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User design of customized products.

Publication: Marketing Science
Publication Date: 01-MAR-07
Format: Online
Delivery: Immediate Online Access

Article Excerpt
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: parameter-based systems and needs-based 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.

Key words: user design; product design; product development; user needs; customer needs; design decisions; customization

History: This paper was received August 5, 2003, and was with the authors 7 months for 2 revisions; processed by Gene Anderson.

1. Introduction

User design is a particular form of product customization that allows the user to specify the properties of a product. Consider three examples. At Cmax.com, athletes can design a running shoe to their specifications, selecting almost every element of the shoe from the material of the sole to the color of the shoelace. General Mills experimented with an on-line service in which consumers could design a customized breakfast cereal. Consumers can design a customized computer from Dell, using the company's website. User design has emerged as a mechanism that can be used to build brand loyalty, to fit products to the heterogeneous needs of a market, and to differentiate the offerings of a manufacturer (Dahan and Hauser 2002, Wind and Rangaswamy 2001). The use of computing and the Internet in consumer decision making makes user design and customization particularly relevant today (Winer et al. 1997).

User design is especially challenging if the user has little or no background in the underlying technical domain. For example, a particular consumer might actually prefer a specific level of computer gaming performance, e.g., at least a 50 frames-per-second refresh rate on Motocross Madness. However, is the consumer really well equipped to evaluate and optimize potentially interacting design decisions concerning the microprocessor, video processor, and display resolution to achieve this goal?

Hence, we observe a dilemma inherent to product customization. The user has the most information concerning his or her utility function but typically only has a partial understanding of the technical domain underlying the design problem. In contrast, the manufacturer typically understands the technical domain well but has only partial information about the user's preferences.

In this article, we present and evaluate a novel approach to user design, in which the user expresses needs directly and leaves to the manufacturer the translation of needs into parameter choices. We refer to this approach as the needs-based approach. The needs-based approach provides an alternative to the traditional user design approach--the parameter-based approach--in which the user directly manipulates design parameters.

Our research compares the parameter-based approach and the needs-based approach in the context of the consumer laptop business. In collaboration with Dell, we developed two user interfaces. The first one largely resembles Dell's current user design approach (parameter-based) while the second one provides an alternative, needs-based approach. We use these two systems to control and monitor a simulated purchase experience (Brucks 1988, Mandel and Johnson 2002).

The objective of this article is to demonstrate the strengths and limitations of these two approaches and to outline several opportunities for the improvement of user-design interfaces. We believe that we make several unique contributions. First, we believe that this is the first paper to articulate the two approaches to user design. Second, we believe that the needs-based system that we have designed, built, and tested offers solutions to several limitations of the parameter-based approach. Third, we believe that ours is the first empirical research testing any approaches to user design.

The remainder of this article is organized as follows. In [section] 2, we develop theory and hypotheses. In [section] 3, we describe the design of the two user interfaces we test. In [section] 4, we describe the experimental design. In [section] 5 we present the results. Finally, [section] 6 contains discussion and concluding remarks.

2. Theory and Hypotheses

For customized products, a design problem can be thought of as a search for a set of values for the product design parameters that maximizes user utility (Ulrich and Eppinger 2004). This problem can be represented by the causal network in Figure 1, in which the design parameters on the left drive product performance specifications, which in turn relate to user needs, which underlie user utility (Ramaswamy and Ulrich 1993).

[FIGURE 1 OMITTED]

Typically, a professional product designer is in charge of understanding this causal network and linking design parameters to user needs. Furthermore, the professional designer will elicit the relative importance of needs from the potential user of a product. Based on this information, the product designer, who is typically equipped with professional training and substantial experience, then searches for values of the design parameters that are likely to maximize user utility. Finding the best (utility-maximizing) design solution constitutes a challenging information-processing task.

With user-design systems, the professional designer is replaced by the user. However, under the parameter-based approach to user design, the same information-processing challenges persist. The user must understand the causal network relating design parameters to user needs and must understand his or her own needs. Given that the user in a consumer setting typically does not have substantial technical domain knowledge or access to analytical tools, the parameter-based approach inherently bears the risk of what we call a design defect--a choice of design parameters that does not maximize user utility. A design defect reflects a misfit between the product designed and the utility-maximizing product that might have been designed, despite the fact that the user is in control of all the design decisions.

Design defects can arise for several reasons. First, utility may depend on subjective user needs, whose potential satisfaction is hard to communicate to the consumer, especially if the user design is executed over the Internet (Degeratu et al. 1999, Lal and Sarvary 1999, Srinivasan et al. 1997, Dahan and Srinivasan 2000). Design defects can also result from holistic user needs, the case in which several design parameters interact in determining a product performance specification, thus creating a complex mapping from design parameters to user needs (Ulrich and Ellison 1999, Terwiesch and Loch 2004). For example, the ability of a laptop to deliver good video gaming performance is driven by an interaction between the central processor and the video processor. These interactions can create mathematical complexity from the combinatorics of the design space and from non-monotonicity of utility (Hann and Terwiesch 2003).

An alternative approach to the design problem for customized products is to specify the relative importance of the user needs for a particular individual and then allow an automated system, with an embedded model of the causal network, to find a feasible set of design...

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