Marketing in the 21st Century
The Era of Personalized Marketing
View of Personalization
With the technology advantages, marketers pay more attention on personalization to increasingly improve their marketing strategies and performance (Vesanen, 2007). In marketing mix, personalization is a process, in which companies individually focus on the customizability of the product or service based on the customer’s characteristics to promote sale and service. Capital One promotes the individualized credit card design, for example, is one of the evidences that marketing pertinently leverages technologies in personalized marketing strategies.
One-on-one marketing requires the investment in ...view middle of the document...
Transparent personalization combines the information provided from customer and the information from the purchase history to create the content of advertisement.
Personalization helps build customer satisfaction and loyalty. Customization of the product or service based on personal references is, in addition, a personalization process. Collaborative customization allows consumers to involve in the development process. For instance, according to their website, VisualHOMES, a software application for public housing management, works with the clients in series of collaborative sessions to modify the product that satisfies the need of the clients. Kotler and Keller (2009) suggest that personalized marketing must consider a relevant challenge about customer uniqueness, satisfaction, and involvement.
Recently pricing practices have significantly changed because of the Internet evolution (Kotler & Keller, 2009). In three levels of price discrimination, individual-level price discrimination, a dynamic pricing, is utilized much in the Internet today (Garbirino & Lee, 2003). With the Internet and advantages of new technologies, pricing practice has shifted towards personalization trend. Ghose and Huang (2009) argue that the price offered to customers whose perception about knowing product or service is different. Personalized pricing practice enables businesses to charge customer differently for the same product or service.
Garbirino and Lee (2003) argue that strong customer relationships require a preserving consumer trust because it is a crucial component for businesses to use in their acquired information. Additionally, technology provides a transparency in pricing discrimination and a review of the demand-based pricing. Dynamic pricing, therefore, decreased its cost but increased its risks of being apparent to customers (Garbirino & Lee, 2003). Because of a potential of losing trust among customers, dynamic pricing should not be a good strategy in personalized marketing.
The Roles of Personalized Marketing
Vesanen (2007) suggests the benefits of one-on-one marketing and the management of customer relationship together drives the needs for personalization. Additionally, the customer perception of product or service is an important factor for pricing and consumer loyalty. Businesses can create a strong rapport with customers by practicing individualization and personalization (Kotler & Keller, 2009). Personalization helps bond the customer relationship and loyalty because of the individual specialties in the personalized process.
Internet and e-commerce, as known by many researches, plays an important role in the vigorous interactions between businesses and customers. For example, following Amazon.com, many online businesses focus on the customer reviews or online testimonies because these give potential consumers information of the product or service offered from them. According to Mudambi and...