Efficacy and Efficiency of Mass Customization: the Role of Fantastical Thinking

Managers and researchers have identified Mass Customization (MC) as the new frontier for competitive effectiveness (Fuchs and Schreier 2010; Chan et al 2010), able to provide both parties with increased value (Pine 1999; Von Hippel 2001). Thanks to MC toolkits, customers design their own personalized products online, increasing the level of fit between customer expectations and preferences (Franke and Schreier 2011; Fuchs, Prandelli, and Schreier 2009). MC toolkits result in higher perceptions of quality and variety of the selection (Diehl and Gal 2002), higher customer satisfaction (Franke et al 2010; Ouschan et al 2006; Randall et al 2007), generating the feeling of psychological ownership toward products personally designed, and making customers express their innate desire to be unique and original (Franke et al 2010; Franke and Schereier 2008). All these consequences induce customers to pay a premium price, increasing the “money on the table” available to companies investing on MC (Franke et al 2010, 2009; Franke and Piller 2004; Schreier 2006). Several real world failures in performances (e.g. Barbie, Levi’s) show that MC toolkits share a high level of difficulty of interaction that might make customers fail in designing their products (Salvador et al 2009). Unfortunately, scholars recently pointed out that there are not precise guidelines companies might follow when dealing with mass customization: firms, to be successful, need to “customize mass customization” (Salvador et al 2009) and adapt the process to their customers and to the specificities of their products. This broad and general suggestion makes mass customization application even more complex and risky for firms. Our research suggest that a specific cognitive process, namely individual fantastical thinking (Wolley 1997) is worthwhile of investment: It helps customers playing with MC toolkits achieving better performances. Thus, more satisfied customers with their own creation are willing to pay premium price for their own product hence increasing their customer equity.