Personalized Marketing Essay Example | Topics and Well Written Essays - 1750 words

Personalized Marketing - Essay Example Recent research has confirmed that most firms have several tiers of customers in terms of profitability and that these tiers often have different service expectations and needs. According to Valarie Zeithaml, Roland Rust and Katharine Lemon (2001), it's critical that service firms understand the needs of customers with different profitability tiers and adjust their service levels accordingly. So more and more marketing led organizations are moving towards personalized/customized relationship marketing to know and filfill the actual needs of the customers. This new orientation has its roots in American (Berry, 1982) and Nordic (Gummensson, 1987) concepts. Supporters of this new form of marketing argue that in order to survive in the markets which has become more competitive and more turbulent, organizations must move away from managing transactions and instead focus on building long lasting customer relationships ( Webster,1992). Research by Kevin Gwinner, Dwayne D. Gremler and Mary Jo Bitner (1998) suggests that relationships create value for individual customers through such factors as inspiring greater confidence, offering social benefits and providing special treatment. Piyush Kumar (1999) emphasizes that relationships strengthen in a business to business are dependent largely on the quality of the interactions between individuals at each of the partnering firms. As r elationships strengthen over a period of time, he observes the service provider's personnel often assume the role of outsourced departments and make critical decisions on behalf of their clients. In the process of developing relationship with customers, personalization has been preceded by mass customization. Mass customization emphasized on satisfying a specific segment of the customers from a production perspective (Pine II et al., 1995) whereas personalization specifically depends on satisfying the needs of an individual. So reaching out to an individual customer, knowing the needs of the customer and then providing product or services required is all about personalizing the marketing. In the hyper competitive situation and advent to interest and database about individual customer has equipped companies to customize their product or services according to individual customer. Prior to advent of electronic/internet communication, personalization was available only to selected few for selected product or services at premium prices (Mattilla, 1999). Personalization of marketing has taken place due to emergence of internet technology and providing opportunities to the organization to have one to one relationship with the customer. Riecken (2000) states, personalization is about building meaningful one to one relationship; by understanding the needs of each individual and helping satisfy a goal that efficiently and knowledgeably addresses each individual need in the given context. Personalization of product or services increases the differentiation and helps in positioning of the product or services. Customizing the product or services to the needs of single customer has been facilitated by the modern information technologies. More and more information about customers and their needs of services and products is the basic requirement of personalization. Differe nt methods of data gathering about customers i.e. customers profile give an insight of new