Personalized marketing targets a specific customer by collecting data and creating products and advertisements of particular interest to that person. It is more effective than mass marketing or niche marketing, but requires data collection. The internet is an ideal platform for personalized marketing.
Personalized marketing refers to targeting a product or service to a single customer. It can only be achieved by collecting data and information about a particular customer, or small group of customers, and then creating products and/or advertisements of particular interest to that person. It is distinguished from mass marketing, which creates a product designed to appeal to the largest possible audience, and niche marketing, where a product is created designed to appeal to a group or segment of the population.
When a product is created, it has a target market. The target market refers to all the people who could be potential customers interested in purchasing that product. Some companies strive to create the largest target market possible, while others establish smaller segments of the market they wish to target their product.
Personalized marketing is the most extreme form of target marketing. Instead of creating a product designed to appeal to many people or the entire population, the target market is a specific customer. Some forms of personalized marketing will appear to a slightly larger audience than just one person, but the market segment is still very small.
To be successful in personalized marketing, the company must be able to gather information about the individual being marketed to. As such, this form of marketing is especially popular on the Internet, as the Internet is a more interactive platform for business and customer to communicate. For example, a web page may set up cookies to track the types of products a customer usually buys when they visit. It then creates specific advertisements for that individual based on their purchase history. An example of this is the recommendations that Amazon.com offers to customers who are logged into their account; Amazon tracks customers’ purchase history and then populates that customer’s homepage with similar products.
Marketing to an individual customer can be a lucrative method of generating more sales, provided the data collection and means of personalization are easy. For Amazon, for example, it’s not difficult to generate a different home page for each customer because the computer programming software has automated the task. On the other hand, it would be much more difficult and prohibitively expensive for a grocery chain to send a personalized brochure to each of its shoppers, offering each customer deals and discounts based on the customer’s purchasing history.
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