(exaggerating upward or downward one
or more elements). Reordering (
changing the order or sequence of one or more
product or service elements).
Lateral marketing can be used to
diversify marketing mix by applying
existing pricing, distribution, or communications formulas that correspond
to other existing products or services and
that are not naturally associated with the
category you compete in. Example: coffee
vending machines have applied the credit
card concept to selling coffee.
Principles for successful lateral marketing: Companies need to continuously
innovate, not just “tweak” an existing
product, to grow and prosper. A high
percentage of new products fail in spite
of careful market research and planning.
The reason for the innovation crisis lie in
the traditional innovation process. Most
new products offer just a specialized version of something already on the market.
Repeated application of vertical thinking results in a hyperfragmented market.
Marketers need a complementary way of
thinking about new products or services
that will lead to new categories or markets.
Lateral thinking uses a distinct framework
and processes that can be taught and become a part of company’s culture.
An innovative company is characterized by several systems: An idea market, a capital market, or a talent market.
Companies have an idea market if they
have a system for actively soliciting,
collecting, and evaluating new ideas.
Funding must be set aside to support idea
evaluation as well as to train employees
in thinking laterally.
Within the paints and coatings industry, both lateral and vertical marketing
are important. In understanding which is
most appropriate in a given circumstance,
remember that innovations that come
from vertical marketing are easier for
customers to assimilate and understand
while lateral marketing innovations need
more time for assimilation.
• requires fewer resources
• doesn’t depend on high volume
• fragments markets
• maintains business focus.
• is riskier
• requires greater resources
• anticipates high volume
• may redefine mission and business
focus. CW
Lateral marketing:
• works best for mature markets with
no growth
• creates markets from scratch
Philip Kotler is Professor of International
Marketing at the Kellogg School of
Management.
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