The tailoring of a firm's marketing mix to the individual customer is the essence of one-to-one marketing. In this paper, we distinguish between two forms of one-to-one marketing: personalization and customization. Personalization occurs when the firm decides what marketing mix is suitable for the individual. It is usually based on previously collected customer data. Customization occurs when the customer proactively specifies one or more elements of his or her marketing mix. We summarize key challenges and knowledge gaps in understanding both firm and customer choices in one-to-one markets. We conclude with a summary of research opportunities.

We study competitive positioning and pricing strategies in markets where consumers seek variety. Variety seeking behavior is modeled as a decrease in the willingness to pay for the product purchased on the previous purchase occasion. Using a three-stage Hotelling-type model, we show that the presence of variety seeking consumers reduces product differentiation offered in equilibrium, thereby explaining some otherwise counterintuitive findings in empirical research. We find that firms charge higher prices in Period 1 and lower prices in Period 2. The lower price in Period 2 represents the price incentive that firms need to offer to prevent the variety seeking consumers from switching. Furthermore, we find that the observed switching in a market may not fully capture the true magnitude of the underlying variety seeking tendencies among consumers. Finally, we show that the presence of variety seeking consumers leads to lower firm profits and a higher consumer surplus. Surplus increases for variety seeking consumers as well as regular consumers. Therefore, the presence of variety seeking consumers benefits everyone in the market.variety seeking, positioning, pricing, differentiation, hotelling models

In the last two decades, organized retailing has transformed the retailing landscape in emerging economies, where unorganized retailing has traditionally been dominant. In this paper, we build a theoretical model of unorganized and organized retailing in emerging economies by carefully modeling key characteristics of the retailing environment, the retailers, the consumers, and product categories. The primary insight that we obtain is that in a competitive market comprising of only unorganized retailers, the advent of organized retailing injects efficiency into the market leading to a reduction in the number of unorganized retailers. This, in turn, makes the market less competitive. Building on this basic insight, we obtain a number of counterintuitive results. For instance, (i) the presence of organized retailing may increase the prices charged by unorganized retailers; (ii) as the consumers’ transportation cost to the unorganized retailers increases, the market share of the unorganized retailing sector may increase; (iii) as the probability of bulk consumption increases and consumers prefer to purchase more from the organized retailer, prices and profits at the organized retailer may decrease; and (iv) the presence of organized retailing can lead to both consumer and social surplus being lower because consumers face higher prices at unorganized retailers and there is wastage in the economy due to bulk purchasing at organized retailers. Our model offers an explanation for certain surprising empirical observations related to retailing in emerging markets, such as why in the last few years in the Indian market the unorganized retailers who have survived the advent of organized retailing seem to be doing better. Implications from our research can provide guidance to policy makers grappling with issues related to the balanced growth of unorganized and organized retailing in emerging markets.

Promoting through daily deal sites has become popular in the past few years. Groupon is perhaps the best known provider of these promotions (also known as online discount vouchers) to customers. Daily deals differ from traditional coupons on three important dimensions: (i) They are not offered to consumers directly by firms but are offered through an intermediary, (ii) the promotional depth offered by these localized promotions tends to be higher, and (iii) consumers prepay for the discount vouchers, and then the daily deals site reimburses the retailer a prespecified negotiated percentage of each paid voucher. In this study, we build a theoretical model to explore the profitability of undertaking a daily deals campaign by firms. Our analysis identifies the role of types of consumers in the market, relative bargaining power of the local firms, revenue sharing agreements, and market characteristics, such as degree of product substitutability and extent of competition, on the profitability attained through daily deal promotions. Surprisingly, when demand spillovers exist, an asymmetric outcome, with one firm offering an online discount voucher and the competing firm not offering an online discount voucher, is an equilibrium under some conditions.

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