Tuesday, August 7, 2007

Need for Lateral Marketing to Complement Vertical Marketing

Vertical marketing:

It works inside a market definition, applying segmentation and positioning, modulating the current product or service in order to create varieties. It goes from the global toward the concrete through a sequential and logical thinking process, a vertical thinking process.

Lateral marketing:

It restructures the existing information and goes from the concrete to the global through less selective thinking, but rather more exploratory, probabilistic, provocative, and creative thinking.

Sometime we will argue that lateral marketing is superior to vertical marketing. But it is not, both are necessary and complementary. Lateral marketing cannot be developed fully without vertical marketing.

Basis of vertical versus lateral marketing:

Lateral marketing woks in the areas where vertical marketing does not. Lateral marketing restructures a product by adding needs, uses, situations, or targets unreachable without the appropriate changes.

Lateral marketing implies that we will have to make an important transformation in our product. The output of the process is not under the same control as in vertical thinking. We may come out with an idea that redefining our market, our channels, even the mission of our company.

How lateral marketing works versus vertical marketing:

Vertical marketing is based on logical and sequential thinking. Lateral thinking could be summarized in two parts:

1.The analysis of the models (the fixed concepts we have in mind).
2.he techniques for altering these models (ways to transform them).

The list that follows reproduces the
differences between lateral and vertical thinking:
Above: Product Transformation like Person Transformation
Before: Input After: Output


1.The lateral marketing process opens up new directions whereas vertical marketing moves along a specified direction.
2.Lateral marketing is provocative, whereas vertical marketing is analytical.
3.Vertical marketing follows a sequence, whereas lateral marketing can jump into other products or categories without apparent sense in order to capture possible ideas and provoke changes.
4.Vertical marketing selects by discarding. Lateral marketing does not discard any alternative that might lead to a new concept.
5.Lateral marketing can use categories or products not related to our product whereas vertical marketing excludes concepts outside of our potential market definition.
6.Lateral marketing follows the less evident ways, whereas vertical proceeds in a sequential and evident way.
7.Lateral marketing is a probabilistic process, whereas vertical marketing is a finite process.

Effects that lateral marketing provokes in the markets versus vertical marketing:

In mature markets and in the long term, innovations generated by vertical marketing produce low incremental volume, and considerable cannibalization occurs.

The innovations that come from lateral marketing, in contrast, create new categories resulting from one or several effects:

1.A lateral product can restructure markets by creating new categories or subcategories.
2.It can reduce the volume of other products within the given market.
3.The lateral product can sometimes generate volume without hurting other volume.
4.if sales are not incremental, the lateral product will take volume from several categories. This seriously damages other categories.

Source of volume:

Innovations coming from vertical marketing obtain volume from two sources:

1.In early stages of the life cycle, volume comes from incumbent players together with a number of potential buyers who have been attracted by the innovation.
2.In later stages of the PLC, incremental volume is lower and comes from product competitors’ market share losses.

The volume of a new product arising from lateral marketing comes from two sources:

1.Volume comes from generic competitors, affecting several categories.
2.Sometimes there is no other referent. When there is not a clear substitute and the innovation has activated an underlying need, volume comes from the product itself. This is less frequent, however.

Responsibility of creating in the markets:

Lateral marketing will allow marketers to perform creative functions without relying on an accidental idea. Defining a process is necessary. Lateral marketing will help to use the right part of the brain within a marketing framework.

1 comment:

Rajat Soni said...

gud article..sumthing gud article...sunthing new i learned today...never knew about vertical and lateral marketing

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