The Internet is driving a shift from mass marketed products built for the average consumer to a world in which goods and services are customised to consumer specific needs, a management consultant says at a seminar.
The evolution will shake up companies that are stuck in the traditional, or "aggregate" marketing model, according to Don Peppers, founder and president of the consulting firm Marketing 1:1 and co-author of "The One To One Future".
"This is not the same kind of marketing that we grew up with," Peppers says. "The rules are totally upside down."
Historically companies attempted to project demand for products and users tastes by sampling a population of consumers, obtaining a picture of the average customer and then churning out standardised products and services based on that picture.
However, the revolution driven by advances in microprocessor power -- and the subsequent reduction of cost of processing information -- coupled with the growth of the Internet, gives companies the tools for "mass customisation" of goods and services.
"The Web is the most appropriate, most cost-efficient and effective way of customising products to customers," Peppers says.
Blue jean maker Levis Strauss, of San Francisco, which to date has built its business on selling standard sizes of pants, now offers users optional custom fitting. A customer's measurements are now sent via a network to the company’s factory where tailored pants are made.
While many might argue that such granular customisation will raise costs, Peppers says such systems that are deployed by Levis eliminate the risk of unsold inventory which in the long run reduces costs.
In addition companies like Levis that add value to their products through customisation, will be able to charge more for them, he says.
Vendors using the World Wide Web can also query customers for preferences and use it to monitor behaviour. The gained knowledge can then be used to customise services and products, he says.
Using a Web site vendors need to create a dialogue through which they exchange information with customers.
Through the same kind of dialogue, removable storage maker Iomega, for instance, learned that some users of its drives bought Iomega products for reliability while others bought them for the ability to move large amounts of data between different work sites, he says.
With that knowledge, Iomega was able to add software that appealed to each type of user. For customers who need reliability the company added a weekly backup reminder, while a comparison of the differences in content on separate drives was added for customers using Iomega disks at different locations, he says.
The Internet also offers a business the ability to maintain the dialogue with customers and continually learn about their needs and to anticipate future desires.
A Web-based grocery delivery services called Peapod of the US offers subscribers home food shopping services and tracks purchases and consumption over time. As a result Peapod can alert users when certain supplies are running low, Peppers says.