Research Note: User Design of Customized Products

Authors:
Taylor Randall;Christian Terwiesch;Karl T. Ulrich
Affiliations:
David Eccles School of Business, University of Utah, 1645 E Campus Center Drive, Salt Lake City, Utah 84112;The Wharton School, University of Pennsylvania, 500 Huntsman Hall, Philadelphia, Pennsylvania 19104;The Wharton School, University of Pennsylvania, 500 Huntsman Hall, Philadelphia, Pennsylvania 19104
Venue:
Marketing Science
Year:
2007

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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: 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.