The effect of modular design on customer perception

Today, the competition between firms has increased due to the continuous change in customer demands and needs. Depending on the increasing competition, firms develop different strategies according to their scale and the dynamics of the sector they operate. As a result of the strategies developed, companies are resorting to various changes to be made in new applications or in the current situation. Under strong competition conditions, all these efforts by firms to get a suitable position in the market cause increasing the complexity in many respects. At this point, modularity approach is proposed as a way of decreasing complexity, since it allows to break down a complex whole into simpler and independent components. In addition to the complexity, in order to adapt to the rapidly developing technology, to meet the changing customer demands as quickly as possible, to make the product or service customized, and to provide the same product or service in high volume and low cost when necessary, modularity is needed. Especially since 2000, the shift that takes place from the industrial society to the service society continues by increasing its speed. This rapid change in service area indicates that the growth in this area will be the same. Companies in the service sector must have a flexible structure in order to survive in the sector that has such a growth rate, to adapt to the changes and to do so in the most efficient way. In order to achieve all this modularity is a suitable tool. In the literature, generally; product, process, and organizational modularities have been taken into consideration, but with the increasing importance of the service sector, studies have been started about service modularity. In spite of the fact that its importance is understood, the number of studies on modularity in service systems is not enough. For this reason, this thesis will examine the reflection of modular services and modularity on the customer perception and it has been examined in private health insurance field. In the study, the relationship between modularity and competitive advantage and customer perception is examined. For this purpose, the relationship between the position of the market with modular service alternatives, the competitiveness and the size of the competitive span and the modularity of the market, the relationship between the actual position of the service alternatives and the modularity of that service alternative is discussed. The contribution of modular design to increasing the product variety will enable companies to meet different customer demands and thus create strategic competitive advantage. In this context, the concepts of customer orientation, customer perception, competitive advantage, strategic flexibility and market positioning are also included in the thesis study. The research questions regarding whether modularity is related to these concepts are as follows: (1) Are modular product variants that provide different functions and features perceived as differentiated products by customers? (2) Can modular product variants be used to achieve superior market positioning within a particular market segment? (3) Can the range of modular products enable them to compete in different market segments? First two research questions were analyzed for all the market segments where the results of the study were analyzed. In the proposed approach; experimental methods hypothetically created service options; inpatient treatment, outpatient treatment, healthy life support, tooth and eye modules. Inpatient and outpatient modules have two alternatives such as premium and standard. There are two alternative cases of healthy life support and whether or not the dental and eye modules are in the form of a private health insurance package. Therefore, 32 service alternatives were created. Evaluation criteria that describe the characteristics of the service alternatives in order to be able to examine how the customer perceives the service alternatives designed; It is determined to be "comprehensive", "effective / fertile", "beneficial", "giving a sense of confidence / value", "creativity / diversity", "expensive", "supporting health (well-being)", " trend". In the approach developed to respond to research questions, the survey method was used as the data collection method. Correlation coefficient, competitive span of brands, the ideal product and the competition strength was used to evaluate the research questions. A total of 145 respondents were found to be valid and included in the analysis. In this direction, in order to test the validity of the research questions in different market segments, survey participants were segmented. In order to perform market segmentation, clustering analysis was applied by means of Ward clustering method of hierarchical clustering methods and Euclidean distance as distance measure via MS Excel XLSTAT add-in. Since the number of participants in the first cluster from the three clusters formed as a result of the analysis is very low, this cluster has been neglected and the thesis study with the remaining two market segments has continued. In order to perform data analysis on the market segments obtained, multivariate statistical techniques have been evaluated and it has been decided to analyze the data with multi-way correspondence analysis. Ideal services and frequencies preferred by customers for both market segments have been identified. By means of the graph obtained through the correspondence analysis, the positions of the products relative to each other and their ideal services and the competitive spans were determined. According to the Mantel test result used in the analysis stage, the first research question; it has been found that there is a relationship between modular product variants offering different functions and features to the customers and perceived as differentiated products by the customers, but it is determined that the relationship is at a very low level because this level of relationship is 10%. Companies operating in private health insurance sector in the market; Acıbadem, Allianz, Anadolu, Groupama, Güneş and Mapfre private health insurance companies were also examined. The market position has been explored in detail according to the competitiveness of the brands, the size of the competitive span and the ideal service alternative preferred by the customers. As a result, the Allianz brand has been identified as the single and most competitive brand in both market segments, with the highest competitiveness, the largest competitive span and the most preferred service options by customers in both market segments. The second research question, which indicates that modular products and services should reach a superior position in the market, is confirmed by the results obtained with respect to Allianz brand, but it is seen that Groupama and Güneş Insurance brands, which have less modular service set in the market, are also advantageous in terms of market position. While Groupama and Güneş Insurance companies focus entirely on the preferences of a particular market segment; Allianz brand, which has a modular set of products, reflects the preferences of different market segments and addresses many market segments, that's why it has the largest competitive span. In addition to the diversity of modularity, it has been understood that there are different reasons such as lower costs, providing strategic flexibility, meeting customers' demands more quickly, and the only source of competitive advantage for companies is not service design. The last research question that questioned whether modular product diversity could compete in different market segments was confirmed by the results of the Allianz brand when the competition strength of brands was compared. However, it is partially confirmed that Groupama and Güneş Sigorta, which have fewer modular service sets in the market, have the closest competition strength value to the Allianz.