Understanding customer satisfaction in product customization

Abstract

Product customization has been recognized as an effective means to meet individual customers’ needs. It is imperative to assist customers in making informed decisions with regard to company capabilities and the added value of customization. Customer value analysis not only empowers customers to express their preferences for various product features explicitly, but it also facilitates the company’s justification of different customization solutions. This paper analyzes diverse elements of product quality in relation to customization and introduces utility functions to quantify the customer-perceived value in terms of the quality utility per unit cost and the ratio of marginal utility to marginal cost. Adaptive conjoint analysis is employed to capture the utility function of product quality with respect to many specific product features. With quantitative analysis of quality utility, customers can be actively involved in the product customization process. Product marketing and design engineering are coordinated through the product family architecture, enabling the convergence of customers’ needs to product offerings of the company. Also reported is a case study of customizing power supply design for a telecommunications system.