Putting one-to-one marketing to work: Personalization, customization, and choice

Abstract

The tailoring of a firm’s marketing mix to the individual customer is the essence of one-to-one marketing. In this paper, we distinguish between two forms of one-to-one marketing: personalization and customization. Personalization occurs when the firm decides what marketing mix is suitable for the individual. It is usually based on previously collected customer data. Customization occurs when the customer proactively specifies one or more elements of his or her marketing mix. We summarize key challenges and knowledge gaps in understanding both firm and customer choices in one-to-one markets. We conclude with a summary of research opportunities.

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Notes

  1. 1.

    While our terminology is consistent with that of others (e.g., Murthi and Sakar 2003; Syam et al. 2005), these terms are often used interchangeably in the literature.

  2. 2.

    Sprint Nextel, http://www1.sprintpcs.com/explore/ueContent.jsp?scTopic=personalized, Retrieved on Aug 10, 2007.

  3. 3.

    “Personalized Marketing Software Overcomes Demand Generation Challenges in the Business-to-Consumer Marketplace,” http://www.l2soft.com/Case_Portola.pdf, Retrieved on Aug 09, 2007.

  4. 4.

    Infoworld—December 13, 1999, Retrieved on Aug 9, 2007.

  5. 5.

    E-week Business magazine—November 27, 2000, Retrieved on Aug 9, 2007.

  6. 6.

    Mass-customization in clothing, http://www.mass-customization.de/case.htm, retrieved on August 10, 2007.

  7. 7.

    Mass-customization and open innovation news, March 2006, http://mass-customization.blogs.com/mass_customization_open_i/furniture_home/index.html, retrieved on August 09, 2007.

  8. 8.

    Service customization—February 28, 2007, http://mass-customization.blogs.com/mass_customization_open_i/service_customization/index.html, retrieved on August 9, 2007.

  9. 9.

    Collaborative filtering uses transaction data of related previous purchases as input and, all else equal, more transaction records render more relevant recommendations.

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Arora, N., Dreze, X., Ghose, A. et al. Putting one-to-one marketing to work: Personalization, customization, and choice. Mark Lett 19, 305 (2008). https://doi.org/10.1007/s11002-008-9056-z

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Keywords

  • One-to-one marketing
  • Customization
  • Personalization
  • Marketing mix
  • Choice