PERSONALIZATION

Personalization

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Personalization

Introduction

This paper explores the concept of personalization in detail. The paper also discusses individual-level price discrimination in the context of personalization, as well the effective role of personalization.



Discussion

Personalization Consortium (2005) defines Personalization as the interaction between each customer and a business to mold electronic commerce based on technology and information of customer information. This customer information can be obtain from prior information obtained in real-time, the parties exchange between is altered to address appropriately customer needs and must be integrated with business needs. Personalization is a specialized form product differentiation and solutions are modified for a specific customer. It facilitates customers by providing low price or convenience; companies' introduce individualized customer web experience, and individualized interaction based on implied preferences for specific individual.

Pine and Gilmore (1999) asserted five types of Personalization include segment marketing, adaptive personalization, cosmetic personalization, transparent personalization and the personalization collaborative customization. The basic idea of personalization is to focus on customer preferences, provide customer a variety of options, package and content of a standard good is being changed, and emphasize on collaborative effort of customer and organization. The information of a customer can be acquired from purchase, behavioral and demographic information, customer personal choice and through direct interaction. Personalization is based on customer interaction, and data gathered from customers will be analyze and data mining and used for differentiation, segmentation, targeting and customization.

Personalization concept is based on the interaction between customers and marketers, in order to create value for both customers and marketers. Personalization is a two way process, and possess benefits for both marketer and customer. Companies have an advantage in terms of benefits and cost such as increase in customer loyalty, provide a competitive edge through differentiation, increase customer satisfaction, rates of responses get better, and increase profitability. All these benefits results in companies' stability, effective delivery of goods /services, increase profitability, and sustainable long-term growth (Vesanen, 2007).

Before going for personalization, the firm must decide a suitable marketing mix for a specific individual, and predominately based on prior gathered data of customer. There are four basic steps of personalization includes identify - customer based on previous information about preferences or needs to satisfy the customer; differentiate - customer differentiation based on priorities and based on these needs priorities segment them into groups to gain customer loyalty; interact - interaction is the most important component of personalization ...