Study On Select Elements Of Mass Customization

Custom goods can satisfy heterogeneous consumers'need with different product attributes, Mass customization (MC) make it possible that firms manufacture custom goods at the same cost of standard goods. However many firms are cautious about MC, some world-famous MC firms such as Levi's Strauss even stop providing custom goods. Researchers sum up various kinds of cases from practical experience, try to discover the laws from different aspects when firms choose MC. This dissertation from the aspect of product differentiation deciphers some special rules that firms should follow when they implement MC or select production strategies.This dissertation pays attention to theoretical research, summarizes various elements when MC is implementing by means of literature research, analyzes those elements' impact to MC by means of mathematical modeling, compares our conclusions with other researchers'by means of comparative study, and generates the rules of selecting and implementing MC by means of deduction and induction.Firstly, this dissertation draws the conclusion that firms, even non-homogeneous firms, are not willing to implement MC about one-dimension differentiation products in a duopoly market. The conclusion is based on the former theoretical assertion that MC reduces product differentiation and the judgment that the homogeneous firms are not willing to implement MC in a duopoly market.Secondly, this dissertation changes focus to a general marker ---- a monopolistic competition market, and obtain the following findings:First, firms which implement MC will reduce Customer Perceived Value Differentiation between various products and firms' total profits; Second, if only Customized Products Strategy Plan expanded firms'market share, they could implement MC; Third, the more number of firms the less competitive advantages that firm might win, if number of firms is less than or equal to 3 then firms are not willing to implement MC, as well as the customization firm will gain the maximum profit when there are 4 firms in a market; Foubrth, although the Social Surplus in custom goods market is higher than in standard goods market, but customization firm still should promote Customer Satisfaction because Consumer Surplus of customization firm is less than mass production firm; Fifth, price per unit of custom goods is higher than standard goods, bur profit per unit of custom goods in a customization firm is not necessarily higher than standard goods in a mass production firms.Finally, lead time is brought into this study, and then we draw some unique rules. If the lead time of custom goods is longer than standard goods, then to produce one-dimensional horizontal differentiation products firms in a duopoly market will obey the following laws:First, the shorter lead time of custom goods the less firms'intention to manufacture custom goods; Second, firms cannot simultaneously implement MC, and firms cannot be at war with time-based competition of custom goods; Third, firms are not willing to take the lead time compression strategy; Fourth, firms that implement mass production gain the first-mover advantage.This dissertation does not discuss customization strategy about multi-dimensions products and vertical differentiation products. To the two kinds of products, the rules that firms should follow when they implement MC or select production strategies may be quite different to one-dimensional horizontal differentiation products. This is an intriguing subject for further research.