to my heart. Obrigado.

Graphs, Tables & Figures

List of Graphs

Graph 1: Impact of product involvement on outcome variables (Groups based on median-split) .

Graph 2: Impact of category knowledge on outcome variables (Groups based on median-split) .

Graph 3: Impact of age on interest and category knowledge

List of Tables

Table 1: 3x2 between-subjects design - Participant allocation

Table 2: Scales reliability assessment

Table 3: Results of univariate and interaction effects

Table 4: Regression model H3 - Interaction effects of exclusivity and customization intensity ..

Table 5: Results of univariate and moderating effects for product involvement

Table 6: Regression model H4 - Interaction effects of product involvement and customization intensity

Table 7: Results of univariate and moderating effects for category knowledge

Table 8: Regression model H5 - Interaction effects of category knowledge and customization intensity

List of Figures

Figure 1: Hypothesized relationships

1 Introduction

Consumer choice has come a long way since Henry Ford first introduced the Model T. Limiting the potential buyers’ choice to nothing less than any color - as long as it was black - Ford’s single-product soon became a symbol of standard in mass production (Kotler 2000). After the Model T, segment specific products followed to market and adapted offerings were introduced across industries (Gandhi et al. 2013). Starting in the late 20th century, pioneering companies enabled consumers to customize certain product or service characteristics on a mass scale. Practitioners and researchers alike thus shifted their focus towards the marketing strategy of mass customization (e.g. Dellaert & Stremersch 2005; Gilmore & Pine 2000).

Academic and managerial relevance

Advocates of academic and managerial backgrounds alike have expressed high expectations about the promise of mass customization (Ansari & Mela 2003; Sheth & Sisodia 1999). Prominent examples such as Dell’s computers, Nike’s NIKEiD program and My M&M’s underscore the concept’s growing importance in the light of ever-rising levels of sophistication in consumer choice and behavior (Dellaert & Stremersch 2005; Franke & Piller 2004; Randall et al. 2005). However, the blanket advantage of mass customization is not unquestioned. Pointing out exemplary failures of major companies such as Toyota, Toys ‘R’ Us and Levi- Strauss (Franke & Schreier 2010; Pine et al. 1993), a noticeable body of academic literature expressed doubts whether consumer empowerment through mass customization invariably generates measurable benefits for consumers and, respectively, businesses (Zipkin 2001). It is thus to be determined whether, and under what circumstances, consumers perceive the benefits generated by mass customization to be superior over the choice among standard products.

As the rate of adoption and the corresponding number of mass customization programs continued to expand, academic publications however primarily addressed rather narrow, operational issues (Hauser et al. 2006; Hunt et al. 2013). Considerably fewer studies spotlighted the consumer side of mass customization (Hunt et al. 2013). While exceptions to this academic imbalance include the characteristics of consumer preference (Simonson 2005), differences in individual consumer value (Hunt et al. 2013) and the consumers’ ability to specify own preferences (Franke et al. 2009), the effects of customization have not yet been investigated under the impact of perceived exclusivity and its interplay with different individualization levels. Given uncertainty whether and to which degree these variables as well as the consumers’ individual characteristics could influence the appreciation of mass customization, it is important to explore these effects in a scientific manner.

Problem statement

This dissertation hence aims to examine the influence of the offered individualization-level and the perceived exclusivity on the benefits consumers recognize through their mass customization activities. In this regard, it also measures the potential moderating effects of the consumers’ product involvement and (product) category knowledge. Within the boundaries of consumer choice and behavior, the present research further explores how these dimensions influence the consumers’ intentions of purchasing a customized product.

Research questions

As it sheds light upon a yet unexplored connection in consumer choice and behavior, this dissertation contributes to the academic marketing literature and expands earlier work on consumer preference insight. It proposes to address the abovementioned problem by answering the following research questions:

1. Does the level of individualization impact the consumers’ perceived benefits as well as their respective intentions to purchase a mass customized product?
2. Does perceived exclusivity have an effect on the consumers’ perceived benefits as well as their respective intentions to purchase a mass customized product?
3. Will the consumers’ perceived benefits as well as their respective intentions to purchase a mass customized product be stronger for participants who are more (versus less) involved and knowledgeable about the product category?

Methodology

Closely tied to the introduced research questions, the present thesis follows a quantitative research paradigm. Guided by the defined scope and specific goals of research, the study collects primary data in the context of a simulated mass customization scenario, which is manipulated by the level of available customization options and the presence or absence of exclusivity. The self-administered online survey also allows to draw conclusions about the moderating influence of product involvement and category knowledge.

The remainder of the thesis is structured as follows: Section two reviews the prevalent literature linked to the topic of customization and the variables mentioned. Further specifying the direction of research, the chapter then develops the research hypotheses. Section three details the methodology in terms of data collection and analysis, of which results and findings are presented in section four. Based on the insights gained, section five discusses the implications of the present work with a theoretical and managerial focus. The sixth section concludes the thesis, discusses its limitations and illustrates possible alleys of future research.

2 Literature review

This chapter discusses relevant literature about individualization in mass customization and perceived exclusivity - the variables determining the main effects investigated in this dissertation. Moreover, it introduces product involvement and category knowledge as possible moderating factors that represent the individual differences among participants of the present study. Along with the review of respective literature, this chapter develops testable hypotheses which this dissertation aims to answer empirically.

2.1 Mass customization

Emphasizing the need for an individualized marketing approach, Pine et al. (1995, p.103) stressed that “customers, whether consumers or businesses, do not want more choices. They want exactly what they want - when, where, and how they want it - and technology now makes it possible for companies to give it to them.” Signaling the currency and relevance of these remarks, scholars such as Kotler (2000) underscored the significance of individual marketing concepts and called for a broad adoption of corresponding practices (Simonson 2005).

One prominent example of such approaches is mass customization (Simonson 2005), which is rooted in the effort to tailor products to the preferences of individual consumers (Gilmore & Pine 1997; Pine et al. 1993). As one of the first to coin the term of mass customization, Davis (1989) proposed that the concept is defined by its essential ability to provide customized products to mass markets. A second approach to the definition of mass customization grew in popularity during the 1990s, when numerous authors introduced rather practical approaches to the concept that view mass customization as a system of organizational structures, processes and information technology (Da Silveira et al. 2001). Emphasizing the parity of costs and quality between mass production and mass customization, advocates of this conception distinguish the latter only by its ability to deliver enough variety so that the broad majority of consumers could find exactly what they want (Da Silveira et al. 2001; Hart 1995; Trentin et al. 2014). As this dual approach to the definition of mass customization remained robust, numerous scholars highlighted the focus on consumer preferences as the central and unifying variable across the different propositions (Fogliatto et al. 2012). Thus, the main objective of mass customization is to create products and services in a way that best interprets the individual consumers’ preference and choice (Da Silveira et al. 2001).

2.1.1 The corporate perspective on mass customization

Despite the unabated demand for mass commodities, consumers’ greater interest is directed towards using, owning and interacting with distinct products (Hunt et al. 2013; Østergaard et al. 1999). With the adoption of mass customization strategies, firms may gain the capacity to capitalize on these needs for individualized products (Loginova 2010). Taking up the proposed benefits of published theories (e.g. Merle et al. 2010; Addis & Holbrook 2001), serving segments of one through mass customization is likely to be equally or more efficient than mass marketing activities, given that the additional value created is not outweighed by its associated cost (Simonson 2005). In order to successfully implement such strategy, businesses must however design the customization experience in a way that creates value for both the producer and the consumer (Fogliatto et al. 2012; Merle et al. 2010; Squire et al. 2006). Among other factors, the determination of the ideal customization level must thus be considered a pivotal challenge in developing successful mass customization programs (Da Silveira et al. 2001).

Accelerated by the growing availability of internet based solutions, many companies pursue consumers to self-customize products via online tools such as web-based configurators (Fogliatto et al. 2012; Franke et al. 2010; Trentin et al. 2014). For example, German carmaker Porsche offers its customers to customize all of its model range prior to visiting the dealer for order refinement (Porsche.com). MyMuesli provides their customers with an online platform to individualize their muesli with 80 different ingredients (MyMuesli.com) and Nike allows consumers to customize and purchase nearly every kind of the brands’ apparel directly from home or at the brands’ points of sale (Nike.com).

By incorporating consumers in the process of production via mass customization, firms leverage the concept of co-design to add value to their core product or services offering (Hunt et al. 2013; Vargo & Lusch 2004). Co-design (also referred to as co-creation) is characterized as a shared process, in which “a service or product is given [its] concrete form by customers according to their individual needs and based on various options (colour, shape, dimensions, etc.)” (Theilmann & Hukauf 2014, p.5). In the context of mass customization, such practices allow consumers to close the gap between their inherent desires and a company’s traditional product offering (Hunt et al. 2013; Gilmore & Pine 1997).

Mass customization may thus be considered a consumer-centric concept in which the power and responsibility of designing the product is mostly with the consumer (Schreier 2006; Wind & Rangaswamy 2001). In turn, the resulting interaction and real-time data generation facilitates the firms’ understanding of the participating consumers’ behavior and decision making, and thereby fosters a continuously improved environment for mass customization (Lee et al. 2012).

From a business perspective, the efficiency and effectiveness with which companies and their consumers interact therefore strongly influences the success of mass customization and, respectively, the company itself (Schreier 2006; Theilmann & Hukauf 2014).

2.1.2 The consumers’ perspective on mass customization

Creating and delivering superior value for consumers is a familiar yet pivotal concern of marketing managers (Merle et al. 2010). Shifting the focus towards the consumers’ role and behavior, it is important to consider that the benefits consumers perceive in mass customization are crucial to the concept’s overall success (Franke & Piller 2004; Merle et al. 2010).

Closely examining the benefits consumers derive from mass customizing fashion items such as T-shirts, shoes and watches, Schreier (2006) and Merle et al. (2010) imply that the value attributed to customized products varies with the individual consumers’ perception obtained through both the possession of a customized product as well as through the underlying experience of self-customization (Trentin et al. 2014). Focusing its attention to the immediate experience rather than the prospective ownership of products, this dissertation adopts previous research of Merle et al. (2010) and Trentin et al. (2014) and distinguishes consumers’ perceived benefits of self-customization into creative achievement benefits and hedonic benefits.

Creative achievement benefits specify the capacity of mass customization to evoke the consumers’ pride of authorship (Schreier 2006; Trentin et al. 2014). Directly linked to the output of customization activities, pride of authorship is associated with the consumers’ perceived competence and sense of creation (Schreier 2006). With regards to the latter of these two conditions, academic literature suggests that the time, effort and attention required to configure a product or service cause consumers to consider the customized product as part of their (extended) self and thus supports their sense of creation (Belk 1988; Schreier 2006; Trentin et al. 2014). In order to elicit pride of authorship, consumers must however also recognize a positive response on their competences, which is why the configured product must be perceived as aligned with the consumers’ underlying preferences (Franke et al. 2010; Trentin et al. 2014). The benefit of creative achievement thus refers to the fully configured product and may be characterized as output-oriented (Schreier 2006; Trentin et al. 2014).

Derived from mass customization’s potential to arouse intrinsically rewarding experiences, consumers may also perceive hedonic benefits (Merle et al. 2010; Schreier 2006; Trentin et al. 2014). Complementing the consumers’ perceived benefits with a process-oriented perspective, Schreier (2006) postulates that consumers may experience the process of customization as a self-rewarding action. Putting this into perspective with prior research on intrinsically rewarding experiences (e.g. Kruglanski 1975), co-creative customization may have the capacity to evoke positive effects on the consumers’ perceived hedonic benefits through process enjoyment (Merle et al. 2010; Schreier 2006; Trentin et al. 2014). In line with the differentiation applied in this thesis, the hedonic benefit refers solely to the experience of customization through co-design and disregards the consumers’ eventual perception of the fully configured product (Schreier 2006).

All these things considered, the participation in mass customization is expected to “create a positive ‘mood’, which is carried over to the assessment of product value” by the engaged consumers (Franke & Schreier 2010). Numerous studies find support for this proposition and observe an elevated willingness to pay for customized products (Franke & Schreier 2010; Franke et al. 2010), which is likely to translate to an increased likelihood of purchase. Mass customization further increases the fit between the customized product and the consumers’ individual preferences (Simonson 2005) and hence raises the perceived value attributed to respective products (Franke et al. 2010). Taking these remarks as well as the corporate perspective of mass customization into consideration, this dissertation hypothesizes that the amount of individualization options (also referred to as the level or intensity of individualization) available in self-customization activities influences the benefits as well as the purchase intentions consumers perceive in a respective scenario.

H1: The level of individualization offered in mass customization positively impacts the consumers’ perception of benefits (creative achievement and hedonic benefits) and the consumers’ purchase intentions.

2.2 Exclusivity

Mass customization, as a representation of a firm’s product offering, may be tailored and provided explicitly to selected groups or individual consumers (Acquisti & Varian 2005; Barone & Roy 2010b; Simonson 2005; Zhang & Wedel 2009). By targeting respective marketing activities only to some consumers (i.e. those who are granted to customize features of a product), but not to others (i.e. those whose choice is limited to standard product features), such strategies represent an exclusive form of tailored promotions (Barone & Roy 2010b).

Exclusive promotions have become an increasingly popular practice among companies which seek to segment their current and prospective customers and to address them based on their distinct behavior (Feinberg et al. 2002). Referring to targeted price promotions, Feinberg et al. (2002) exemplify the popularity of such practices and predict further growth in utilization based on the rising use of information technology and the associated availability of consumer data.

Barone & Roy (2010b) underline the importance of further investigating exclusivity as the variable has received only little attention in academic literature on consumer behaviour. Accordingly, they emphasize the necessity to understand the impact of exclusivity and other social parameters on the consumers’ choice and preferences (Barone & Roy 2010b).

In the context of the present research, it is important to recognize that the process of decision making is influenced by numerous sources of information which, in sum, determine whether the consumer is willing to purchase a product or not (Inman et al. 1997). One such information cue may be the perceived exclusivity attributed to a (customized) product. Literature suggests that the perception of exclusivity impacts the evaluation of respective offers and results in an increased preference towards the exclusive product (Barone & Roy 2010b; Eisend 2008). Wu et al. (2012) support this assertion as they identify exclusivity’s capacity to satisfy the consumers’ need for uniqueness to be a significant driver of the perceived value of a product.

Based on their findings related to targeted price promotions, Barone & Roy (2010a) furthermore demonstrate that consumers are sensitive to “non-traditional” promotional characteristics such as perceived exclusivity. Among other scholars in the field of psychology, Inman et al. (1997) and Lynn (1991) point out possible effects on the consumers’ perception of product value and highlight that the (manipulated) perception of exclusivity impacts the consumers’ attitude towards brands and, respectively, products. All these things considered, this dissertation hypothesizes that perceived exclusivity influences the benefits as well as the purchase intentions consumers perceive in a mass customization scenario.

H2: A (positive) relationship exists between perceived exclusivity and the consumers’ perception of benefits and purchase intentions.

Moreover, it is hypothesized that a (positive) interaction exists between the offered level of individualization and the perception of exclusivity in mass customization. The according interaction effect is summarized in Hypothesis 3.

H3: The impact of the interaction between perceived exclusivity and the level of individualization exceeds the variables’ separate influence on the consumers’ perception of benefits and purchase intentions.

It must however be noted that the impact of exclusivity was found to be dependent on highly individual variables such as the consumers’ gender and self-construct (Barone & Roy 2010a; Barone & Roy 2010b). Perceived exclusivity may thus influence the overall evaluation of a product positively, negatively or not at all (Barone & Roy 2010b; Inman et al. 1997). Such cautionary remarks underline the need to further understand if, and under what conditions, perceived exclusivity may enhance or diminish the consumers’ perception of products (Barone & Roy 2010a).

2.3 Individual characteristics as potential moderating effects

When engaging in a mass customization program, consumers influence their own perception by bringing in their individual characteristics and personality traits (Lee et al. 2012; Puligadda et al. 2010; Simonson 2005). Extending the scope of research beyond the investigation of the main effects of individualization and perceived exclusivity, this dissertation further aims to point out these individual differences and their possible moderating effects in a mass customization scenario. Literature suggests that both product involvement and category knowledge are important factors that influence consumer behavior and may therefore impact the perceived benefit of consumers in the given context (Dholakia 2001; Hunt et al. 2013).

2.3.1 Product involvement

Numerous studies have demonstrated the broad influence of consumer involvement and highlighted its effects not only on the decision-making process, but also on the consumers’ attitude, perception and preference towards products and services (Suh & Youjae 2006; Warrington & Shim 2000; Xue 2008; Zhou et al. 2012). While a considerable string of literature focuses on the impact on purchase decisions and advertising (e.g. Te’eni-Harari et al. 2009; Zaichkowsky 1986), this study investigates the role of involvement with regard to the product itself - the product involvement (compare Atkinson & Rosenthal 2014).

Product involvement may be considered an instant effect of limited duration, which is expected to influence the consumers’ level of engagement in information search and processing as well as their respective decision-making-behavior (Laurent & Kapferer 1985; Mittal 1989). The construct connects to personal feelings and beliefs about a product, which are implicitly expressed by the consumers’ individual self-concept, values and needs (VonRiesen & Herndon 2011; Zaichkowsky 1985; Mittal 1989). In other words, the concept of product involvement describes the consumers’ response or personal significance ascribed to a product rather than characteristics of the object itself (Gordon et al. 1998; VonRiesen & Herndon 2011). It is however noteworthy, that because product involvement is based on interpretation, the degree of involvement varies not only across different consumers, but may also be subject to change for the same individual, depending on the particular time, situation and cognitive effort entailed in the particular decision making process (Te’eni-Harari et al. 2009; VonRiesen & Herndon 2011; Zaichkowsky 1985).

Successful mass customization naturally implies a presumably high level of product involvement through active engagement of the participating consumers (Hunt et al. 2013). In this context, Laurent and Kapferer (1985) discovered product differentiation to function as a foundation and facilitator of product involvement. Compared with their standard alternatives, mass customized products increase the degree of differentiation and are expected to evoke an elevated degree of product involvement (Hunt et al. 2013; Laurent & Kapferer 1985). This, in turn, contributes to a more rewarding customization experience and has been observed to facilitate the consumers’ perceived benefit (Theilmann & Hukauf 2014; Trentin et al. 2014). Because their purchase intentions are assumed to be closely linked to the consumers’ individual level of product involvement (Te’eni-Harari et al. 2009; Laurent & Kapferer 1985), the variable must be considered an important driver of perceived product value and corresponding purchase behavior (Hunt et al. 2013). The presumed moderating effects of product involvement are summarized in Hypothesis 4.

H4: The consumers’ level of product involvement will moderate the previously established relationships (H1-H3).

2.3.2 Category knowledge

The concept of consumer knowledge has been examined under numerous interchangeable labels with modest differences in focus (e.g. Alba & Hutchinson 1987; Brucks 1985; Park et al. 1994). With reference to (product) category knowledge, Brucks (1985) recognizes two main components: objective knowledge (“amount, type, or organization of what an individual actually has stored in memory”) and subjective knowledge (“an individual’s perception of how much s/he knows”). In other words, objective knowledge is based on the consumers’ true knowledge and memory, whereas his or her subjective knowledge is based on self-assessment (Park et al. 1994). Brucks’ (1985) further differentiates the components of category knowledge by their frame of reference. While objective knowledge mainly refers to the consumers’ stored information about the corresponding product class, subjective category knowledge is often linked to product-related experience (Brucks 1985; Park et al. 1994). Underlining the significance of subjective knowledge in the context of mass customization, such repeated product experiences (also referred to as consumption patterns) have been linked to the performance level of product-related tasks by different empirical studies (e.g. Chang 2004; Park et al. 1994). The present study thus analyzes subjective knowledge representatively for the variable of category knowledge.

The concept of mass customization requires the consumer to translate his or her specific preferences into desired product characteristics through co-design (Loginova 2010). Despite the essential relevance of these activities, consumers often do not have the required knowledge to enable and support these tasks (Huffman & Kahn 1998; Piller et al. 2005). Taking up the previous remarks, a lack of consumer knowledge about a product category is likely to result in an overload of information and frustration when engaging in a process of mass customization (Alba & Hutchinson 1987; Dellaert & Stremersch 2005). In contrast, more knowledgeable consumers prove greater capability in processing and analyzing information based on learned and stored decision criteria (Alba & Hutchinson 1987; Chang 2004). Consequently, they are more likely to show better matches between their preference and their self-customized products and are hence expected to maximize their perceived benefits when mass-customizing a product or service (Lee et al. 2012; Loginova 2010; Simonson 2005). Among other factors, category knowledge must therefore be considered a necessary prerequisite and pivotal enabler of successful engagement in mass customization (Alba & Hutchinson 1987; Bendapudi & Leone 2003; Ghosh et al. 2006; Loginova 2010; Randall et al. 2007; Simonson 2005). The presumed moderating effects of consumer category knowledge are summarized in Hypothesis 5.

H5: The consumers’ level of category knowledge will moderate the previously established relationships (H1-H3).

2.4 Interim conclusion

Summarizing the literature review, individualization and perceived exclusivity were studied in the immediate context of mass customization, whereas product involvement and category knowledge were revised as moderating variables that rely on the individual characteristics of consumers. Based on the examination of respective literature, greater levels of individualization are expected to positively influence the creative achievement and hedonic benefits consumers perceive through mass customization. Consequently, it is expected that a (positive) relationship exists with the overall benefits of co-creation as well as the purchase intentions towards a customized product. Graphically illustrated and summarized in appendix 1, similar effects are anticipated under the presence of perceived exclusivity. Product involvement and category knowledge are presumed to influence these effects as moderating factors.

3 Methodology

This chapter elaborates on the methodological approach followed to answer the research questions of this thesis as well as to confirm or discard the hypotheses derived from the literature previously reviewed. Due to the empirical nature of the underlying study, the chapter is structured into two main parts: Firstly, it presents the chosen research methods, specifically online surveys. It then presents detail about the process of data collection and explains the rationale of the chosen survey structure, measures and manipulations.

3.1 Research methods

In the interest of examining the specified main- and moderating effects, this thesis relied on a self-administered online-questionnaire. The study aimed to measure all effects relevant to the problem statement through a six-staged survey. Having chosen smartwatches as an appropriate research object, the survey manipulated the participants’ perception of exclusivity and the available customization-level in order to simulate an environment corresponding to the study’s context of mass customization.

Online surveys

Given its centrality to the present study, it is important to outline both the advantages and disadvantages of an online survey as the method of research. As an advantage, online surveys allow the researcher to reach broad audiences at zero to very low relative costs (Deutskens et al. 2004; Llieva et al. 2002). Leveraging online communication channels such as social media, instant messaging and eMail, a self-administered online questionnaire may be distributed and shared rapidly (Malhotra & Birks 2007). This allows the researcher to address large amounts of respondents and, respectively, to collect sufficient amounts of data within a short period of time (Deutskens et al. 2004). Recipients of the survey may answer to the proposed questions on static devices such as Laptops and desktop PC’s or on their mobile device. As the present study is based on an online scenario that simulates a real-world purchase situation, the authentic environment in which the survey is answered may increase the validity of the collected responses (compare Malhotra & Birks 2007). In this context, the underlying software allows to manipulate and randomize the flow and certain elements of the questionnaire (Malhotra & Birks 2007). Moreover, the electronic distribution and automated return of data eliminates the possibility of transcription errors and allows an immediate and qualified analysis of received responses (Llieva et al. 2002).

On the contrary, an online survey is subject to a number of limitations that may influence the outcome of the data collection and subsequent analysis. Most evidently, the researcher has little control over the identity of the respondent as well as the speed and accuracy with which he or she completes the provided questionnaire (Llieva et al. 2002). Due to the self-administration of the survey, participants may not address and clarify open questions, leaving a risk of misunderstanding and, consequently, defective answers to the concerned question (Malhotra & Birks 2007). Asking the respondent to answer the survey on their own device and preferred setting, answers may further be influenced by paralleled activities such as online searches and interaction. Previous studies have shown that such actions may be caused by the respondents’ believes of others’ expectations and cause over- or understatements when asked about certain dimensions (Malhotra & Birks 2007).

3.2 Data collection

The methodology of this dissertation followed a quantitative research paradigm. Such research is commonly defined by its use of techniques that are deployed to quantify and statistically analyze data (Malhotra & Birks 2007). To complement the reviewed literature and research streams in an academic manner, an experimental approach was used to investigate the hypotheses derived in the previous chapter. The following sections provide details about the data collection methods as well as the procedures that were deployed to understand the different main- and moderating effects in question. Creating the base for subsequent analysis, the different effects were assessed through a 3 (customization: control, low, high) x 2 (exclusivity: control, exclusivity) between-subjects design that allowed for the comparison of six distinguishable clusters of participants.

3.2.1 Measures

After a short introductory section of questions leading the participants towards the topic of smartwatches, the first core section measured the product involvement and category knowledge of all respondents. Then, the different manipulations were presented before their intended perception was measured through respective manipulation checks. The third core section subsequently assessed the benefits consumers perceived during the stimuli exposure, namely the experience of mass customizing a smartwatch. In the then following fourth core section of the questionnaire, the purchase intentions among the various groups of recipients were measured. At last, demographics were recorded in order to describe and validate the sample of participants. Detailing the individual sections’ structure and the questions’ underlying techniques, the following sections describe the process of data collection in full account.

Introductory section

The introductory note of the questionnaire informed participants about the general set up of the survey and asked them to state their answers based on what they “truly feel and perceive”. The first two questions then led towards the research object of the survey - smartwatches - and subtly introduced the environment of the scenario to the respondents. Firstly, participants were asked to indicate their level of interest in technology, customization and accessories (3-item scale; e.g. “technology”; 5-points scale; 1 = “Extremely interested”, 5 = “Not interested at all”). Testing the relevance of the chosen research object, the second question asked the participants about their recent purchase history or consideration for watches, smartwatches or smartphones (“Did you consider to buy (or did actually buy) a watch, smartwatch or smartphone, in the last 2 years?”; 7-points scale; 1 = “Considered very much”, 7 = “Considered not at all”).

First section: Product involvement and category knowledge

This section of the questionnaire opened with a brief intermediate notice, which explicitly pointed out that the following questions would relate to the topic of smartwatches. In order to minimize the potential bias participants may attribute after the different manipulation scenarios were presented, the section was placed at the beginning of the survey.

As the first of two individual characteristics, product involvement was tested based on a scale adapted from Franke et al. (2009), who based their measurement of involvement on prior research of Zaichkowsky (1985). Participants of the survey were asked to complete the sentence “For me, a smartwatch (is)…” in a way that best described their feelings linked to six items (e.g. “matters”; 7-points scale; 1 = “matters”, 7 = “doesn’t matter”). The second variable assessed in the group of individual characteristics was the category knowledge of participants. Based on prior research of Chang (2004), participants were asked to state their level of agreement with a number of statements (4-item scale; e.g. “I know a lot about smartwatches”; 7-points scale; 1 = “Strongly agree”, 7 = “Strongly disagree”).

Second section: Manipulation scenarios

After assessing the individual characteristics that could influence the participants’ responses intrinsically, an intermediate statement asked all respondents to imagine a scenario in which they were actively searching for smartwatches online. Participants were then exposed to two manipulations that were distributed randomly and equally among all respondents. While the first manipulation aimed to influence the recipients’ perception of exclusivity, the second manipulation was intended to affect the perception of customization and its tiered intensities.

[...]

Excerpt out of 56 pages

Details

Title
Customizing the Consumer Benefit. An Investigation into the Effects of Individualization, Exclusivity and Individual Characteristics in Mass Customization
College
Católica Lisbon School of Business & Economics
Grade
1,3
Author
Year
2017
Pages
56
Catalog Number
V450740
ISBN (eBook)
9783668850941
ISBN (Book)
9783668850958
Language
English
Notes
Die Note 17/20 (Originalnote) entspricht laut der TU Berlin, der RWTH Aachen oder auch der Uni Podsdam einer 1,3 nach deutschem Notensystem.
Tags
Consumer Behavior, Konsumentenverhalten, Mass Customization, Individualization, Individualisierung, Exclusivity, Exklusivität, Product Involvement, Category Knowledge, Purchase Intention, Customization, Consumer Benefit, Apple, Watch
Quote paper
Marvin Burmester (Author), 2017, Customizing the Consumer Benefit. An Investigation into the Effects of Individualization, Exclusivity and Individual Characteristics in Mass Customization, Munich, GRIN Verlag, https://www.grin.com/document/450740

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