Competing through manufacturing: countering a product’s liability of foreignness through mass customization

The operational capability of mass customization (MC) allows consumers to obtain products tailored to their idiosyncratic needs. This study aims to provide insights into the potential of this capability for countering a product’s liability of foreignness–the negative effect of the out-group status of a product’s country of origin (COO) on consumers’ evaluations of the product. Based on the social identity approach, it is hypothesized that this liability is reduced when a consumer product is mass-customized rather than standardized as per a mass-production strategy. This hypothesis is tested using a mixed between- and within-subject experiment. When evaluating mass-produced sneakers, native German-speaking (Italian-speaking) SouthTyrolean consumers rated the quality of Italian (German) sneakers significantly lower than that of German (Italian) sneakers. However, when the sneakers were mass-customized, this difference in perceived product quality was non-significant for both groups of consumers, supporting the research hypothesis. Future research could replicate this study in other samples, with other product types, COOs, and countries of destination, as well as at different degrees of product customization. Business-to-consumer firms contemplating the development of their MC capability are made aware that the benefits of this operational capability might go beyond the typical advantages highlighted by the existing literature. This paper joins the discussion on MC value by offering a theoretical explanation and empirical support for another mechanism through which the operational capability of MC can create value, at least in business-to-consumer industries: by countering a product’s possible liability of foreignness and thus increasing perceived product quality in export markets.