Retail Micro-Marketing Strategies and Competition

Abstract

The goal of this paper is to open the debate about the effect of customer specific retail marketing on competition. Segmentation and targeting based on loyalty card information affects horizontal and vertical relationships. Few retailers can take advantage of the power connected to the ownership of customer information. Consumers benefit from a more targeted approach to value creation but the distribution of such value varies widely, as a consequence of micro-targeting. A second goal is to test a new way of conducting joint research with practitioners. An online community was set up for the discussion of micro-marketing related issues. Online, the authors have been able to test the hypothesis and deliver the survey questionnaire to participating retailers who, in turn, can access results through the community website: www.partnership4loyalty.com.

Keywords:

• Loyalty card data
• targeting
• competition
• joint research
• micro-marketing

Acknowledgement

The Programma Giovani Ricercatori 2001 provided funding to this study, which is duly acknowledged with gratitude. The authors would also like to thank Dr. Jonathan Reynolds and Dr. Richard Cuthbertson for their help with the Tesco interview, Professor John Dawson for useful comments and the members of the Partnership4loyalty community.