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Micromarketing to the new consumer

17-Feb-2006

Marketers today have to deal with a new kind of consumer – empowered and searching for brands and features that they can relate to.

Consumers in the current business environment perceive themselves as having a unique set of needs and interests. They demand that businesses understand their needs and provide products and services that will satisfy them; companies that can’t develop and maintain relationships with their customers will lose business to those that can.

This perception of uniqueness extends all the way from personal needs to the requirements of organizations in B2B transactions, creating a number of problems for marketers but also generating big opportunities for those businesses prepared to take up the challenge.  

World markets are now fragmented rather than segmented. Purchasing is increasingly done for pleasure rather than just need satisfaction. Having a popular brand is no guarantee of continuing success; brands have to be made relevant to their followers and then kept that way to prevent defections.

When repetition ruled the media

Think back to the days of what was called ‘mass marketing’. It was really about advertising more than marketing. Brand strength was the result of repetition rather than relevance. The message was about product features and benefits and not about the people who were being told to buy something. Audiences were segmented by geography as much as they were by any other factor. A television station or newspaper delivered the advertiser’s message across its entire coverage area and the more households that received it, the better the medium was seen to be working. For decades marketing used this shotgun approach that required ever-increasing buckets of money to support it. Smaller businesses couldn’t afford the costs and the all-powerful medium of television became the exclusive province of large advertisers.

This all changed in the 1990s when the ‘mass media’ became fragmented with new entries in virtually every category. Mass marketing had become as expensive as it was impractical, given the availability of better-targeted media options.

The rapid uptake of the Internet also facilitated its use as a source of information about products and services and it has since become a marketing channel with at least as much clout as television ever possessed.

Proliferation of choice

A proliferation of choice in most markets has developed, giving marketers the challenge of getting their value propositions across to people who see themselves as individuals rather than as members of a category or group.

Regional brands in fields as diverse as hardware and clothing have grown in areas deserted by the national brands, and specialist media are reaping the benefits of advertisers targeting local residents.

The focus on micromarketing has given rise to new players in most markets. The beer market was once the sole property of national brands. Now it’s possible for a restaurant or bar to have its own boutique brand, produced in a microbrewery on the premises.

Mass marketing and micromarketing are of course able to coexist and probably will for all time. A family might do most of its household shopping at Wal-Mart, yet clothing will be purchased from independent smaller retailers according to the family member’s individual taste.

Case study: MEDI-CLONE 

Market research is one of the most important facilitators of micromarketing. Marketers use research to help them understand their customers and create more appealing offerings for them. As much as possible they need to predict the behavior and responses of their customers to be successful. An application of micromarketing in the field of medicine enabled a manufacturer of men’s health products to identify and target more physicians who are likely to start prescribing its brand. Micromarketing Strategy Partners of Willow Grove, PA (MSP) has developed a technique called MEDI-CLONE which is used to ‘clone’ a drug’s current prescribers, thereby creating more of them.   MSP conducted a statistical examination of the client’s current prescribers, including specialty, detailed prescribing behavior, personal market shares, age, gender, location, and other demographic variables that described the population of consumers/potential patients who live in their neighborhoods.

This enabled the creation of a very detailed profile of current prescribers and the mix of patients they service. Individual prescriber databases were then matched with geodemographic databases to identify other physicians who closely match the profile of current prescribers.

The technique also identified those physicians who did not match the profile of a prescriber so they could be de-emphasized in the company’s sales and marketing planning.

Applying the process for the manufacturer of men’s health products identified nearly 12,000 additional physicians as ‘clones’ of current prescribers and over 80,000 physicians as ‘non-prospects’.

In the two months following the analysis clones converted to becoming prescribers of the client's brand at a rate that was eight times higher than that of the non-prospects.

Profit from knowing your customers 

Micromarketing research makes use of an organization’s own customer data, including an an organization’s own customer data, when and how they make purchases, which customer communications generate a response, and calculations of customer value. Applications of research can even determine which geographic areas are the most receptive to a company’s offerings and be used to make decisions relating to future outlets, greatly reducing the possibility of making a poor real estate investment. New micro communication channels can be used to reach niche markets on a more meaningful level than was ever before possible. Messages can be personalized with information that can include such details as the last date a customer made a purchase, what they purchased, and whether a credit card was used for the transaction. Even the language of the communication can be changed to suit the customer’s preferences.

Micromarketing is admittedly costly and requires a redirection of marketing expenditures away from more traditional channels and into highly-targeted activities.
	However, the increased cost of reaching members of a defined audience – hitting the target with a rifle instead of a shotgun pellet, will easily be offset by a greatly increased response to strategic marketing efforts.

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