Research On The Decision Making Of Personalized Product Customization Mode In Manufacturing Firms

With times past by requirement and development,customized products are favored by many consumers because they can better meet the personalized demands of customers.In recent years,researchers in Management and other fields focus on these topics.The traditional standardized manufacturing mode has become the mainstream for the development of global manufacturing industry.Along with the development of science and technology,as well as the change of consuming attitudes and economic level,homogeneous and standardized traditional products gradually fail to meet the personalized demands of consumers.Personalized product customization modes emerged and developed in all walks of life.Therefore,it is theoretical and practical significance to consider the decision making on customization modes in this paper.First,we investigate two modes of personalized firms,that is,the C2 M mode(Customer to Manufacturer)and the C2 D mode(Customer to Designer).We find that the C2 M mode and the C2 D mode have different level of personalization and have different capabilities of designing and manufacturing.In the C2 M mode,a fixed personalization level is given.In the C2 D mode,the firm can provide an infinite personalization level.A higher personalization level means a firm can meet more personalized demands.Then,we present a competition model of two firms with a three-stage game between a C2 M firm and a C2 D firm.In the first stage,the C2 M firm and the C2 D firm decide whether to enter the market.In the second stage,the C2 M firm chooses the fixed value of the maximum personalization level.In the final stage,both firms simultaneously set their prices.Afterwards,we analyze the competition between the C2 M firm and the C2 D firm in a monopoly market and in a duopoly market.We present the Nash equilibrium of this threestage game by backward induction.We derive the optimal price of each firm and the optimal personalization level of the C2 M firm in a monopoly market,as well as the equilibrium prices of two firms and the optimal personalization level of the C2 M firm in a duopoly competition between the C2 M firm and the C2 D firm.We also present the situations where two firms choose to enter the market.Finally,in order to improve the operation efficiency of personalization,we provide managerial insights for decision makers in the customized firm by analyzing the results.