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Research Note—User Design of Customized Products

  • 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)

Registered author(s):

    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.

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    File URL: http://dx.doi.org/10.1287/mksc.1050.0116
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    Article provided by INFORMS in its journal Marketing Science.

    Volume (Year): 26 (2007)
    Issue (Month): 2 (03-04)
    Pages: 268-280

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    Handle: RePEc:inm:ormksc:v:26:y:2007:i:2:p:268-280
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    1. Brucks, Merrie, 1988. " Search Monitor: An Approach for Computer-Controlled Experiments Involving Consumer Information Search," Journal of Consumer Research, Oxford University Press, vol. 15(1), pages 117-21, June.
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    8. 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 829-44, September.
    9. Mandel, Naomi & Johnson, Eric J, 2002. " When Web Pages Influence Choice: Effects of Visual Primes on Experts and Novices," Journal of Consumer Research, Oxford University Press, vol. 29(2), pages 235-45, September.
    10. 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.
    11. Huber, Joel & Payne, John W & Puto, Christopher, 1982. " Adding Asymmetrically Dominated Alternatives: Violations of Regularity and the Similarity Hypothesis," Journal of Consumer Research, Oxford University Press, vol. 9(1), pages 90-98, June.
    12. Ulrich, Karl, 1995. "The role of product architecture in the manufacturing firm," Research Policy, Elsevier, vol. 24(3), pages 419-440, May.
    13. 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.
    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.
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