Micromarketing

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.

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.

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.

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.

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.

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.

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.