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One to one Marketing

Essay by   •  January 14, 2012  •  Case Study  •  1,594 Words (7 Pages)  •  1,630 Views

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One to one marketing

One to one marketing is an approach that concentrated on providing services or products to one customer at a time by identifying and then meeting their individual needs. As such it differentiates customers rather than just products. It is more than just sales approach. It is an integrated approach that must infiltrate all parts of an organisation: marketing, sales, finance, service, production etc. One to one marketing recognises that lifetime values of loyal customers who make repeat purchase far exceed that of fickle customers who constantly change supplier in search for a bargain. His is particularly true within financial services where the customers' acquisition costs are very high.

Whilst at first the concept appears to be only suitable for a niche market of rich clients, modern information technology, particularly the new interactive mediums provide an opportunity to bring personalised and customised products to the mass market, yet at a mass produced price. This is called Mass Customisation (production of personalized or custom-tailored goods or services to meet consumers' diverse and changing needs at near massproduction prices. Enabled by technologies such as computerization, internet, product modularization, and lean production, it portends the ultimate stage in market segmentation where every customer can have exactly what he or she wants)

Benefits of one to one marketing

Higher Profits

o One to One Marketing delivers economies of scope(Reduction in long-run average and marginal costs, due to the production of similar or related goods or services where the output or provision of an item 'A' reduces the cost of item 'B.'). Not economies of scale (The reduction in long-run average and marginal costs arising from an increase in size of an operating unit (a factory or plant, for example). Economics of scale can be internal to an organization (cost reduction due to technological and management factors) or external (cost reduction due to the effect of technology in an industry). See also diseconomies of scale).

o It initially concentrates on those 20% or even 10% of customers who are your most profitable.

o By providing tailored products to meet particular needs, you make comparative shopping difficult and you shift the focus from price to benefits.

o It aims for lifetime share of customer, not a share in an often static and crowded market.

By developing Mass Customisation capabilities, you can then extend the service to more customers. You then gain an ever increasing market share without the need to match the lowest price mass market supplier.

Lower Costs

o The cost of keeping profitable customers far outweighs the acquisition cost of new customers.

o With an intimate knowledge of individual customers, products and services can be more accurately targeted (right specification at the right time in the right way).

Market Exploitation

o It differentiates your company from the competition. Through collaborative working, customers tell you about their unmet needs and aspirations as well as their most pressing problems. You feed those needs directly into NPD. And by using Mass Customisation technology, you can actually feed those needs directly into your production line.

o Customers with whom you have a depth of relation, provide a rich source of new ideas that can also be exploited with other customers or with new prospects. As a result, NPD has lower risk of failure and a higher chance of beating the competition.

o Satisfied and loyal customers provide excellent references and referrals.

Limitations of one to one marketing


o One to One promotion needs to highlight individual possibilities and unique benefits. Timeliness of delivery is important.

o Design

o Customer needs will be better met where products and services can be personalised and customised easily.

o Your marketing department needs to take a component based approach and create identifiable basic building blocks.

o Rules will define the possible combinations and limits. Such rules will usually be held in a rules repository, along with the other business that define policies, processes, etc..

o Processes and IT systems will need to support this Lego™ like approach, not only in product development, but through marketing, sales, and servicing.


o Production systems needs to assemble the basic blocks according to the rules.

o This may be down by your sales staff, agents, distributors or your customers themselves (Mass Customisation).


o Profiles of individual customer products as well as profiles of the individual customers, need to be available to support staff throughout the life of the customer.


o Feedback during the any part of the marketing, purchase or support cycles needs to be encouraged and captured.

o Such data needs to be analysed, communicated, and acted on in a timely fashion, perhaps within minutes.

o Information provided by customers must be used sensitively and be kept secure.


o All staff will be need to be well trained and motivated to meet individual needs. The management style and organisational culture may well need changing.

o Staff need to be supported with good IT.

Information Technology

o A shared customer information system, data mining tools, interactive technologies, flexible component based systems, object technology systems, and rules based systems are key.

One to One Marketing requires a different approach:

o There is a need to manage your customers, not just your products.

o You must take products to customers, not expect customers to come products.

o Protecting privacy is important. Threatening privacy destroys trust and



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