What Is Micromarketing?

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. It can be a more expensive technique than other approaches to marketing due to customization and lack of an economy of scale.

Understanding Micromarketing

Marketing is crucial for businesses operating in a competitive environment. As a strategy, marketing is used by companies to increase their sales, customer base, brand awareness, and ultimately, profits.

The long-term strength of any business depends upon how successful its marketing campaign is. Whether a company offers one or 101 products, it must identify its target market in order to run an effective marketing campaign. In the past, companies ran mass marketing campaigns through TV or radio ads in the hopes of catching the attention of consumers in target markets. Today, businesses are able to offer more personalized marketing schemes to each individual in their target pool, as opposed to hitting a mass audience at once.

Micromarketing became more common in the 1990s, as the personal computer boom meant easier segmentation and dissemination of information to customers. With technology constantly advancing, the delivery of highly-customized products to individual segments of a population has become easier to deliver. Micromarketing strategy is useful for firms of any size. Large firms can create specific segments within their customer base, while small businesses with smaller advertising budgets prefer to match consumers with targeted products and promotions by personalizing their marketing process. 

How Micromarketing Works

There are different approaches to micromarketing. For example, a business may decide to run a micromarketing program by offering promotions specifically to its loyal customer base; matching special offers to unhappy or lost consumers; tailoring products to consumers with unique needs; marketing goods and services to residents in a particular town or region; or offering products to targeted consumers with specific job titles or career designations. The challenge with micromarketing is its high cost of implementation and lack of an economy of scale. Companies using this marketing strategy typically spend more per target consumer, and customizing many advertisements to appeal to many small groups of consumers is more expensive than creating a few marketing ads targeted at a mass audience. Also, micromarketing can be expensive to run due to the inability to scale up in size.

Micromarketing is different from macromarketing, a strategy that looks to target the biggest possible consumer base of a company product or service. With macromarketing, a business attempts to measure how wide a scale its target market for a good or service is, and proceeds to work on how its products can be made available to this group of consumers.

Example of Micromarketing

Examples of companies that have run successful micromarketing campaigns include Procter & Gamble (PG) and Uber.

When P&G was introducing its Pantene Relaxed & Natural shampoo and conditioner product line, it created and ran a unique marketing campaign to target African American women. When Uber was trying to expand its geographic reach, it used big data from social media platforms to learn more about the specific transportation problems in each city it was looking to move into. The resulting effect was the growth of the company’s client base through tailored promotions and referral benefits.

Special Considerations

The expansion in emergent innovation, including big data, is used by micromarketers to capture data from mobile devices and e-commerce platforms. The captured data is sorted according to various distinctions, including demographics, geographies (IP address), favored sites, brand preferences, or spending habits, to track the type of products that a consumer is viewing or purchases. This process allows a website to match related products to digital consumers.

By running a tailored marketing program to a well-defined segment of consumers, micromarketing looks to entice the target audience to take an action, such as making a purchase of goods or services. The ultimate goal of micromarketing is to match products to a consumer’s tracked preferences in order to generate profit for a company from customer satisfaction.