Micromarketing
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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.[1] 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.[2] 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.
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.[3]
"Global ad spending is predicted to reach $662.73 billion by 2018. Unfortunately, a lot of those dollars will go to waste.".[4]
Herbert Haines, the chief executive of Adidas, claimed that Adidas would increase its marketing budget from 13% to 14% of sales in 2015, raising it by up to €200m (£159m), all in hope of catching up to its biggest competitor Nike.[5]
A report form 2007 by Tech Crunch titled "Facebook Will Use Profiles To Target Ads, Predict Future" talks about how Facebook was planning to target individuals based on each particular profile.[6] Moreover, the Wall Street Journal claimed in a report, that the new system will "let marketers target users with ads based on the massive amounts of information people reveal on the site about themselves."[7]
See also
References
- ↑ 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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