Guest Column with Anish Nagpal

July 12 / 90

 Dr. Anish Nagpal is a Senior Lecturer in the Department of Management and Marketing.

In order to better satisfy consumer needs, more and more firms now-a-days allow customisation of their products. Consumers have the power to specify their computer configurations, design their own shoes, create their own pizza, customise their cable television package, etc. Although a very satisfactory process, it is worth asking the question, “Do consumers truly get what they want?” 

Consider the following two situations. You have been thinking of buying a computer and go online to a manufacturer’s website. The manufacturer offers a base model of a computer which does not include other options as part of the standard offering. However, you can choose from a number of options which you would like to add to the base model of the computer. So you go ahead and add options from the list offered.

Now, consider your friend who is also planning to buy a computer. You recommend her to the same manufacturer’s website from which you had bought your computer. Your friend visits that website and starts surfing. Only this time, the manufacturer offers a fully loaded model of a computer which includes all the options as part of the standard offering. However, one can choose to remove whichever options one does not want as part of the computer. So your friend goes ahead and deletes some of the options from the fully loaded model.

From the above-mentioned situations, one can see that there are two ways in which a firm can offer a customisable product. In the first case, the buying decision is framed by asking the consumer to add the desired product options to the base model. However, in the second case, the buying decision is framed by asking the consumer to remove the undesired options from the fully loaded model.

Does it really matter whether you add or remove? If adding and removing are equivalent tasks, then the final configurations should be equivalent. However, research suggests the task frame of adding versus removing impacts consumers’ final choice: adding typically results in a smaller final configuration than removing. In other words, consumers end up with a larger number of options and a more expensive final product when faced with a “remove” task than when faced with an “add” task.

Why does this occur? In both the situations, consumers should experience a loss; either a loss in money when adding options (the price goes up when an option is added), or a loss in features when removing options (you lose options/features when you remove). Prior research suggests that consumers should be less averse to losing money than to losing features. This is likely to be because a loss of money can be restored more easily than a loss of desired features.

Basically, the key takeaway is that consumers are easily influenced by the manner in which the customisation task is framed. An important lesson to be learnt is that consumers should first carefully evaluate the purpose of their purchase, and then customise the product to fit their need. Being aware of the framing effect of customisation will benefit consumers and avoid unnecessary purchase of products which they really do not want. 


 


 

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