Individual Marketing with Imperfect Targetability
Marketing Science
Consumer Addressability and Customized Pricing
Marketing Science
Product Customization and Price Competition on the Internet
Management Science
Customizing Promotions in Online Stores
Marketing Science
Overchoice and Assortment Type: When and Why Variety Backfires
Marketing Science
Customized Products: A Competitive Analysis
Marketing Science
Standard vs. Custom Products: Variety, Lead Time, and Price Competition
Marketing Science
Information Personalization in a Two-Dimensional Product Differentiation Model
Journal of Management Information Systems
The Perils of Behavior-Based Personalization
Marketing Science
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In this study, we examine firms' incentive to offer customized products in addition to their standard products in a competitive environment. We offer several key insights. First, we delineate market conditions in which firms will (will not) offer customized products in addition to their standard products. Surprisingly, we find that when firms offer customized products they are able to not only expand demand, but can also increase the prices of their standard products relative to when they do not. Second, we find that when a firm offers customized products it is a dominant strategy for it to also offer its standard product. This result highlights the role of standard products and the importance of retaining them when firms offer customized products. Third, we identify market conditions under which ex ante symmetric firms will adopt symmetric or asymmetric customization strategies. Fourth, we highlight how the degree of customization offered in equilibrium is affected by market parameters. We find that the degree of customization is lower when both firms offer customized products relative to the case when only one firm offers customized products. Finally, we show that customizing products under competition does not lead to a prisoner's dilemma.