Customerization

Customerization

A new type of mass customization is redefining marketing and business strategies. Many companies now offer highly customized products in a wide range of categories, including sneakers, coffee, dental products, newspapers, vitamins, bicycles, cars, golf clubs, eyeglasses, garden design cosmetics, and greeting cards. Some companies, such as priceline.com and DealTime.com have customized the price determination process; they let customers specify their own prices and then try to locate providers who are willing to sell at those prices. Companies, such as Dell, establish custom websites (called premier pages) for their business customers, whose employees can then order computer configuration that have already been approved by their companies. These are examples of what we call Customerization, a redesign of marketing from the customer’s perspective. These companies are doing more than catering to new markets or delivering custom-made products at lower prices; they are transforming the practice of marketing from being seller-centric to being buyer-centric. Customerization encompasses more activities and functions than mass customization of products. Mass customization as defined by Hart (1996) is “using flexible processes and organizational structures to produce varied and often individual customized products and services at the price of standardized mass-produced alternatives.”

Both mass customization and Customerization are attempts to provide products and services that better match the needs of customers-they are two sides of same coin. Both are IT-intensive. However, mass customization is IT-intensive on the production side, whereas Customerization is IT-intensive on the marketing side. Also, Customerization is inherently dependent on internet and related technologies as a vehicle for implementing this concept in an economical way.

In developing a strategy for Customerization, a company should be guided not only by customer’s wants and needs that are best satisfied by customized offerings, but also its operational capabilities. Customerization is a critical aspect of the emerging new marketing paradigm, which has enormous implications for a firm’s marketing strategy, and, more importantly, for the entire business strategy and operations of the firm. Fundamentally, Customerization requires and effective integration of marketing, operations, R&D, finance, and information.