Method for capturing demands for housing customisation: balancing value for customers and operations costs

Abstract

Mass customisation is a business strategy for house building companies to improve value generation and obtain a competitive advantage by offering the product variety that meets customers’ needs and, at the same time, maintaining costs and delivery time within market expectations. Companies aiming to define product variety should be able to assess the value of customisable attributes, as well as, estimate additional costs for both customer and themselves. This paper proposes a method for capturing customers’ demands to support the definition of the solution space in mass customised housing projects, based on preference models and the willingness-to-pay approaches that regard customer´s value, and its trade-offs with operations costs. The method was applied in an exploratory study with potential customers of the main social housing program from Brazil for initially testing its utility. The method was useful for identifying the most relevant housing customisable attributes and for estimating customers’ willingness-to-pay for different housing alternatives based on the preference model. The findings were summarised to support the definition of the solution space by indicating customers’ propensity to buy according to operations costs and profitability for each product alternative.