Micromarketing is a marketing approach to advertising that helps business organizations to target a specific group of potential customers in a niche market. By using micromarketing concepts, the business can market its product and services directly to a targeted group of potential customers. This method is usually used to advertise products or services with a limited customer base.
Marketing is an essential part of businesses that are planning to gain the maximum possible customer base for their products or services. In the modern competitive business environment, marketing is crucial for approaching the target market and surviving in the competition.
The customer base to approach through micromarketing is chosen by the marketing team based on specific characteristics such as age, gender, geographic location, nature of the employment, etc. Once the characteristics are defined, the marketing team has to create campaigns that can create attraction of a specific group of potential customers.
Implementation of micromarketing can be more time and cost-consuming than usual marketing approaches because of the need for customization and lack of economies of scale.
Micromarketing became more common and useful in the 1990s. This is caused due to the increasing use of personal computers. It made the marketers easier to segment and distribute relevant information to the customers. With the increase of technology and business developments, the delivery of highly customized products to customers has become more easier and common.
Why Businesses Use Micromarketing?
The concept of micromarketing is used by both large-scale and small-scale businesses. It can work favorably by large-scale businesses to introduce new products or services to the market. Small scale businesses can use this concept to achieve market balance through locally advertising the products or services they provide.
The main reason for the businesses to use micromarketing is to identify a very specific, niche market segment with a population that will help to sell the product or service of the business. If the business organization can identify the particular market audience that matches correctly for the product or the service, it is able to generate a higher return of investment than targeting a bigger market segment and even achieve a competitive advantage in the market.
Many business organizations use this method when they want to test new products in the market or when implementing new advertising ideas. In large business organizations such as Pepsi or Coca-Cola, there is only a small and very specified group of the target audience is consuming products like diet coke or toasted vanilla flavor. But, it is clear that they have implemented a micromarketing strategy to determine that there is a demand and appetite for that particular product in the market.
Advantages and Disadvantages of Micromarketing
There are several advantages and disadvantages that can e identified in implementing a micromarketing strategy in a business. This makes it important for the marketing team to consider these advantages and disadvantages before carrying out this type of marketing plan.
As we discussed earlier, the main advantage of this strategy is that it helps the business to identify and focus on a niche market that can sell the maximum amount of products and services. It will help the business to obtain a higher ROI than targeting a bigger market segment.
Apart from that, micromarketing allows the business to get to know their individual customers well based on things such as age, gender, job title, or preferences. It allows the business to get a better understanding of customer needs and preferences, allowing to do necessary changes in the product as well as marketing methods.
Another identified benefit is the cost-effective marketing factor. Since the business is targeting fewer people or a small target market, the amount that has to spend for marketing is comparatively less than targeting a large marketing segment.
The main disadvantage that can be identified in a micromarketing strategy is the amount of time and effort necessary to identify the exact niche market for the product. The marketing team has to conduct many kinds of research, they have to study many market factors, patterns, and trends to identify the very specific group of customers to whom they want to promote the product.
The marketing team should have a personal level of understanding about each and every customer’s expectations from the product and they should be able to fulfill the customer expectation. This can make additional costs as well as much more time and effort consuming than marketing for a bigger market segment.