IDEAS home Printed from https://ideas.repec.org/a/inm/ormksc/v26y2007i2p268-280.html
   My bibliography  Save this article

Research Note—User Design of Customized Products

Author

Listed:
  • Taylor Randall

    (David Eccles School of Business, University of Utah, 1645 E Campus Center Drive, Salt Lake City, Utah 84112)

  • Christian Terwiesch

    (The Wharton School, University of Pennsylvania, 500 Huntsman Hall, Philadelphia, Pennsylvania 19104)

  • Karl T. Ulrich

    (The Wharton School, University of Pennsylvania, 500 Huntsman Hall, Philadelphia, Pennsylvania 19104)

Abstract

User design offers tantalizing potential benefits to manufacturers and consumers, including a closer match of products to user preferences, which should result in a higher willingness to pay for goods and services. There are two fundamental approaches that can be taken to user design: systems and systems. With parameter-based systems, users directly specify the values of design parameters of the product. With needs-based systems, users specify the relative importance of their needs, and an optimization algorithm recommends the combination of design parameters that is likely to maximize user utility. Through an experiment in the domain of consumer laptop computers, we show that for parameter-based systems, outcomes, including measures for comfort and fit, increase with the expertise of the user. We also show that for novices, the needs-based interface results in better outcomes than the parameter-based interface.

Suggested Citation

  • Taylor Randall & Christian Terwiesch & Karl T. Ulrich, 2007. "Research Note—User Design of Customized Products," Marketing Science, INFORMS, vol. 26(2), pages 268-280, 03-04.
    • Handle: RePEc:inm:ormksc:v:26:y:2007:i:2:p:268-280
    DOI: 10.1287/mksc.1050.0116
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mksc.1050.0116
    Download Restriction: no
    File URL: https://libkey.io/10.1287/mksc.1050.0116?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Brucks, Merrie, 1988. "Search Monitor: An Approach for Computer-Controlled Experiments Involving Consumer Information Search," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 15(1), pages 117-121, June.
    2. Mandel, Naomi & Johnson, Eric J, 2002. "When Web Pages Influence Choice: Effects of Visual Primes on Experts and Novices," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 29(2), pages 235-245, September.
    3. Sujan, Mita, 1985. "Consumer Knowledge: Effects on Evaluation Strategies Mediating Consumer Judgments," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 12(1), pages 31-46, June.
    4. Bettman, James R & Sujan, Mita, 1987. "Effects of Framing on Evaluation of Comparable and Noncomparable Alternatives by Expert and Novice Consumers," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 14(2), pages 141-154, September.
    5. Cragg, John G, 1971. "Some Statistical Models for Limited Dependent Variables with Application to the Demand for Durable Goods," Econometrica, Econometric Society, vol. 39(5), pages 829-844, September.
    6. Wood, Stacy L & Lynch, John G, Jr, 2002. "Prior Knowledge and Complacency in New Product Learning," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 29(3), pages 416-426, December.
    7. Rajiv Lal & Miklos Sarvary, 1999. "When and How Is the Internet Likely to Decrease Price Competition?," Marketing Science, INFORMS, vol. 18(4), pages 485-503.
    8. Sigelman, Lee & Zeng, Langche, 1999. "Analyzing Censored and Sample-Selected Data with Tobit and Heckit Models," Political Analysis, Cambridge University Press, vol. 8(2), pages 167-182, December.
    9. Nelson, Forrest & Olson, Lawrence, 1978. "Specification and Estimation of a Simultaneous-Equation Model with Limited Dependent Variables," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 19(3), pages 695-709, October.
    10. Christian Terwiesch & Christoph H. Loch, 2004. "Collaborative Prototyping and the Pricing of Custom-Designed Products," Management Science, INFORMS, vol. 50(2), pages 145-158, February.
    11. Huber, Joel & Payne, John W & Puto, Christopher, 1982. "Adding Asymmetrically Dominated Alternatives: Violations of Regularity and the Similarity Hypothesis," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 9(1), pages 90-98, June.
    12. Il-Horn Hann & Christian Terwiesch, 2003. "Measuring the Frictional Costs of Online Transactions: The Case of a Name-Your-Own-Price Channel," Management Science, INFORMS, vol. 49(11), pages 1563-1579, November.
    13. Ulrich, Karl, 1995. "The role of product architecture in the manufacturing firm," Research Policy, Elsevier, vol. 24(3), pages 419-440, May.
    14. Karl T. Ulrich & David J. Ellison, 1999. "Holistic Customer Requirements and the Design-Select Decision," Management Science, INFORMS, vol. 45(5), pages 641-658, May.
    15. Gerald Häubl & Valerie Trifts, 2000. "Consumer Decision Making in Online Shopping Environments: The Effects of Interactive Decision Aids," Marketing Science, INFORMS, vol. 19(1), pages 4-21, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kwon, Kyoung-Nan & Lee, Jinkook, 2009. "The effects of reference point, knowledge, and risk propensity on the evaluation of financial products," Journal of Business Research, Elsevier, vol. 62(7), pages 719-725, July.
    2. Naderi, Iman & Paswan, Audhesh K. & Guzman, Francisco, 2018. "Beyond the shadow of a doubt: The effect of consumer knowledge on restaurant evaluation," Journal of Retailing and Consumer Services, Elsevier, vol. 45(C), pages 221-229.
    3. Aljukhadar, Muhammad & Senecal, Sylvain, 2016. "The user multifaceted expertise: Divergent effects of the website versus e-commerce expertise," International Journal of Information Management, Elsevier, vol. 36(3), pages 322-332.
    4. Bucklin, Randolph E. & Sismeiro, Catarina, 2009. "Click Here for Internet Insight: Advances in Clickstream Data Analysis in Marketing," Journal of Interactive Marketing, Elsevier, vol. 23(1), pages 35-48.
    5. Kurt A. Carlson & Samuel D. Bond, 2006. "Improving Preference Assessment: Limiting the Effect of Context Through Pre-exposure to Attribute Levels," Management Science, INFORMS, vol. 52(3), pages 410-421, March.
    6. Oliver Hinz & Jochen Eckert, 2010. "The Impact of Search and Recommendation Systems on Sales in Electronic Commerce," Business & Information Systems Engineering: The International Journal of WIRTSCHAFTSINFORMATIK, Springer;Gesellschaft für Informatik e.V. (GI), vol. 2(2), pages 67-77, April.
    7. Bertrand, Marianne & Karlan, Dean S. & Mullainathan, Sendhil & Shafir, Eldar & Zinman, Jonathan, 2005. "What's Psychology Worth? A Field Experiment in the Consumer Credit Market," Center Discussion Papers 28441, Yale University, Economic Growth Center.
    8. Richter, Alexander, 2010. "Industrielle Produkt-Service-Systeme: Eine vertragstheoretische Analyse," Arbeitsberichte des Lehrstuhls für Produktionswirtschaft 9, Ruhr-Universität Bochum (RUB), Lehrstuhl für Produktionswirtschaft.
    9. Christian Terwiesch & Yi Xu, 2008. "Innovation Contests, Open Innovation, and Multiagent Problem Solving," Management Science, INFORMS, vol. 54(9), pages 1529-1543, September.
    10. Anthony Dukes & Lin Liu, 2016. "Online Shopping Intermediaries: The Strategic Design of Search Environments," Management Science, INFORMS, vol. 62(4), pages 1064-1077, April.
    11. Gert-Jan M. Linders & Henri L.F. de Groot, 2006. "Estimation of the Gravity Equation in the Presence of Zero Flows," Tinbergen Institute Discussion Papers 06-072/3, Tinbergen Institute.
    12. Fay, Scott, 2008. "Selling an opaque product through an intermediary: The case of disguising one's product," Journal of Retailing, Elsevier, vol. 84(1), pages 59-75.
    13. G.J.M. Linders, 2006. "Estimation of the Gravity Equation of Bilateral Trade in the Presence of Zero Flows," ERSA conference papers ersa06p746, European Regional Science Association.
    14. Ana Alina Tudoran, 2022. "A machine learning approach to identifying decision-making styles for managing customer relationships," Electronic Markets, Springer;IIM University of St. Gallen, vol. 32(1), pages 351-374, March.
    15. Davies, Antony & Cline, Thomas W., 2005. "A consumer behavior approach to modeling monopolistic competition," Journal of Economic Psychology, Elsevier, vol. 26(6), pages 797-826, December.
    16. Julia Bredtmann, 2014. "The Intra-household Division of Labor: An Empirical Analysis of Spousal Influences on Individual Time Allocation," LABOUR, CEIS, vol. 28(1), pages 1-39, March.
    17. Eric Johnson & Suzanne Shu & Benedict Dellaert & Craig Fox & Daniel Goldstein & Gerald Häubl & Richard Larrick & John Payne & Ellen Peters & David Schkade & Brian Wansink & Elke Weber, 2012. "Beyond nudges: Tools of a choice architecture," Marketing Letters, Springer, vol. 23(2), pages 487-504, June.
    18. Kamalini Ramdas & Mohanbir S. Sawhney, 2001. "A Cross-Functional Approach to Evaluating Multiple Line Extensions for Assembled Products," Management Science, INFORMS, vol. 47(1), pages 22-36, January.
    19. Dokyun Lee & Kartik Hosanagar, 2021. "How Do Product Attributes and Reviews Moderate the Impact of Recommender Systems Through Purchase Stages?," Management Science, INFORMS, vol. 67(1), pages 524-546, January.
    20. Yukinori Iwata, 2018. "Salience and limited attention," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 50(1), pages 123-146, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormksc:v:26:y:2007:i:2:p:268-280. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.