Flevy Management Insights Q&A

How do emerging trends in consumer behavior impact Make vs. Buy decisions in product development and marketing?

     Joseph Robinson    |    Make or Buy


This article provides a detailed response to: How do emerging trends in consumer behavior impact Make vs. Buy decisions in product development and marketing? For a comprehensive understanding of Make or Buy, we also include relevant case studies for further reading and links to Make or Buy best practice resources.

TLDR Emerging consumer trends in sustainability, personalization, and digital/omnichannel experiences significantly impact Make vs. Buy decisions, influencing product development and marketing strategies to align with consumer expectations.

Reading time: 5 minutes

Before we begin, let's review some important management concepts, as they related to this question.

What does Make vs. Buy Decisions mean?
What does Sustainability Practices mean?
What does Personalization Strategies mean?
What does Digital Transformation mean?


Emerging trends in consumer behavior significantly influence the Make vs. Buy decisions in product development and marketing. These decisions are critical as they directly impact an organization's ability to innovate, maintain competitive advantage, and align with consumer expectations. Understanding these trends helps organizations decide whether to develop capabilities in-house or outsource them to meet market demands effectively.

Impact of Sustainability and Ethical Consumption

One of the most prominent trends affecting Make vs. Buy decisions is the growing consumer emphasis on sustainability and ethical consumption. Consumers are increasingly favoring products that are environmentally friendly and ethically sourced. According to a report by Accenture, a significant portion of consumers globally are more likely to purchase from companies that demonstrate sustainability credentials. This shift in consumer behavior compels organizations to reconsider their product development and marketing strategies. For instance, an organization might decide to make its products in-house to ensure control over the supply chain, guaranteeing that all materials are sourced ethically and processes are environmentally friendly. Alternatively, companies might buy from suppliers who can prove their commitment to sustainability, thus aligning the product with consumer expectations without the need for in-house development.

Real-world examples include companies like Patagonia and Ben & Jerry's, which have built their brand identity around sustainability and ethical practices. These organizations often opt to make critical components of their products to maintain strict quality and ethical standards, demonstrating how Make vs. Buy decisions are influenced by consumer trends towards sustainability.

Moreover, marketing strategies are also impacted as organizations choose to highlight their sustainable practices and ethical sourcing in their campaigns. This not only requires a deep understanding of what consumers value but also necessitates that organizations have genuine sustainability practices in place, which can influence whether they decide to develop these capabilities internally or partner with external entities that align with their values.

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Technological Advancements and Personalization

Technological advancements have led to increased consumer expectations for personalized products and experiences. According to Deloitte, personalization can significantly influence consumer purchasing decisions, with a large percentage of consumers expressing a preference for personalized products or services. This trend pushes organizations to adopt more sophisticated technologies in product development and marketing to cater to individual consumer needs. The Make vs. Buy decision becomes crucial here as organizations must decide whether to invest in in-house technologies and capabilities to offer personalized products or services or to collaborate with external partners who specialize in these technologies.

For example, Nike has leveraged technology to offer personalized shoes through its Nike By You platform, allowing consumers to design their sneakers. This level of personalization requires significant in-house capabilities in both technology and manufacturing, showcasing a strategic Make decision influenced by consumer demand for personalization.

In marketing, personalization trends necessitate advanced data analytics and customer relationship management (CRM) systems to tailor communications and offers to individual consumers. Organizations might opt to buy these technologies from specialized vendors to quickly adapt to market demands, illustrating how consumer trends towards personalization affect Make vs. Buy decisions in both product development and marketing strategies.

Shift Towards Digital and Omnichannel Experiences

The shift towards digital and omnichannel experiences is another consumer trend profoundly impacting Make vs. Buy decisions. With the rise of e-commerce and digital platforms, consumers expect seamless experiences across all channels. A PwC survey highlights that omnichannel shopping has become the new normal, with consumers valuing the ability to switch seamlessly between physical and digital shopping channels. This trend challenges organizations to integrate their operations and marketing strategies across multiple platforms effectively. The decision to develop in-house digital capabilities or to buy/lease technology solutions from external providers is critical in ensuring a cohesive omnichannel experience.

Companies like Target and Walmart have invested heavily in their in-house digital transformation to create seamless omnichannel experiences, indicating a strategic decision to make these capabilities internally. These investments allow for better control over the consumer experience, from online shopping to in-store pickups.

On the marketing front, creating a unified brand experience across all channels requires sophisticated digital marketing platforms and tools. Organizations may choose to buy these solutions from external providers to leverage their expertise and quickly adapt to the digital landscape, highlighting how the trend towards digital and omnichannel experiences influences Make vs. Buy decisions.

In conclusion, emerging trends in consumer behavior, such as sustainability, personalization, and the shift towards digital and omnichannel experiences, have a profound impact on Make vs. Buy decisions in product development and marketing. Organizations must carefully consider these trends and their implications to make strategic decisions that align with consumer expectations and ensure competitive advantage in the market.

Best Practices in Make or Buy

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Explore all of our best practices in: Make or Buy

Make or Buy Case Studies

For a practical understanding of Make or Buy, take a look at these case studies.

Defense Procurement Strategy for Aerospace Components

Scenario: The organization is a major player in the aerospace defense sector, grappling with the decision to make or buy critical components.

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Telecom Infrastructure Outsourcing Strategy

Scenario: The organization is a regional telecom operator facing increased pressure to modernize its infrastructure while managing costs.

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Build vs. Buy Decision Framework for Semiconductor Manufacturer

Scenario: A semiconductor firm in the highly competitive technology sector is grappling with the strategic decision of building in-house capabilities versus buying or licensing from external sources.

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Luxury Brand E-commerce Platform Decision

Scenario: A luxury fashion house is grappling with the decision to develop an in-house e-commerce platform or to leverage an existing third-party solution.

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Make or Buy Decision Analysis for a Global Electronics Manufacturer

Scenario: A global electronics manufacturer is grappling with escalating operational costs and supply chain complexities.

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Global Supply Chain Optimization Strategy for Industrial Metals Distributor

Scenario: An established industrial metals distributor is facing a critical "make or buy" decision to improve its global supply chain efficiency.

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Related Questions

Here are our additional questions you may be interested in.

How should companies approach the make-or-buy decision in highly regulated industries differently?
In highly regulated industries, companies must adopt a comprehensive approach to the make-or-buy decision, considering Regulatory Compliance, Risk Management, Strategic Alignment, and long-term implications for sustainable success. [Read full explanation]
What is a make or buy analysis?
A make or buy analysis is a strategic framework for deciding whether to produce a product in-house or purchase it from an external supplier, considering cost, quality, and risk. [Read full explanation]
What are the key indicators that suggest a company should pivot from a "Buy" to a "Build" strategy, or vice versa, in response to market changes?
Discover when to pivot from a Buy to a Build strategy (or vice versa) by evaluating Cost, Time to Market, Core Competencies, and Strategic Fit for competitive advantage. [Read full explanation]
What role does corporate social responsibility (CSR) play in the Build vs. Buy decision-making process?
Integrating Corporate Social Responsibility (CSR) into Strategic Planning and Operational Excellence influences the Build vs. Buy decision, enhancing brand reputation, sustainability, and market competitiveness. [Read full explanation]
What impact do global supply chain disruptions have on the make-or-buy decision-making process?
Global supply chain disruptions significantly impact the make-or-buy decision-making process, emphasizing Risk Management, Strategic Alignment, Operational Excellence, and the need for agility, resilience, and innovation in sourcing strategies. [Read full explanation]
In what ways can the make-or-buy decision impact a company's sustainability goals and practices?
The make-or-buy decision significantly impacts an organization's sustainability by influencing environmental stewardship, social responsibility, and economic viability through direct control or supply chain influence. [Read full explanation]

 
Joseph Robinson, New York

Operational Excellence, Management Consulting

This Q&A article was reviewed by Joseph Robinson. Joseph is the VP of Strategy at Flevy with expertise in Corporate Strategy and Operational Excellence. Prior to Flevy, Joseph worked at the Boston Consulting Group. He also has an MBA from MIT Sloan.

To cite this article, please use:

Source: "How do emerging trends in consumer behavior impact Make vs. Buy decisions in product development and marketing?," Flevy Management Insights, Joseph Robinson, 2025




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