finance, and information. It also requires a reinvention of the firm’s orientation and processes, especially as they relate to R&D, operations, marketing and finance, and changes to the organizational architecture required to support this integration. The rise of the Internet does not replace standard broadcast advertising, but allows for interactive communication with customers. Customerization is not a strategy that replaces traditional mass marketing, but offers additional competitive options in developing an overall marketing strategy. The challenge facing the firm is, therefore, how to design and manage a customerization process along with mass-produced products and services. Flexibility Firms that exhibit higher flexibility may help enhance customerization in many ways. Flexibility can meet customers’ vastly different demands, which may reduce negative impacts on demand changes and capacity fluctuation. This allows the firm the ability to use critical resources to produce exactly what customers are looking for, and the ability to target customer groups. Flexibility also means quick responses to demand changes. In the co-creation process, flexibility provides a firm with the agility to make only the products that customers want, via communication with customers. This makes flexibility a critical route to customerization. Co-creation practices are well established in business-to-business contexts and are increasingly applied in business-to-consumer markets. Challenges of customerization Customerization may raise challenges related to obtaining information from customers, enhanced customer expectations, pricing issues related to customized offerings, and the required changes to the entire marketing and business strategy of a firm. Effective customerization requires the exchange of information and knowledge between companies and customers. It requires customers to be willing to share attitudes, preferences, and purchase patterns with the company on an ongoing basis. With increasing online competition and concerns about privacy, companies need to design privacy guidelines and incentive structure carefully to facilitate the knowledge exchange between themselves and their customers. See also Customization Personalization Standardization Personalized marketing References Types of marketing