Sample Thesis: Introducing Modular Product Architecture for Consumer Behaviour and Organisational Performance: The Moderating Role of Sustainability – A Conceptual Framework
This study examines the relationship between modular product architecture and consumer behaviour and organisational performance. The moderating role of sustainability in this relationship is also investigated. The conceptual framework that demonstrates how these variables relate to each other is presented as follows.
Figure 1: Conceptual Framework
Source: Based on Qudrat-Ullah (2018, 114), Hankammer et al. (2018, 146), Mesa et al. (2021, 80)
As the world is becoming more and more globalised, many companies operating on an international scale have faced a major challenge of addressing the needs and expectations of a highly diverse consumer population to keep their goods and services attractive and maintain their competitiveness (Yan et al., 2022). Addressing this goal requires modifying and adapting a product to different markets and customers. At the same time, a higher level of product and service adaptation inevitably results in increased production costs, which goes in contradiction with the ultimate goal of any business entity, which is to maximise profit (Machado & Morioka, 2021). The emergence of modular product architectures could be viewed as a response to this challenge and an attempt to optimise the trade-offs between product customisation by increased fit to the varying needs and wants of consumers and economies of scale supplemented by product standardisation (Fadeyi & Monplaisir, 2022).
Modular product development is associated with the increased design and data reuse at many levels, starting from solution and interface to component and structure, which not only reduces the needed design effort but can also lead to quality, cost, and time benefits (Amend et al., 2022). Modularisation also provides a wide range of benefits to consumers, which makes it a win-win solution. One of the main benefits provided by modular product architectures is a greater level of product and service customisation and personalisation (Aziz et al., 2016). According to the existing literature, modular products are generally more attractive because of their closer fit to customer needs as compared to standardised goods and services (Wang & He, 2022). For example, the automotive industry is characterised by a high level of modularity, as consumers can select from a range of pre-defined standard options. In addition to a high personalisation level, modular product development can be linked to product quality management, since the reuse of designs can contribute to the reliability of key components due to incremental improvements (Amend et al., 2022).
All the aforementioned benefits are expected to influence consumers’ behaviour and make modular products more attractive to them as compared to standardised goods. Within the scope of this study, consumer behaviour is defined as the actions that the consumers take in the marketplace, as well as the underlying motives behind those actions (Kristianto & Helo, 2014). The willingness to purchase and the act of purchasing are commonly viewed as the cornerstones of consumer behaviour, at least from the standpoint of marketing. However, the traditional marketing theory implies that advertisement is the key marketing activity that affects consumers’ willingness to buy a product or service (Fadeyi & Monplaisir, 2022). Still, the role of intrinsic factors and motivators in consumers’ decision to purchase a particular product or service is considerable. For example, the extent to which a product is in line with a consumer’s values produces a strong impact on their purchase behaviour, as the recent marketing literature suggests (Ülkü & Hsuan, 2017).
The modularity of products enables companies to increase commonality without sacrificing variability, which leads to more efficient operations, reduced costs, and increased flexibility (Qudrat-Ullah, 2018). However, while modular product architectures are not new by any means, their contribution to consumers’ willingness and intention to purchase modular products has not been extensively explored. On the one hand, there is empirical evidence, according to which modularity better addresses consumer needs and wants due to a wide range of options or modules they can select from (Pakkanen et al., 2022). Easier reparability, technology upgrading, refurbishing, and longer product lifetime are among the main benefits that consumers derive from modular products (Ülkü & Hsuan, 2017). On the other hand, the extent to which the perceived benefits of modular products affect consumers’ purchase intention remains an under-researched area. For instance, since modular products often contain more parts than integral products, they may be bulkier and, hence, less attractive to consumers. In addition, the interfaces between modules may be vulnerable to a threat of a potential interface loss (Qudrat-Ullah, 2018). Given that modular products suffer from limited function sharing across modules, their physical architecture is likely to be redundant, leading to lower performance and decreased usability.
In recent years, the issue of sustainability in general and green consumption in particular has attracted much academic and public attention (Ülkü & Hsuan, 2017). Increasing energy consumption and carbon dioxide (CO2) emissions have put business entities and their production processes and architectures under serious scrutiny, forcing them to opt for more sustainable options and solutions (Panda et al., 2020). Moreover, consumers are increasingly becoming aware of companies’ production processes and the impact they produce on the environment, which is another reason why the issue of environmental and social sustainability is now treated very carefully by most organisations (Qudrat-Ullah, 2018). Recent research demonstrates that sustainability-conscious consumers more actively purchase goods and services from those brands that they consider sustainable (Panda et al., 2020). With that being noted, the extent to which companies are perceived as environmentally and socially sustainable is predominantly based on the information that these organisations source. For instance, corporate social responsibility (CSR) reports, sustainability reports, and online publications are among the main channels used by business entities to communicate their sustainability to stakeholders (Asadi et al., 2019). In their attempt to appear more sustainable than they are, companies could potentially engage in greenwashing and bluewashing.
Many previous studies have linked modular product architectures to sustainability. According to these studies, modular design positively affects organisational performance in various life cycle processes, including maintainability, recyclability, disassembly, reusability, and reparability (van Oorschot et al., 2021). Modular design built into the product can also make the supply chain greener and more environmentally sustainable (Kristianto & Helo, 2014). Therefore, one can assume that modular product architectures extend the product lifetime, contribute to the pollution value of product components, and lead to reduced product development costs. At the same time, there is little evidence in the existing literature on how the aforementioned sustainability benefits of using modular product architectures are communicated to consumers and potential buyers (Pakkanen et al., 2022).
As previously noted, sustainable consumption has recently become a buzzword in the marketing domain, suggesting companies could capitalise on this trend to become more competitive. The point is that environmentally conscious consumers are willing to pay a premium for a product that is produced and manufactured responsively and in a sustainable manner (Ülkü & Hsuan, 2017). Given that modularity is associated with a higher level of sustainability as compared to integrated goods, companies that actively communicate the use of modular product architectures to their customers could make their products more attractive and contribute to their financial performance. However, the environmental attribute of a product is not the only factor that could influence the consumer’s purchase decision. Moreover, environmental sustainability is not a well-defined term, which results in its different use by companies and consumers (Mesa et al., 2021). Hence, what a firm views as a green manufacturing process does not necessarily match a consumer’s sustainability perceptions.
The relationship between modular products and consumer behaviour was empirically investigated by Amend et al. (2022). The researchers examined whether modular smartphone design contributed to the likelihood of consumers using and having a positive experience with repair instructions as compared to professional repair services. By analysing primary quantitative data obtained from around 600 smartphone owners, Amend et al. (2022) concluded that the use of modular product architectures added to the self-reparability of the smartphone, which, in turn, contributed to its lifetime. Similar outcomes were demonstrated by Kristianto and Helo (2014), who noted that modular design allowed consumers to easily replace a broken or malfunctioning module, adding to the time of ownership, as opposed to integral products that tend to have a shorter lifetime.
From the standpoint of sustainability, a longer lifetime could be associated with several positive environmental impacts. For example, longer product lifetimes decrease negative external effects, including greenhouse gas emissions, waste, erosion, acidification, the loss of biodiversity, and toxification (Mesa et al., 2021). Therefore, the implementation of modular product architectures could add to a company’s environmental sustainability, as well as make its offerings more attractive to environmentally-conscious consumers who are ready to pay a premium for sustainable products (van Oorschot et al., 2021). On the contrary, modularity can result in the loss of sales for manufacturers, as they can sell fewer items due to increased product lifetimes. Moreover, the use of modular product architectures can incur additional hidden costs associated with increased exposure to liability from guarantees (Asadi et al., 2019). Finally, modularity diminishes the effectiveness of a company’s research and development (R&D) efforts, because there is no need in investing in new product generations. As a result, the innovativeness of business entities and, hence, their long-term competitiveness are likely to be threatened.
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