Victims of Success

Lateral Marketing
By Philip Kotler & Fernando Taras de Bes
206pp. Hoboken, NJ: John Wiley & Sons, Inc. $24.95.

It isn’t easy being a marketer these days. An explosion of new media outlets, not to mention the Internet, has created an almost absurdly fragmented audience. Many long for the good old days of three networks and reliable prime time viewership.

To add insult to injury, companies are desperately trying to increase market share and profits by coming up with new products. Product innovation in and of itself is not a bad thing, but the graveyard of new product launches is a testament to the difficulty of getting anything new off of shelves and into the hands of consumers. This has led to a certain timidity on the part of manufacturers.

Rather than come up with something truly new and different, companies increasingly rake the relatively safe path of creating line extensions. Instead of a new and unique food product, it’s considered more desirable to simply come out with more flavors of the same product. Witness the dizzying array of yogurts in the dairy aisle. You’ll see the fruits of this mentality.

That worked for a while, but as Lateral Marketing wisely tells us, it may have worked too well. There comes a point where all possible yogurt permutations are exhausted. In the words of the authors, “The most basic marketing strategies — segmentation and innovation — are in a crisis. Marketers are obliged to increase sales and market share in markets and categories that are saturated.”

In other words, too much of a good thing drives down the bottom line.

What, then, is a company to do? Lateral Marketing suggests instead of looking for ways to further divide an existing consumer base (i.e. vertical marketing) companies should instead try to create new consumers by modifying the product itself. “Lateral marketing works in the areas where vertical marketing does not,” the authors write. “Lateral marketing restructures a product by adding needs, uses, situations, or targets unreachable without the appropriate changes.”

So it’s not another yogurt flavor, but a whole new way of looking at yogurt that will save the day.

To choose one of the many examples in Lateral Marketing, consider the Walkman. When it was introduced by Sony in 1978, the Walkman was considered an oddity. Why would anyone want a portable tape recorder that couldn’t record? Hundreds of millions of dollars later, Sony is laughing all the way to the bank. They didn’t just improve the existing technology; they combined elements of earlier products and created a new positioning in the consumer’s mind.

Of course, lateral marketing is not a sure thing. Even more important, as Kotler and Bes remind us, lateral marketing is not intended to supplant vertical marketing. Rather, the two are meant to compliment each other. There will always be consumers who want portable tape recorders, and those who simply want to listen to music.

If there’s one complaint against this useful book, it’s the authors’ dry-as-dust writing style. That, coupled with somewhat obtuse charts and graphs, suggests the intended audience for Lateral Marketing is the marketing graduate student, rather than the lay reader. Nevertheless, the authors provide valuable insight into the marketing process and the approach could not be more timely.

Let’s look forward to the next category innovation.

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Jonathan Jackson is an independent consultant based in New York City. He has written extensively on internet advertising and email marketing since the inception of the internet. A frequent guest speaker, Jonathan has addressed global audiences on marketing and advertising topics and also teaches marketing at colleges around the world.