The ultimate level of segmentation leads to â€œsegments of one,â€? â€œcustomized marketing,â€? or â€œone-to-one marketing.â€?
Today customers are taking more individual initiative in determining what and how to buy. They log onto the internet; look up information and evaluations of product or service offers; dialogue with suppliers, users, and product critics; and in many cases, design the product they want.
More online companies today are offering customers a choice board, an interactive online system that allows individual customers to design their own products and services by choosing from menu of attributes, components, prices, and delivery options. The customerâ€™s selections send signals to the supplierâ€™s manufacturing system that set in motion the wheels of procurement, assembly, and delivery.
The Choice board is seen as a movement towards â€œcustomerizingâ€? the firm. Customerization combines operationally driven mass customization with customized marketing in a way that empowers consumers to design the product and service offering of their choice.
The firm no longer enquires prior information about the customer, nor does the firm need to own manufacturing. The firm provides a platform and tools and â€œrentsâ€? out to customers the means to design their own products. A company is customerized when it is able to respond to individual customers by customizing its products, services, and messages on a one-to-one basis.
Each business unit will have to decide whether it would gain more by designing its business system to create offerings for segments or for individuals. Companies that favor segmentation see it as more efficient, as requiring less customer information, and as permitting more standardization of market offerings.
Those who favor individual marketing claim that segments are a fiction, that individuals within so-called segments differ greatly and that marketer can achieve much more precision and effectiveness by addressing individual needs.
Examples of companies that employ customization:
Acumins: Internet-based vitamin company Acumins blends vitamins, herbs, and minerals according to a customerâ€™s instructions, compressing up to 95 ingredients into three to five â€œpersonalized pills.â€? The Acumins premise is simple and attractive: Why swallow dozens of pills when you can choose three pills with dozens of ingredients?
Paris Miki: The Japanese company Paris Miki, one of the largest eyeglass retailers in the World, uses a design tool that takes a digital picture of the customerâ€™s face. The customer describes the style he or she wantsâ€”sports, elegant, traditionalâ€”and the system displays alternatives on the computerized photograph. After selecting the frame, the customer also chooses nosepieces, hinges, and arms. The glasses are ready within an hour.
DeBeers: With DeBeersâ€™ Design Your Own Ring program, customers can design their own diamond rings by choosing from any of 189 unique combinations of center stone and side stone shapes and weights and band metal, as well as connect with a local jeweler who can help them buy it.
Customization is certainly not for every company. It may be very difficult to implement for complex products such as automobiles. Customization can raise the cost of goods by more than the customer is willing to pay.
Some customers do not know what they want until they see actual products. Customers cannot cancel the order after the company has started to work on the product. The product may be hard to repair and have little sales value. In spite, of this customization has worked well for some products.