Consumer Response to and Choice of Customized versus Standardized Systems

47 Pages Posted: 19 May 2009 Last revised: 10 Aug 2009

See all articles by Neeraj Bharadwaj

Neeraj Bharadwaj

Independent

Rebecca Walker Reczek

Ohio State University (OSU) - Department of Marketing and Logistics

Frenkel Ter Hofstede

University of Texas at Austin - Red McCombs School of Business

Date Written: May 2009

Abstract

Recent research on customization suggests that a need exists to examine conditions under which selling customized versus non-customized offerings will be more beneficial to vendors. To this end, this paper empirically evaluates consumer response to and choice of customized systems (offerings that are integrated and customized) in relation to standardized systems (offerings that feature integration but not customization). Through a series of studies, we demonstrate that the relationship between a buyer’s systems purchase strategy and their future repurchase intentions toward the seller is moderated by a buyer characteristic (that is, a consumer’s insight into his/her own preferences, or the degree to which a consumer can confidently and consistently express his or her true preferences) as well as a seller characteristic (retailer reputation). Given that consumers who are experts have greater insight into their own preferences than novices, our work also suggests that this greater insight into one’s own preferences is a plausible explanation for why experts are more likely to choose a customized system. The main practical implication of our research is that it prompts managers to challenge the contention in some mass customization writings that customized offerings have universal appeal. Although the participants in our studies also tended to be more attracted to customized systems in general, this proclivity was lower for consumers with less product category expertise. This is important because our results convey that repurchase intentions towards a vendor will be higher after the purchase of a non-customized system by those consumers who lack insight into their preferences. As such, firms should try to propose customized systems only to those prospective buyers who possess strong preference insight, and propose standardized systems to those buyers who do not.

Keywords: Bundling, consumer behavior, customization, preferences, marketing strategy, solution selling, and systems selling

Suggested Citation

Bharadwaj, Neeraj and Reczek, Rebecca Walker and Ter Hofstede, Frenkel, Consumer Response to and Choice of Customized versus Standardized Systems (May 2009). McCombs Research Paper Series No. MKT-04-09. Available at SSRN: https://ssrn.com/abstract=1406865 or http://dx.doi.org/10.2139/ssrn.1406865

Neeraj Bharadwaj (Contact Author)

Independent

No Address Available
United States

Rebecca Walker Reczek

Ohio State University (OSU) - Department of Marketing and Logistics ( email )

2100 Neil Avenue
538 Fisher Hall
Columbus, OH 43210
United States

Frenkel Ter Hofstede

University of Texas at Austin - Red McCombs School of Business ( email )

Austin, TX 78712
United States

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