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Micromarketing was first referred to in the UK marketing press in November 1988 in respect of the application of geodemographics to consumer marketing. The subject of micromarketing was developed further in an article in February 1990, which emphasised understanding markets at the local level, and also the personalisation of messages to individual consumers in the context direct marketing. Micromarketing has come to refer to marketing strategies which are variously customised to either local markets, to different market segments, or to the individual customer.
Micromarketing is a marketing strategy in which advertising efforts are focused on a small group of highly targeted consumers. It requires a company to narrowly define a particular audience by a particular characteristic, and tailor campaigns for that particular segment; this technique, though, can be more expensive due to customization and an inability to scale up in size effectively. Micromarketing grew to prominence in the 1990s, as personal computers allowed easier segmentation and dissemination of information to customers. E-commerce websites are able to track the type of products that a consumer views or purchases, which allows the website to suggest related products. Four main levels of micromarketing are: segments, niches, local areas, and individuals.
History of micromarketing
With increased availability of electronic scanner data there has been a greater focus on research of micromarketing and pricing problems that retailers encounter. Research in 1995 by Stephen J. Hoch et al. provided empirical evidence for the micromarketing concept. In 1997, Alan Montgomery used hierarchical Bayes models to improve the estimation procedures of price elasticities, showing that micromarketing strategies can increase gross profits.
The 21st century brought increasing technology, both digital and print, that supported highly targeted communication to both small groups and individuals. This technology allowed marketers to create messaging specifically tailored to the recipient. Early efforts included a variety of attention-earning personalization, such as direct mail with the recipient's name creatively woven into a brochure's graphics. As name inclusion did not add to content value, marketers soon focused on inclusion of content that brought focused value to the recipient. An early example was a Xerox campaign the featured a brochure mailed to a single recipient and featuring the photos and features of the exact automobile model of interest to the recipient. Later evolution has included messaging aimed at the specific life-cycle stage of the recipient, for example: target ideal client; newly met acquaintance; active prospect; new client; and repeat client. Higher level micromarketing combines (aka micro-marketing) combines these elements; for example specific product information forwarded to existing clients who might reasonably step up to a different model.
- Whitehead, John. The Need to Rethink Analysis, Precision Marketing, 14 November 1988.
- Whitehead, John. Paying Attention to Detail, Marketing, 22 February 1990.
- Weitz, Barton and Robin Wensley. Handbook of Marketing, SAGE 2002.
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