Micromarketing

Suppose you just opened a handmade knitting store and want to run an ad campaign on Facebook to reach more people. Would you A) set the range to cover as many people as possible or B) limit the range to a specific location, age group, and income status? If you choose B, congrats! You've just adopted a micromarketing strategy for your ad campaign. In this article, we'll explore the definition of micromarketing, provide examples of successful micromarketing campaigns, discuss different types of micromarketing strategies, and weigh the advantages and disadvantages of this approach. So, if you're ready to learn how micromarketing can revolutionize your marketing game, keep reading!

Micromarketing Micromarketing

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Table of contents

    Micromarketing Definition

    Micromarketing is a marketing strategy that involves targeting a specific group of customers or individual customers with personalized messages and offers based on their interests, preferences, and behaviors. The goal is to deliver the right message to the right person at the right time, in order to increase engagement, loyalty, and sales.

    Micromarketing is a targeted marketing approach that focuses on identifying and serving the needs of specific customer segments or individual customers through tailored messages, offers, and experiences. It involves collecting and analyzing customer data, such as demographics, behavior, and preferences, to create personalized marketing campaigns and improve customer engagement and retention.

    Micromarketing comes with many benefits. The most important ones include reducing marketing costs and customizing offers to meet the audience's exact needs. Both are vital to business success, even for those that are small or just starting.

    Market Segmentation: Micromarketing

    As shown in Figure 1, we can group market segmentation into four levels:

    • Mass marketing

    • Segment marketing

    • Niche marketing

    • Micromarketing

    The number of customers decreases from bottom to top while marketing strategies become more specific and personalized.

    Since micromarketing is located at the top, it serves the smallest possible customer segment in the market. The opposite of this strategy would be mass marketing which aims to serve as many people as possible.

    Micromarketing Examples

    Now that you know what micromarketing is and why it is essential, let's have a look at some examples:

    Amazon's personalized product recommendations

    When you shop on Amazon, the platform uses your purchase and browsing history to recommend other products you may be interested in—this form of micromarketing targets individual customers with personalized messaging and offers based on their past behavior.

    Nike's Run Club app

    Nike's Run Club app uses customer data, such as running activity and location, to provide its users personalized coaching, challenges, and rewards. This example of micromarketing targets a specific customer segment (runners) with tailored experiences and messaging.

    Coca-Cola's "Share a Coke" campaign

    Coca-Cola's "Share a Coke" campaign involved printing popular names on Coca-Cola bottles and cans, encouraging customers to buy personalized bottles and share them with friends and family. This form of micromarketing targets individuals with customized messaging and offers based on their name and social connections.

    Scrimba — Front-end developer course

    To say the market for web development courses is big is an understatement. As software development is the most sought-after career, the number of coding classes is also numerous. Type in the keyword "coding course" on YouTube, and you'll find millions of videos.

    To break into this crowded market, Scrimba adopted a micromarketing strategy. Instead of targeting all aspiring developers, the business narrows its audience to front-end developers.

    For those of you who might not know, there are three main types of software developers: front-end (those dealing with the front-yard of the page), back-end (those who specialize in the back, taking care of things like databases, programs, etc.) and full-stack (well, as you might have guessed, they can work in both front and back-end).

    Accordingly, Scrimba builds online courses that help students master front-end skills such as HTML, CSS, and JavaScript. They can choose to take individual courses or sign up for a 6-month Front End Development Career Path from knowing no code to becoming a coding hero.

    The courses are a huge success. Many students who finish the course have landed jobs in prestigious companies. Scrimba has now surpassed 1 million subscribers and continues to grow strong.

    Lesson learned: When the market you break in is extensive, find a specific customer need that you can offer and do it well.

    Micromarketing Strategy

    The key to a successful micromarketing strategy is to develop an effective marketing mix strategy (product, price, promotion, place). However, there are two distinct differences:

    1. Customized marketing,

    2. Market segmentation.

    Micromarketing: Customised marketing

    Micromarketing is the opposite of macro marketing. Instead of reaching as many people as possible with a generic offer, micromarketing tailors the product and marketing strategy to match the need of a specific group.

    For example, the sports giant Red Bull targets young people and sports enthusiasts who constantly need energy. To market to this group, the company sponsors events that these people will most likely go to, from car racing to rock climbing.

    Micromarketing: Market segmentation

    While the "micro" indicates small, micromarketing does not mean serving fewer people. A large corporation can adopt micromarketing by segmenting its customers into smaller groups. The segmentation can be geographic, psychological, or demographic.

    Starbucks is a global brand that has a presence in over 100 countries. But instead of serving everyone the same drink, Starbucks allows its partners to adapt their menu items to match local tastes and preferences. For example, in Japan, there is matcha (Japanese traditional green tea) added to the menu. At the same time, in a Mexican coffee shop, you can find Ponche Navideño (Christmas Punch), a beverage served at family gatherings.1

    Walking into a Starbucks store, you'll be surprised by the diversity of its customers. There are people above the age of 40 who purchase the drink to socialize with their friends. The younger demographics (18-24 years old) are more likely to grab the drink and go. Some busy people will go for the drive-thru option (ordering drinks from their car) if there is one. Different age groups like different things. Starbucks knows this and customizes its experience for each demographic.

    Micromarketing vs Niche Marketing

    In essence, micromarketing is about targeting individuals or very small segments with personalized messages and offers, while niche marketing is about targeting a group of consumers with specialized products and messaging that addresses their unique needs or characteristics.

    Micromarketing involves targeting a very specific group of consumers with personalized messages and offers, often based on their individual preferences, needs, and behaviors. It can involve using data analysis to identify and target specific customer segments, and often involves a more personalized approach to marketing.

    On the other hand, niche marketing involves targeting a specific market segment with unique needs or characteristics. This segment may not necessarily be a small or specific group of people but rather a distinct group of consumers who share certain characteristics or needs. Niche marketing involves identifying and understanding these needs or characteristics and developing products and marketing messages that specifically cater to them.


    Types of Micromarketing

    There are many types of micro-marketing. Here are the most common ones:

    Loyalty-based micromarketing

    A popular example of loyalty-based micromarketing is offering merchandise related to a popular sports team to their fans. For example, a business might sell t-shirts, hats, and other items featuring the logo and colors of a local basketball team to fans who want to show their support.

    Local-based micromarketing

    A local-based micromarketing strategy might involve targeting customers in a specific geographic area with localized messaging and promotions. For example, a second-hand clothing shop might advertise its products to residents of a particular neighborhood through flyers, social media posts, and local events.

    Relationship-based micromarketing

    A relationship-based micromarketing strategy might involve offering exclusive promotions, loyalty programs, and personalized follow-up messages to existing customers. For example, a beauty brand might offer personalized skincare routines and promotions to customers who previously purchased from their website.

    Job-title-based micromarketing

    A job-title-based micromarketing strategy might involve offering products or services tailored to professionals' specific needs and interests in a particular field. For example, a software company might offer a specialized version of their product designed specifically for marketing specialists, with features that cater to their unique needs and challenges.

    Industry-based micromarketing

    An industry-based micromarketing strategy might involve offering products or services that cater to a particular industry's unique needs and challenges. For example, a company that sells project management software might offer a specialized version of their product for non-profit organizations, with features that help manage donations and fundraising campaigns.

    Customer-based micromarketing

    A customer-based micromarketing strategy might involve offering classes, tutorials, or other resources that teach customers how to solve a specific pain point or meet a particular need. For example, a cooking school might offer classes that teach people how to prepare healthy meals for their families on a budget.

    Customer recovery micromarketing

    A customer recovery micromarketing strategy might involve offering special deals or incentives to customers who have previously purchased from your business but have since stopped. For example, an online retailer might offer a discount or free shipping to customers who haven't purchased in a while to encourage them to return.

    Price-sensitivity micromarketing

    A price-sensitivity micromarketing strategy might involve offering an affordable but high-quality alternative to a popular product. For example, a company that sells skincare products might offer a more affordable line of products for customers who are price-sensitive but still want quality ingredients and effective results.

    Micromarketing Advantages and Disadvantages

    Like any other marketing strategy, micromarketing has both advantages and disadvantages. The main benefits of micromarketing include cheap cost and more robust connections, whereas its limitations lie in customer acquisition and scale restrictions.

    Let's take a closer look.

    Table 1. Micromarketing Advantages and Disadvantages
    Micromarketing AdvantagesMicromarketing Disadvantages
    • Lower marketing costs
    • Deeper connection with customers
    • time-consuming
    • high cost of customer acquisition
    • risk of targeting wrong group

    Micromarketing Advantages

    Micromarketing is suitable for small or startup companies that do not have a large customer base or a well-established reputation. Two key benefits come with this strategy: lower costs and a deeper connection with customers.

    Lower marketing costs

    Marketing costs money. Whether you are to advertise on TV, newspaper, Youtube, Google, or social media pages, an ad display comes with a fee. The fee can be large or small depending on the channel you advertise and the level of customer interest.

    Take an example of Google paid ads (paying to get your sites to rank higher for specific keywords). How much you will pay depends on how popular the keywords are or how much traffic you get per month. For example, one keyword might cost only 15 cents per click, but a popular keyword will be priced at $1 per click. If you are not specific with your ads, you might pay a hefty fee for gaining no sales.

    Micromarketing aims to narrow your market so that you know exactly who to target and market your products to more effectively. When micromarketing is done right, it costs the business a small marketing fee with high returns on investment.

    You are a coffee shop owner and want to get more customers to your store. You decide to do a small advertising campaign on Facebook. Who should you target with your ad? If you target everyone in the country, you might go bankrupt within a week since many people who see your ads are too far away to visit your store. Now, if you limit the ad display to only people within 1 mile from you, chances are more people will show up. You are near them. You sell excellent coffee. Why not?

    Deeper connection with customers

    Customer relationships are based on trust. Trust depends on how well you deliver what you promise. Even for a large brand, this is hard if you don't divide their customers into segments and tailor their products to each customer group's needs.

    This is something you see every day when you go online. Take Netflix, for example. Did you know that the movie cover you see on Netflix changes depending on your interest? Well, it does. Upon collecting your data on watching history, location, and language, you optimize content to match your preference better.2

    Companies use technology a lot to personalize content. But in many cases, micromarketing can be done without technology at all. For example, you can look for problems your close friends and family face and develop a product to solve them. After that, you can share the product with more friends; if they find it useful, they will introduce it to others and bring you more customers.

    This is a simplified example. But you get the idea. The more specific you are with the offer, the better your chance of winning people's preferences and making sales.

    Micromarketing Disadvantages

    Some of the disadvantages of micromarketing are as follows:

    More time-consuming

    Micromarketing takes a lot more time to implement than mass marketing. Marketers need to collect customer details (demographics, location, interests, hobbies, career status), interview many people to learn about their pain points and desires, and develop a product that solves a problem that has not been worked on yet.

    High cost of customer acquisition

    Micromarketing is cheap but not free. The cost includes the money and effort the marketer has to pour into customer acquisition. Since the niche is small, including hard-to-find customers, it would need more effort to convert interested people into buying customers.

    Risk of choosing the wrong target group

    There's also the risk of choosing the wrong group. This happens mainly because incomplete market research wastes lots of company resources.

    Micromarketing - Key takeaways

    • Micromarketing is the marketing strategy to reach a highly targeted audience.
    • The main goal of micromarketing is to match the right product with the right customers while reducing marketing costs.
    • Two essential features of micromarketing are market segmentation and customization.
    • Micromarketing can be local-based, loyalty-based, relationship-based, job-title-based, industry-based, customer-based, customer recovery, or price-sensitivity.
    • When done right, micromarketing can help the company lower its marketing costs and deepen customer connections.
    • However, this strategy can consume a fair amount of time and money initially.

    References

    1. Lianna Tedesco, Starbucks Menus Look Totally Different Around The World, Here Are Some Drinks We'd Travel For, https://www.thetravel.com/what-does-starbucks-look-like-around-the-world/, 2021.
    2. Gbenga Ojo-Aromokudu, How does Netflix personalise your experience?, 2020.
    Frequently Asked Questions about Micromarketing

    What is micromarketing?

    Micromarketing is a marketing strategy that involves targeting a specific group of customers or individual customers with personalized messages and offers based on their interests, preferences, and behaviors.

    What ethical issues are associated with micromarketing?

    Micromarketing's ethical issues arise from its use of personalised content in the promotion and advertising campaigns. Most people may feel uncomfortable when the advertisers know how they think and act. 

    How and why would a retailer use micromarketing?

    Retailers can use micromarketing to segment their customers (break a large customer base into smaller sub-groups) to offer them specific deals. There are many ways to segment customers: location-based, job-title-based, industry-based, customer recovery, price sensitivity, etc. The main reason for using micromarketing in retailing is to personalise content for higher customer satisfaction. It also reduces marketing costs and efforts. 

    How does micromarketing differ from niche marketing?

    While both micromarketing and niche marketing target a small group of customers, micromarketing takes a further step by targeting a specific group within a niche market. 

    How to target the market by micro market?

    Targeting the market by micro marketing can be based on the customers' location, loyalty, job title, or the industry and network they belong in. Companies can also target customers based on price sensitivity and buyer journey.  

    Test your knowledge with multiple choice flashcards

    Strategic analysis is concerned with evaluating strategy through environmental analyses, including the internal, external, and competitive environments.

    Strategic choice includes applying and evaluating the chosen strategy.

    Market _______ want to maintain their current position in the market. They can use offensive tactics (like price cuts or excessive branding) or defensive tactics (responding/mimicking offensive tactics).

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