Customization

Customization refers to the efforts of companies to offer goods and services specifically designed or customized according to the needs of a particular customer, a group of customers, or an entire market (country). The core of customization or customization strategy is the focus on specific customer needs. The opposite of customization is standardization, which refers to the efforts of companies to offer a common product or common marketing programs throughout a particular market, region, or the whole world. Therefore, with respect to global business, companies pursuing the customization strategy or view treat each country as having unique features and customize their offerings accordingly instead of offering standardized products. That means that companies will modify their offerings according to differences in market characteristics, culture, industry conditions, legal environment, and marketing infrastructure (distribution channels, advertising agencies, and media) to better serve foreign consumers. Some terms used in the same or similar meaning with customization are adaptation, personalization, personalized marketing, and one-to-one marketing.

There are two broad strategies regarding international operations of companies: the global and the multidomestic strategy. In companies implementing the global strategy, products are the same across all countries in which the company operates and there is a centralized decision-making and control system. This strategy is appropriate when there are small differences across foreign markets with respect to the product the company offers; this strategy provides cost advantage and flexibility. However, companies [Page 465]pursuing the multidomestic strategy customize their offerings for each market and give these markets autonomy in decision making. This strategy is appropriate when there are significant differences across foreign markets and companies may better serve local customers if local needs and preferences affect buying behavior. Compared to the global strategy, the multidomestic strategy is harder to design and implement due to the existence of different factors to be considered in each foreign market.

From the marketing point of view, companies are expected to serve consumers better through customization than standardization since the ideal market segment size is one for which 100 percent customer satisfaction is needed. Therefore, customization at the individual level is the highest level of customization and assumes that each individual is different from others and thus has unique needs. Therefore, companies need to know the specific needs of each customer to be able to individually customize their offerings. For example, many computer producers now do not offer computers with only standardized configurations; instead, they give consumers the opportunity to configure computers according to their needs. Similarly, companies in many industries such as automobile, clothing, real estate, and tourism offer customization opportunities to best meet the needs of their customers.

However, it may not be possible for some companies to customize products at the individual level since such a high level of customization increases costs and requires additional resources. As a result, some companies implement customization at the consumer group or segment level as well. For example, the needs of children, teenagers, and adults may be different, and thus companies customize their offerings according to the group's needs; in addition to age, customers can also be segmented in many other ways, for example, climate, language group, media habits, education, and income.

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