Determinants of Customers' Responses to Customized Offers : Conceptual Framework and Research Propositions

Marketers have been challenged by proponents of individual marketing (e.g., one-to-one marketing) to shift from a focus on market segments to making individually customized offers. Individual marketing methods assume that customers have reasonably stable preferences that can be revealed by developing "learning relationships," and this knowledge can be used to create individually customized offers that will guarantee customer loyalty. Building on current knowledge regarding the construction of customers' preferences, the present research examines the basic assumptions underlying individual marketing and presents a process model of customers' responses to customized offers. The model addresses (a) the response antecedents, (b) the factors affecting the perceived (customized) offer's preference fit and the customer's willingness to accept the offer, and (c) the costs and benefits from the customer's perspective of committing to one-to-one relationships with marketers. This analysis leads to a number of specific propositions regarding moderators of customers' responses to customized offers. The theoretical and managerial implications of the research propositions are discussed