Innovation Marketing or Lateral Marketing

I am currently reading the book “the Marketing Gurus”and in there I found a chapter about “Lateral Marketing” from Philip Kotler & Fernando Trias de Bes. The nice thing for me was that it very well covered the marketing issues I am currently working on and facing in my work.

Lateral Marketing – as described in the book – complements traditional marketing by providing an alternative route to generating fresh new ideas. Whereas vertical marketing helps us find increasingly smaller subgroups for which a product might be developed, lateral marketing lets marketeers develop an entirely new product that finds a much wider audience. Instead of accepting that your product or service will have a small share of a saturated market, you will find yourself the leader in new markets.

A very good example used in the book is about how Hero created a complete new product inbetween the cereal products and candy bars, the cereal bar. Instead of creating the next light/fiber rich/fruity cereal (of which we have enough of choices/subsegments), Hero now is leading a complete new market for people who want a healthy kind of snack or take no time for a sit down breakfast.

Lateral marketing works best for mature markets with no real growth. It creates markets from scratch. It is riskier, requires more resources and time for the consumer to assimilate and understand. It anticipates high volume and may redefine the mission and business focus.

So how does that apply to my business. I am currently working in the home audio business. And although there have been many innovations in the past, from LP, to cassette, to CD, to Docking, the growth has been limited. Unlike the portable business, where the MP3 players (with the iPod + iTunes as lead product) really changed the business and increased the size and type of solutions significantly.

My marketing challenge currently is to market a new type of audio solution where the product does not play anymore back the music from a physical carrier which you insert in it (like CD) or dock into it (like iPod), but a solution where the product directly streams wirelessly your own music collection from your PC/Network, can directly access over 10.000 radio sations from all over the world and allows for music subscription services, with which people have unlimited access to millions of songs via the internet. We call this a network player.

When I read the chapter on Lateral Marketing I really recognised the issues we are/have been struggling with and for me reading the chapter, triggered quite a few ideas and thoughts. These I will not share openly in this blog, since my competition can also read it, but if you are interested follow what Philips will be doing around their Streamium network players.

And for anyone who is working on marketing innovations, I can advice them to take a look at what Kotler and Trias de Bes are saying about vertical and lateral marketing.

Your feedback on my blog, the advice or your personal experiences with marketing innovation, will be very much appreciated.