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| Author: | Fay, S. Mitra, D. Wang, Q. |
| Title: | Ask or infer? Strategic implications of alternative learning approaches in customization |
| Journal: | International Journal of Research in Marketing
2009 : JUN, VOL. 26:2, p. 136-152 |
| Index terms: | customer relationship management (CRM) companies competitive strategy learning theories models |
| Freeterms: | customization personalization |
| Language: | eng |
| Abstract: | In the customization process, a critical first step is learning (henceforth as: l-g.) about a customer's preferences. In general, firms adopt two alternative l-g. approaches: 1. ask, that is, soliciting preference information (here as: prf-info) directly from the customer (S-Learning), or 2. infer, that's deducing prf-info based on past observations of the customer and those of other customers (O-Learning). This study examines how a firm's use of a specific l-g. approach impacts competition, especially its competitor's choice of l-g. approach. O-Learning is found to provide a credible signal for relaxing price competition, whereas S-Learning is not found to. Moreover, S-Learning by a firm creates a disincentive for rivals to also invest in S-Learning. Based on business customers survey there is found significant evidence supporting this study's theory. To conclude, several managerial implications of this theory are discussed incl. how a firm could optimally select its l-g. strategy to impact its competitive environment. |
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