Putting One-to-One Marketing to Work: Personalization, Customization and Choice

Marketing Letters, 2008

25 Pages Posted: 14 Apr 2008 Last revised: 4 Apr 2012

See all articles by Neeraj Arora

Neeraj Arora

University of Wisconsin - Madison - Department of Marketing

Xavier Dreze

University of Pennsylvania - The Wharton School

Anindya Ghose

New York University (NYU) - Leonard N. Stern School of Business

James D. Hess

University of Houston

Raghuram Iyengar

University of Pennsylvania - Marketing Department

Bing Jing

New York University (NYU) - Department of Information, Operations, and Management Sciences

Yogesh V. Joshi

University of Maryland - Department of Marketing

V. Kumar

Georgia State University

Nicholas H. Lurie

University of Connecticut School of Business

Scott Neslin

Dartmouth College - Tuck School of Business

S. Sajeesh

University of Nebraska - Lincoln

Meng Su

Guanghua School of Management

Niladri B. Syam

University of Houston - C.T. Bauer College of Business

Jacquelyn Thomas

Northwestern University - Integrated Marketing Communications Program

Z. John Zhang

University of Pennsylvania - The Wharton School - Department of Marketing

Abstract

One-to-one marketing advocates tailoring of one or more aspects of the firm's marketing mix to the individual customer (Peppers and Rogers 1997; Peppers, Rogers and Dorf 1999; Shaffer and Zhang 2002). One-to-one marketing represents an extreme form of segmentation, with a target segment of size one. There are two forms of one-to-one marketing: personalization and customization. Personalization is when the firm decides, usually based on previously collected customer data, what marketing mix is suitable for the individual. A good example is Amazon.com's personalized book and music recommendations (Nunes and Kambil 2001). The e-commerce arena is replete with other instances of personalization. Nytimes.com allows readers to get personalized news articles of interest, MLS.ca in Canada screens houses for buyers depending on their preferences for location, size and features. Customization is when the customer proactively specifies one or more elements of his or her marketing mix. Dell computer allows customers to customize the computer they order. The MyYahoo feature at Yahoo.com allows users to specify elements of their home page such as the weather forecast, reports on their favorite stocks, or priorities given to local sports news.

The purpose of this paper is to summarize key challenges and knowledge gaps in understanding the choices that both firms and customers make in a personalization/customization environment. We start with a summary of personalization and customization in practice, and then draw on research in economics, statistical, and consumer behavior to identify what we know and do not know. We conclude with a summary of key research opportunities.

Keywords: one-to-one marketing, CRM, customization, choice

Suggested Citation

Arora, Neeraj and Dreze, Xavier and Ghose, Anindya and Hess, James D. and Iyengar, Raghuram and Jing, Bing and Joshi, Yogesh V. and Kumar, V. and Lurie, Nicholas H. and Neslin, Scott and Sajeesh, S. and Su, Meng and Syam, Niladri B. and Thomas, Jacquelyn and Zhang, Z. John, Putting One-to-One Marketing to Work: Personalization, Customization and Choice. Marketing Letters, 2008. Available at SSRN: https://ssrn.com/abstract=1118822

Neeraj Arora

University of Wisconsin - Madison - Department of Marketing ( email )

975 University Avenue
Madison, WI 53706
United States
(608) 262-1990 (Phone)
(608) 262-0394 (Fax)

Xavier Dreze

University of Pennsylvania - The Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

Anindya Ghose

New York University (NYU) - Leonard N. Stern School of Business ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States

James D. Hess

University of Houston ( email )

Houston, TX 77204
United States

Raghuram Iyengar

University of Pennsylvania - Marketing Department ( email )

700 Jon M. Huntsman Hall
3730 Walnut Street
Philadelphia, PA 19104-6340
United States

Bing Jing

New York University (NYU) - Department of Information, Operations, and Management Sciences ( email )

44 West Fourth Street
New York, NY 10012
United States
212-998-0822 (Phone)

Yogesh V. Joshi

University of Maryland - Department of Marketing ( email )

College Park, MD 20742
United States

V. Kumar

Georgia State University ( email )

35 Broad Street
Atlanta, GA 30303
United States

HOME PAGE: http://www.drvkumar.com

Nicholas H. Lurie

University of Connecticut School of Business ( email )

Storrs, CT CT - Connecticut 06269
United States

HOME PAGE: http://www.business.uconn.edu/person/nicholas-lurie/

Scott Neslin

Dartmouth College - Tuck School of Business ( email )

Hanover, NH 03755
United States

S. Sajeesh

University of Nebraska - Lincoln ( email )

United States

Meng Su

Guanghua School of Management ( email )

Peking University
Beijing, Beijing 100871
China

Niladri B. Syam (Contact Author)

University of Houston - C.T. Bauer College of Business ( email )

Houston, TX 77204-6021
United States

Jacquelyn Thomas

Northwestern University - Integrated Marketing Communications Program ( email )

Evanston, IL
United States

Z. John Zhang

University of Pennsylvania - The Wharton School - Department of Marketing ( email )

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