The Effect of Cultural Orientation on Consumer Responses to Personalization

Abstract

While marketing activities increasingly involve personalizing product offers to individually elicited preferences, these unique specifications may not be universally important for product choice. Providing evidence of the limits of treating each customer differently, three experiments show that individuals who exhibit interdependent or collectivistic tendencies tend to be more receptive to recommendations that are not personalized to their own preferences, but instead to the collective preferences of relevant in-groups. However, we find that cultural orientation affects responses to personalized recommendations for only those products whose consumption or choice decision is subject to public scrutiny. We further demonstrate that the favorability of thoughts elicited by ads offering targeted versus personalized offers mediates the effect of cultural orientation on responses to personalization. Lastly, both individualistic and collectivistic consumers respond more favorably to offers of targeted recommendations when they believe relevant others share their preferences and when their level of expertise is relatively low.

Keywords: personalization, personal recommendations, culture

JEL Classification: M30, M31