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Internet Marketing & e-Commerce Ward Hanson Kirthi Kalyanam Requests for permission to copy any part of the material should be addressed to: PERMISSIONS DEPARTMENT THOMSON BUSINESS and ECONOMICS 5109 Natorp Boulevard Mason, OH 45040 Phone: (800) 423-0563. Part Two: Chapter Nine Personalization .

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Part Two: Chapter Nine Personalization

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Part two chapter nine personalization

Internet Marketing & e-CommerceWard HansonKirthi KalyanamRequests for permission to copy any part of the material should be addressed to: PERMISSIONS DEPARTMENTTHOMSON BUSINESS and ECONOMICS5109 Natorp BoulevardMason, OH 45040Phone: (800) 423-0563


Part two chapter nine personalization

Part Two: Chapter NinePersonalization

“The rediscovery of the customer is a byproduct – perhaps the most important one – of the onset of the information revolution.”

Blattberg and Glazer, The Marketing Information Revolution


Benefits of personalization

Benefits of Personalization

  • Product distinction: a standard product becomes a specialized solution


Benefits of personalization1

Benefits of Personalization

  • Product distinction: a standard product becomes a specialized solution

  • Low cost access to luxury and status of personalized services


Benefits of personalization2

Benefits of Personalization

  • Product distinction: a standard product becomes a specialized solution

  • Low cost access to luxury and status of personalized services

  • Hard to evaluate experience goods become predictable search goods


Benefits of personalization3

Benefits of Personalization

  • Product distinction: a standard product becomes a specialized solution

  • Low cost access to luxury and status of personalized services

  • Hard to evaluate experience goods become predictable search goods

  • Survival through differentiation


Benefits of personalization4

Benefits of Personalization

  • Product distinction: a standard product becomes a specialized solution

  • Low cost access to luxury and status of personalized services

  • Hard to evaluate experience goods become predictable search goods

  • Survival through differentiation

  • Increased customer loyalty


The personalization balance

The Personalization Balance

  • Competitive advantage comes when personalization is supported by focus on customer-relating capabilities (CRC)


The personalization balance1

The Personalization Balance

SOURCE: George Day and Christophe Van den Bulte, “Superiority in Customer Rlationship Management,” working paper, Wharton School, September 2002


The personalization balance2

The Personalization Balance

  • Personalization efforts can produce backlash: First Class envy

  • Excessive personalization wastes time

  • Sometimes, standardization is just fine


Personalization approaches

Personalization Approaches

  • Mass Customization: blending standard products with individual information


Personalization approaches1

Personalization Approaches

  • Mass Customization: blending standard products with individual information

  • Choice Assistance: advice giving systems cut clutter of product choice


Personalization approaches2

Personalization Approaches

  • Mass Customization: blending standard products with individual information

  • Choice Assistance: advice giving systems cut clutter of product choice

  • Personalized Messaging: consumer needs and choices tracked across repeated interaction


Part two chapter nine personalization

Many Opportunities for Personalization

SOURCE: Adapted from Kai Riemer and Carsten Totz, “The Many Faces of Personalization,” in Tseng and Piller, The Customer Centric Enterprise, (New York/Berlin: Springer Verlag, 2003


Mass customization

Mass Customization

  • Customization of how a product is represented or of a product’s specific attributes through four approaches:

    • Collaborative

    • Cosmetic

    • Transparent

    • Adaptive


Mass customization1

Mass Customization

  • Collaborative Customization: Online reconfiguration of a product to match consumer preferences

    • Example: Choosing features for a new car


Mass customization2

Mass Customization

  • Cosmetic Customization: Packaging choices personalize standard products

    • Example: Choosing an iPod case

SOURCE: Getty Images


Mass customization3

Mass Customization

  • Transparent Customization: Product features learn the user and adjust accordingly

    • Example: Google Scholar


Mass customization4

Mass Customization

  • Adaptive Customization: Product features naturally customize themselves or are individually configured

    • Example: Weather reports by zip code


Choice assistance

Choice Assistance

  • Determining if a recommendation system could enhance online marketing:

    • Do customer lifetime values vary greatly?

    • Do customer needs vary greatly?

    • Are key product attributes qualitative or complex?


Choice assistance1

Choice Assistance

A recommendation system flowchart


Choice assistance approaches

Choice Assistance: Approaches

  • Rules-based: Combines information about customers with understanding of how products are used


Choice assistance approaches1

Choice Assistance: Approaches

  • Rules-based: Combines information about customers with understanding of how products are used

  • Computer-assisted self-explication (CASE): Advice generated from databases of consumer input


Choice assistance approaches2

Choice Assistance: Approaches

  • Rules-based: Combines information about customers with understanding of how products are used

  • Computer-assisted self-explication (CASE): Advice generated from databases of consumer input

  • Collaborative Filtering: For complex product choices, linking like-minded individuals for recommendations


Choice assistance approaches3

Choice Assistance: Approaches

  • Rules-based: Combines information about customers with understanding of how products are used

  • Computer-assisted self-explication (CASE): Advice generated from databases of consumer input

  • Collaborative Filtering: For complex product choices, linking like-minded individuals for recommendations

  • Endorsement: Virtual word-of-mouth referrals link users with preferred providers


Personalized messaging

Personalized Messaging

  • Users must be authenticated through a fixed, valid address

    • Online through Web servers, browser cookies or registration systems

    • Email and Instant Messaging accounts

    • Cell phones and wireless PDAs


Personalized messaging1

Personalized Messaging

Increasing levels of knowledge about Web user

  • Valid Name and Database

  • Valid Name

  • User ID

  • Cookies

  • Log Analysis

  • Online Behavior

  • Visitor Statistics

  • Anonymous


Personalized messaging2

Personalized Messaging

  • With an established address, online behavior patterns suggest best approach for personalized messaging


Personalized messaging3

Personalized Messaging

  • With an established address, online behavior patterns suggest best approach for personalized messaging

  • Distinct online events or inquiries can provide trigger moments for messaging

    • Example: A user searching for home value calculator could need real estate services


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