Customerization

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  • Topic: Marketing, Marketing strategy, Mass customization
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CUSTOMERIZATION: THE NEXT REVOLUTION IN MASS CUSTOMIZATION
Jerry Wind Arvind Rangaswamy f
YORAM (JERRY) WIND is the Lauder Professor and Professor of Marketing, Director of the SEI Center for Advanced Studies in Management, and Director of the Wharton Fellows in e-Business Program, The Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania. ARVIND RANGASWAMY is the Jonas H. Anchel Professor and Professor of Marketing and Research Director of the eBusiness Research Center, Penn State University. We are grateful to Tom Parker who conducted most of the interviews for this article, to Robert Gunther for editorial assistance and to Colin Crook for his most helpful comments.

ABSTRACT In this conceptual paper, we propose that the next stage of evolution of mass customization is customerization—a buyer-centric company strategy that combines mass customization with customized marketing. Spurred by the growth of Internet and related technologies, many leading companies (e.g., Dell) are beginning to deploy customerization on a large scale. In this paper we define customerization, and describe how it is different from the related strategies of mass customization, personalization, and one-to-one marketing. We also describe the opportunities and challenges companies face in deploying a customerization strategy, and the potential benefits that they might realize.

© 2001 John Wiley & Sons, Inc. and Direct Marketing Educational Foundation, Inc. f JOURNAL OF INTERACTIVE MARKETING VOLUME 15 / NUMBER 1 / WINTER 2001

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JOURNAL OF INTERACTIVE MARKETING

I. INTRODUCTION
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 configurations that have already been approved by their companies. These are examples of what we call customerization, a redesign of marketing from the customers’ 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. From Mass Customization to Customerization. Customerization encompasses more activities and functions than mass customization of products. Hart (1996) defines mass customization as “using flexible processes and organizational structures to produce varied and often individually customized products and services at the price of standardized mass-produced alternatives.” As an illustration consider Cannondale (www.cannondale.com). This company can configure over 8 million different frame and color variations in its bicycles. Likewise, Motorola’s Bravo pagers can be configured in millions of possible combinations varying in such dimensions as color and shape. But how do these companies translate this ability to produce numerous product options into customized shopping, purchasing, and consumption experiences for their customers? This requires customized marketing, not just mass customization. In fact, mass customization is just a step toward realizing customized marketing. We propose the term “customerization” to distinguish JOURNAL OF INTERACTIVE MARKETING



mass product customization from the new approach that combines mass customization with customized marketing. It is important to recognize that to be good at customerization, a company need not have any manufacturing capabilities at all! As an...
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