Literature Review of Mass Customization in the Hospitality Industry: Concepts and Applications

1. Mass Customization in the Hospitality Industry:
Concepts and Applications
Presenter: Duong Nguyen

2. Table of Contents
1. Definition of mass customization
2. Key decision factors in implementing mass customization
3. Four approaches to mass customization
4. Mass customization in hospitality industry
5. Case study: Ritz Carlton Hotel
6. Take-away

3. What is Mass Customization?
• Visionary definition: Ability to provide customers anything they want profitably, at any
time, anywhere and in any way.
• Practical definition: The use of flexible processes & organizational structures to produce
varied and often individually customized products and services at the low cost of a
standardized, mass production system.
Mass Customization Invention
Mass Production
Continuous
Amelioration
stable
dynamic
Change of processes
stable
Changeofproduct
dynamic
Source: Mass Customization in the Hospitality Industry: Concepts and Applications. Mok C., Stutts A., & Wong L. 2000.

4. Should companies pursue a mass customization
strategy?
• Customer sensitivity
• Do customers care whether a company offers more customization?
• Process amenability
• Technology
• Marketing
• Design
• Production & Distribution
• Competitive environment
• First-movers???
• Competitor’s analysis
• Organizational readiness
• Company’s culture & resource
Source: Mass Customization in the Hospitality Industry: Concepts and Applications. Mok C., Stutts A., & Wong L. 2000.

5. Four Approaches to Mass Customization
Transparent Collaborative
Adaptive Cosmetic
No change
No change
Representation
Change
Product
Change
Source: The Four Faces of Mass Customization. Gilmore J. & Joseph B. 1997.
***Many companies combine two or more approaches in order to meet
individual customers’ specific needs.

6. Where to start Mass Customization
• Modularize your capabilities - Break everything apart into modular elements like LEGO
building bricks
• Create a design tool to find out customers’ needs
• Provide the design tool to customers
• Customize products / services as customers’ requests
• Remember your customers’ preferences to lower your customers’ sacrifice next time
Source: Beyond Mass Customization. Joseph B. 2011.
Don’t overwhelm customers with too much choice.
Fundamentally customers don’t want choice; they just want
exactly what they want.

7. Source: Hilton Hhonors Android App

8. Mass Customization in Fast-food Industry
Source: Google Image

9. Mass Customization in Lodging:
Ritz Carlton Hotel
Commodity Hotels Novelty Hotels
Price Location Style
Ritz Carlton Hotels
• Use information systems to collect, store and disseminate customers’ information
among Ritz Carlton Hotels
• CRM app: CLASS (Customer Loyalty Anticipation and Satisfaction System)
• Employees quietly observe guests, learn their preferences and store the data into
the system
• Offer pre-orders via Ritz Carlton websites & apps
 When guests check-in, front desk staffs will give them the room, location, pillow,
blanket and basket of fruit they prefer
Source: Invented Here: Maximizing Your Organization's Internal Growth and Profitability. Victor B. & Boynton A.

10. Take-away
• Mass customization helps companies to offer customers the products / services they
want at a low cost.
• There are four approaches to mass customization
• Transparent
• Adaptive
• Cosmetic
• Collaborative
• Information technology can take an important role in helping companies to do mass
customization
• But don’t overwhelm customers with choices.

12. References
• Mok C., Stutts A., & Wong L. (2000) Mass Customization in the Hospitality Industry:
Concepts and Applications. Fourth International Conference “Tourism in Southeast Asia and
Indo China: Development, Marketing, and Sustainability.
• Gilmore J. & Joseph B. (1997) The Four Faces of Mass Customization. Harvard Business
Review.
• Joseph B. (2011) Beyond Mass Customization. Harvard Business Review.
• Victor B. & Boynton A. (1998) Invented Here: Maximizing Your Organization's Internal
Growth and Profitability. Harvard Business School Press.
• Hilton Hhonors Android App
• Google Image