Saturday, January 21, 2006

The Age of the Micromarket?

Back in ancient times (that is, before 1996), big companies and big brands ruled the market. Then came the dot-com boom. With the internet and manufacturing lot sizes of one, virtual companies were supposed to spell the end of big brands and usher in the age of the micromarket.

What we've ended up with instead is an odd dichotomy of mass and micro. On the one hand, big brands still rule in many cases: Coke and Pepsi; Bud and Miller; GM , Ford, Daimler-Chrysler and handful of other large auto makers. Even the internet -- supposedly the ultimate micromarket vehicle -- is dominated by Amazon, Yahoo and Google. And of course, no industry is more dominated by one brand than computer operating systems, where all alternative operating systems combined don't generate 10% of the revenue of Windows.

And yet, simulateously, markets are indeed becoming more micro. When I was in high school (too long ago), there were only a handful of teen subcultures: you were either a Jock, a Nerd, a Burnout, or a Quiet One. Today, the pelthora of adolescent cliques include auto shoppers, band geeks, Crombies, emo kids, goths, preps, wavers, rejects, skaters, punks, hippies and several more.

Radio station formats in my youth were pretty much limited to top 40, country, news, religious, and polka (seriously). Now, radio formats include adult album alternative, classic hits, classic rock, college, modern rock, oldies, and just plain "rock," just within the rock category alone.

In "Nobody Home," Pink Floyd's obligatory big band doleful missive about life on the road, David Gilmour complained of having "thirteen channels of sh*t on the TV to choose from." Thirteen? Today, basic cable usually comes with more than 100 channels, and satellite systems offer 500 channels or more.

Micromarkets are a hot topic in publishing, restaurants, and etailing among other industries. There are few markets more mature than the insurance industry, which began in London in the 1600s. And of course there are a handful of very, very large insurance that most people are familiar with: AIG in life insurance, Allstate in homeowners, and State Farm in auto. Yet the industry is still amazingly dynamic, and includes its own micromarkets such as insurance specifically for "black cars" (taxis and limousines) and for classic cars.

So, where are we exactly? We're at a stage where the best entreneurial opportunities exist in micromarkets. To return to the beer analogy for a moment, nobody's going to line up investors to create the next Budweiser, but they might get funding to create the next Summit. Small companies innovate, big companies consolidate. The best new ideas still come out of garages. The challenge for marketers is to choose the right subculture or micromarket, and then use today's micromedia to bring the right message to the right people.

*****

Terms: teen subcultures, Pink Floyd, micromedia, etailing, micromarket

The portal for Web marketers: WebMarketCentral.com

Contact Tom Pick: tomATwebmarketcentral.com

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Sunday, January 15, 2006

Caribbean Marketing


I just got back from Aruba, on a "free" trip that's going to end up costing me dearly -- though that is a topic for another post. Although focused on the tourist trade, Aruba has not yet become as commercialized as many other sunny tourist desinations. The lack of marketing sophistication is charming in its own way.

For example: Aruba has a spectacular national park. But the park has no visitor center or gift shop -- only a small museum at the entrance in the park, in a private residence which is up for sale. For anyone with an entreprenurial streak and a desire for the island lifestyle, there's a prime business opportunity for you. If you're curious, the asking price is $250,000 U.S., but the park rangers thought that was overpriced for the local market, so you may be able to get the property for less.

The island has lots of gift shops, but it seemed that 90% of the merchandise was the same. And the prices were the same in the hotel zone as downtown. Clearly, the Arubans haven't learned the lesson of American hotels and airlines regarding convenience pricing.

Finally, you can take a jeep tour of the island where tourists are permitted to drive the jeeps -- with no check of their license or even having to give their name. This practice would drive (pardon the pun) American lawyers and insurance underswriters nuts.

In short, the island is small but beautiful. The climate is sunny and pleasant as one would expect, though always breezy. Aruba is a romantic destination to bring your loved one, but not as promising a place as other Caribbean and Mexican vacation spots to find love, as some of my single counterparts discovered. The natives are friendly, but not excessively so.

*****

Terms: convenience pricing, Aruba marketing, Caribbean marketing

The Web marketing portal site: WebMarketCentral.com

Contact Tom Pick: tomATwebmarketcentral.com

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