According to Philip Kotler and Fernando Trias De Bes, "Lateral marketing is a work process which, when applied to existing products or services, produces innovative new products and services that cover needs, uses, situations, or targets not currently covered and, therefore, is a process that offers a high chance of creating new categories or markets" (97).
The executive trying to implement lateral marketing focuses principally on:
- additional needs that can be satisfied by changing the existing product.
- additional customers who can be reached by incorporating changes into the existing product.
- additional values that can be offered to existing customers.
- additional functions that the product may perform if it is changed.
- features of competing products that target the same market segment.
- new products that can be derived from the current product.
- substitutes to beat a competing product.
Lateral marketing diverges from conventional marketing by focusing primarily on an existing product instead of focusing primarily on the consumer. This happens because the process of creative thinking is based on induction and not on deduction.
How Does Lateral Marketing Work?
Lateral marketing begins with dividing the vertical marketing scheme into three main levels:
- the market-definition level
- the product-definition level
- the level containing the rest of the marketing mix
The process of lateral marketing consists of generating a lateral displacement in the elements of a selected level to create a gap, which, when bridged by creative output, provides innovative solutions.
The Three Steps of Lateral Marketing:
- selecting the element upon which to focus
- generating a lateral displacement of that element to build a gap
- building the logical connection to bridge the gap
Let's work at the product-definition level and use "cotton shirts" as a focus. A logical sequence progressing from the focus would be "cotton shirts need to be pressed," which recognizes a characteristic of the product.
A lateral displacement occurs when a logical sequence is broken by the introduction of an idea apparently inconsistent with the end reasonably expected. A possible lateral displacement of the logical sequence would be "cotton shirts never need to be pressed." In this case, there is a gap generated in the logical sequence between the focus ("cotton shirts") and its feature ("need to be pressed") by the introduction of "never."
Kotler and Trias De Bes write, "Innovations are a result of connecting two ideas which in principle had no apparent or immediate connection" (101).
If "cotton shirts" is the focus, "never need to be pressed" is a displacement of a characteristic of the focus. The gap between "cotton shirts" and "never need to be pressed" provides the creative stimulus. The creative stimulus urges the marketer to make the "movement" to change the material of the shirt and bridge the gap between the focus and the lateral displacement by connecting with a new concept: "wrinkle-free." Wrinkle-free "shirts never need to be pressed."
And that is how lateral marketing works. That is how great innovations like wrinkle-free shirts come into being. That is why the best in the business learn how to master lateral marketing.
Kotler, Philip, and Fernando Trias De Bes. Lateral Marketing: New Techniques for Finding Breakthrough Ideas. Hoboken, NJ: Wiley, 2003.