Micromarketing – What Is It? How Does It Work? Pros And Cons
Micromarketing is a marketing strategy that businesses adopt to target new audiences by collecting data about the consumption habits of the target audience. Hence, while promoting their products and services, it gets easier for businesses to design and implement their marketing strategies to work for niche audiences. It is one of the most effective strategies businesses use to market their brand.
In this article, you will get a general idea of Micromarketing and how it works for business. Apart from that, we will also discuss the various levels of micromarketing that businesses go through to market their products and services. Finally, we will also look at some of the major advantages and disadvantages of micromarketing. Hence, to learn more about this marketing strategy, read on through to the end of the article.
What Is Micromarketing?
According to Investopedia,
“Micromarketing is an approach to advertising that tends to target a specific group of people in a niche market. With micromarketing, products or services are marketed directly to a targeted group of customers. To make use of micromarketing techniques, a company has to narrowly define an audience by a particular characteristic, such as gender, job title, age, or geography, and then create campaigns geared toward that specific group.”
However, on the other hand, micromarketing is also one of the most expensive marketing techniques to implement. This is because there are various issues related to the procurement of data and customization, as well as a lack of an economy of scale.
Despite its limitations, micromarketing seems to be a very cost-effective option if it is implemented correctly. This is due to the reason that there is a big return on investment, as compared to the efforts that the company puts into marketing. Apart from that, micromarketing also enables the business to build a personal relationship with the customers.
It is really easy to learn about the needs and demands of the customers with the help of micro-marketing. One of the major reasons for this is that businesses gather data related to consumption types, location, and other demographic factors. Hence, in the long run, the company gets a loyal customer base as time passes.
Read More: Market Segmentation: Definition, Types, Benefits, And More
How Does Micromarketing Work?
With the help of micromarketing, companies select a narrow population of their target audience based on the latter’s unique needs and demands. They do this to market their products and services to maximum effect so that there is a better return on investment.
According to Wall Street Mojo,
“Due to customization and a lack of economies of scale, it may be more expensive than other marketing strategies. However, for firms working in a cutthroat market, marketing is essential. Companies utilize marketing to grow their customer base, sales, brand recognition, and profits.”
However, whether the company will have long-term viability or not depends on the level of its marketing efforts. No matter how many sales the company makes, it is still essential for the company to determine its target market in detail. Otherwise, it will be difficult to launch a successful marketing effort.
With the help of social media, micromarketing reached new heights. This is because it is easier to procure data from social media analytics. Based on the interaction of the consumers, as well as their likes and dislikes, companies segregate audiences into various categories.
Micromarketing: An Example
Red Bull is a company that used micromarketing as a strategy to target their audience. They targeted the youth who loved to participate in extreme sports. Hence, they considered building a marketing strategy around that.
According to the Corporate Finance Institute,
“The energy drink manufacturer started sponsoring extreme sports events, such as cliff diving in Hawaii and skateboarding in San Francisco. It created excitement among the youth, who were attracted to the energy drink. Other extreme sporting events that Red Bull sponsors are rock climbing, windsurfing, and Formula One racing.”
What Are The Major Levels Of Micromarketing?
The following are the levels of micromarketing that companies use:
1. Customer Segments:
Here, companies choose a market and break it down into segments using different data and marketing methods.
2. Customer Niches:
The companies then find target customers who have similar preferences for products and the ones that act as a group.
3. Local Areas:
Here, companies identify local areas, and this factor helps companies specify the type of marketing to use and get an idea of the segment that uses the product.
4. Individuals:
Here, companies get data on the habits of consumers. They, therefore, collect information at the individual level to understand the marketing segment.
The Major Advantages And Disadvantages Of Micromarketing
The following are the major advantages and disadvantages of micromarketing for businesses:
Advantages Of Micromarketing
Here are some of the major advantages of micromarketing a business benefits from:
- It is really a cost-effective marketing tool
- Businesses of all types and sizes can use this marketing strategy
- A company is able to know every detail related to consumer habits and customizes its products and services accordingly
- It is easier for the target audience to provide feedback
- A better Customer loyalty
Disadvantages Of Micromarketing
Here are a few disadvantages of micromarketing that businesses must be aware of:
- Research consumes a lot of time.
- The company gets stereotyped as one product.
- Failure of implementation leads to a lot of risk.
- A smaller customer base might saturate later.
- Acquisition of new customers can happen at a higher cost than usual.
- There is a higher chance of missing the target audience.
Read More: Marketing Mix – What Are The 4 Ps Of Marketing?
Wrapping Up
The goal of micromarketing is to create a highly targeted and niche audience based on various factors like profession, age, gender, location, etc. This is done to make sure that brands can convey their message through advertisements fast. This type of marketing strategy also allows businesses to have a loyal customer base, which helps the business to grow better.
A company’s ultimate target with micromarketing is to target a group of customers and enable them to take action to buy the offerings of the company. Do you have anything to add regarding the role of micromarketing in business? Share your ideas and opinions with us in the comments section below.
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