Personalization versus Privacy: New Exchange Relationships on the Web

Personalization is the ability to satisfy specific needs of individual customers and has traditionally been employed as a marketing strategy for luxury goods. Advances in Internet based technologies have allowed most online vendors to offer personalization services, albeit to a varying degree. While vendors who offer personalization in the physical context usually charge a premium for the services, personalization in the online environment has become more of a competitive necessity and serves as means to acquire customer information. Such information acquisition has led to exaggerated concerns of privacy for customers and thus affecting the viability of personalization strategies. In the absence of any rigorous framework to study personalization strategies that involve customer concerns of privacy, this paper conceptualizes online personalization as an extension of a complex marketing exchange that has both temporal and contextual dimensions, and builds upon existing exchange paradigms to provide an understanding of information exchange on the Web. By incorporating the customer concerns of privacy on the Web, we develop a conceptual model and construct a set of hypotheses that can serve as the foundation for future models and empirical studies on Web based personalization.

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