"Mass customization is profitably providing customers with anything they want, anywhere they want it, any time they want it," Christopher W. Hart, president, the Spire Group, Boston, told the American Marketing Association meeting this fall.
Neglecting customization can cost companies sales, Mr. Hart said. Many lose potential income because customers take their products and services to a third party to be altered to meet their needs or specifications.
For example, he said, automakers could have boosted profits by selling made-to-order audio equipment. Instead, they stuck with standard equipment and spawned the independent car stereo industry.
But he said companies like BMW are thinking about building showrooms with simulators that would replace not only the test drive but also allow customers to choose color and other options and order direct from German factories.
Individualized products and services can stimulate demand as well, Mr. Hart said.
The Ritz-Carlton Hotel Co. chain trains sales associates to talk with customers to pick up pieces of information that are plugged into a database. For example, he said, ask room service for decaffeinated coffee and the hotel will remember on the next visit.
In another case he cited, Lutron Electronics Co., a small Coopersburg, Pa., electronics company, appeared doomed when General Electric Co. decided to enter its market for light switches. Lutron, however, developed snap-together modules that assemble like Lego blocks to quickly produce specific configurations requested by designers and architects. The result: a continued strong performance in the face of the Goliath.
Mass customization, however, doesn't just mean throwing lots of decisions at a potential buyer, Mr. Hart cautioned.
"Customers don't want unlimited choice," Mr. Hart said, citing the problem the Nissan had in Japan when it confounded customers with 27 different types of Sentra steering wheels.
Not all marketers at the conference agreed with his assessment.
Jack Trout, president, Trout & Partners, Greenwich, Conn., urged marketers to stick with old-fashioned marketing principles: Find a good idea, be first with it and stick to it. "If management says they want to change people's minds, forget it. Once they [consumers' minds] are made up, they stay made up."
Xerox Corp. tried in the 1970s to reposition itself as a computer company and in the process lost the edge on the multibillion-dollar laser printer business to Hewlett-Packard Co., he said. General Motors Corp. destroyed its brands by building inexpensive Cadillacs and expensive Chevy's. "VW walked away from small," Mr. Trout said.