Nowadays, a new way of marketing is emerging innovative products are coming in the market the ratio of the failed products is increasing due to the false strategies the competition between products is increasing day by day unlike if we go back 20 years back there was no such thing there was a huge demand of the products that fulfill the basic requirements. But nowadays new innovative products are emerging.
There are a few distributors or multi-national companies who are dominating the market. There are few players and a higher number of brands that are manufactured by those distributors and it is very little chance to create space in the market for a new distributor but there are different strategies to adopt space in the market and innovation is the key.
Manufacturing processes are so efficient that replacing is becoming cheaper than repairing. This accelerates the frenetic rhythm of the launching of a new product.
The manufacturing strategy of the products has been changed now a brand is making more and more products with a slightly changing the quality of the product and the prices of the products are set that repair costs are higher than replacements more innovative products are coming day after day. For example, “Apple” is launching the iPhone models with a less period with more efficient and innovative designs.
Digital technology has provoked a revolution in many markets such as the number of varieties of a given product has increased radically. In any product category, one will find a greater number of varieties than in the past. For example, have a look in a car magazine and count how many different type of vehicles and brands or variations are available: station wagons, minivans, SUVs, or small cars; diesel or no diesel; three, four, or five doors different alternatives of engine power; and so on. In the USA, more than hundreds of models and brands of cars can be bought at this time.
Mindset of consumers
These days, it is the most difficult task to obtain space in the minds of the customers. It has the feel of a “Mission Impossible.” Consumers have become selective. They are increasingly ignoring commercial communications. Novelty may be the only way to catch attention. It takes a half-second for a user to skip the advertisement. People are used to seeing without seeing and hear without hearing.
Technology and Automation
The demand for those products is increasing exponentially which is using technology and automation. Technology and automation are playing an important role in the manufacturing and designing of products. Marketing starts by analyzing the need that products and services satisfy the customer. Logically, identifying and selecting some needs implies discard others.
Selecting a market
The market is defined as the persons or companies who have or may have the need we are intending to satisfy with the product or service that we sell. The market is the set of current and potential persons/situations where the product can satisfy one or several needs. The act of defining the market provides a very useful frame called the target group. The market definition is useful because it facilitates the development of the basic marketing strategies of segmentation and positioning. Selection of the market leads to the thinking of persons/occasions that we can reach, but it excludes the nonpotential market. The consideration and definition of a market provide a frame (an arena) where competing will take place. The act of selecting potential persons/situations leads to discarding persons/situations where the product will not be appropriate.
Category and Subcategory
When human beings think, they tend to use models. A model is a set of elements integrated and put together in a set way. A model allows a great deal of information to be stored by codifying this information into unity. The four elements Need, Persons, Situations, and Product are integrated to configure the basic information of a person.
All the products and services marketed today in any country are included in each category and subcategory and eventually in subcategories.
These types of classifications and useful for five reasons:
1. They allow a given market to be quantified through enumeration of the products and brands that form part of it.
2. They allow the competitors to be listed.
3. They allow calculation of market share for each competitor in that category.
4. They allow the market volume to be tracked and the results of the marketing actions can be evaluated.
5. They provide a stable frame for the arena where we are competing.
Role of Positioning
Positioning is linked to the act of segmenting. We should earlier than positioning consists of highlighting some characteristics of our product to differentiate it from competitors’ products. Positioning can work to target a new segment, and it allows differentiation within a given segment. Positioning consists of choosing something by which we want to be organized. Positioning, as a strategy opens further opportunities for variation. Positioning consists of choosing characteristics and highlighting them. Selecting logical characteristics of our products may blind us to innovative new concepts. The positioning strategy creates different brand personalities even within the same market.
Often it defines the brand by a single word: BMW is sportiness and driving performance, Mercedes and Benz is luxury.
Innovations Based on Modulation
Modulation-based innovations consist of variations in any basic characteristic of a given product or service, by increasing or decreasing that characteristic. We are mainly referring to functional or physical characteristics.
Modulation-based innovations vary any basic characteristic of the product or service by increasing or reducing the weight, importance, or degree of that category.
e.g., Couriers: fast delivery, higher maximum weight, extended payment terms, higher frequency of deliveries, higher guarantees in case of loss or product stolen.
Innovations based on Sizing.
Sizing-based innovations launch a new product onto the market by varying its volume without changing anything else.
Soft drinks: 10 ounces, 20 ounces, one litter, two litter, six litter, six-packs of 10-ounce bottles (60 ounces total).
Internet Connection Service: bonus of 30 minutes per day, 60 minutes per day, two hours per day, five hours per day, flat rate traffic without usage limitations.
In these cases, the product or service never changes. The only thing that changes is the intensity, the frequency, the number, or the volume of the offer.
An advantage of these policies is that they allow the possible number of consumption or usage occasions to be increased. For example, different sizes of soft drinks allow individuals to buy g for immediate consumption for family consumption or home product storage.
The way a product is packaged can modify the perceived benefit, function, or consumption occasion of the product or service. Packaging-based innovations consist of creating new products by modifying only the container, the packaging, or the environment. Many times, packaging changes can be made together with the sizing changes.
Chocolate: Nestle markets the brand Red Box chocolates in different types of boxes, although the flavor and shapes of the chocolates are always the same. One container is a small, simple paper-made box sold in impulse channels such as candy shops. The function of the product is to satisfy a whim or provide a snack.
A much bigger paper-made box is marketed in supermarkets and hypermarkets, and its function is family consumption at home.
Design-based innovations are those where the product, the container, or package, and the size sold are the same, but the design or look is modified. Design-based innovations expand the targets for a given product or service by attracting buyers who respond to new styles and different positioning. For example, Different models of cars are based on designs and styles.
Innovations based on Effort Reduction.
Whenever we buy a product or service, we exert an effort and there is cost. There is a cost in the money we pay, the time dedicated to completing the purchase process, the risks we take with our decision, and the associated costs in the post-purchase period, such as repairing g or maintain hard goods that we buy. We can innovate by helping to reduce the customers’ efforts and costs.
For example, A firm known for its expensive perfumes decided to introduce mass-market perfumes in attractive bottles at many ow prices. Through the effort reduction of lower prices, the firm converted an enormous mass of potential buyers into current buyers.
Innovations based on effort reduction do not modify the product or service but increase the size of the market. They increase value by reducing the dominator in the value equation rather than increasing the numerator:
Outside Approach to Create Innovation
Sometimes it is the better approach to make changes in the appearance of the product e.g., if we change the size and packaging of the chocolates and candy bars then their selling would be exponentially increased. To increase the growth of a product in the market we can simply redesign the appearances then the growth will automatically increase. We must bring a little and innovative change in the market and in this way product will automatically grow. We can create a lateral market by simply implementing or integrating the different products and ideas. For example, food stores in the gas station and candy with a stick (lollypop).
Any product that creates a distinct category can create a lot of competition for the company. Such as the Walkman created a huge market growth for Sony. Apple created a huge competition against Android by its IOS.
Lateral Market Vs Vertical Market
The lateral market and the vertical market go hand in hand we cannot focus only on lateral marketing or vertical marketing individually. Instead of we must combine them and these both strategies play their role for a huge competition. The vertical marketing process obliges us to first define the market. Vertical marketing uses the definition of the market to create competitive advantages. The innovation is done inside the marketing whereas Lateral marketing is based on seeking an expansion by approaching one or more needs, uses, targets, or situations that we discarded in the market definition of the product or service. But his ensures that our product needs to be altered.
Working of Lateral and Vertical Market
Vertical marketing is based on logical and sequential thinking. Lateral marketing is “a set of processes destined to the use of information in such a way that generates creative ideas through a perspicacious restructuring of concepts stored in the mind. The lateral marketing process opens a new direction whereas vertical marketing moves along a specified direction. Lateral marketing is provocative, whereas vertical marketing is analytical. Vertical marketing follows a sequence, whereas lateral marketing can jump into other products or categories without the apparent sense to capture possible ideas and provoke changes.
Lateral Marketing Process
Lateral marketing is a methodical process it follows an organized process and is applied to an existing object (a product, a service, or a business). It creates an innovation that in many cases may be a new category, subcategory, or market. The lateral market is based on creativity and creativity is based on the selection of a focus, make a displacement, and then make a connection. The market process begins with choosing a product or service. Focusing on the market level or the product level for making a displacement generates a gap between these two elements. This will easily lead to the creation of new categories. Focusing on the rest of the mix leaves the product and the market connected. Displacements will lead toward subcategories or innovative commercial formulas. The second step is to do a lateral displacement on one of the three levels. There are six techniques for doing lateral displacement: substitution, inversion, combination, exaggeration, elimination, and reordering. The final step is to launch a product.
Presence of a Gap
The way to determine whether we are doing lateral or vertical marketing is by checking if we have a gap in front of us or not. The absence of a gap implies that we are working an innovation into the same market or category. The man distinction between lateral and vertical marketing is the presence or absence of a gap when doing a lateral displacement. For example, if we try to do a lateral displacement with the attribute “fast” for cars, there is no gap to be solved. If we use the attribute “low fuel consumption” there is no gap. The absence of a gap means that we are using vertical, not lateral thinking. We are simply breaking a given market or product into parts.
Dimensions of Lateral Market
There are six techniques for doing displacements at the market level, but substitution is the most efficient and easy-to-use method. The reason is market level contains several dimensions where a product or service competes. These dimensions are need, target, and occasion. This last dimension is a combination of place, time, situation, and experience. No single product or service can exist without considering these dimensions. Therefore, operations such as “eliminating a dimension,” recording a dimension,” “combining two dimensions,” and “exaggerating a dimension” would require some effort. The method “change of dimension” consists of the market for another is discarded. The dimension consists of selecting a need we are not covering and thinking about how the product should be to meet that need. For example, Red Bull opened the category today called energy drinks____ soft drinks that stimulate one’s energy. This serves a new need besides the normal one of quenching thirst.
It also includes:
Changing the place
Link your product to an event.
Changing the activity
Connect the product with new dimensions.
Ancillary Techniques for Displacing the Market Level
Combining the dimension “place”
Recording the dimension “Time”
Exaggerating the “place”
Inverting the dimension “Place”
Inverting the dimension “Need”
Inverting the dimension “Target”
Inverting the dimension “Time”
Impact of lateral marketing in Products
“Taking the mix of other products “consists of applying existing pricing, distribution, or communication formulas that correspond to other existing products or services and which are not naturally associated with the category we compete in. The combination of “phone and internet” has led many companies to create communication and direct sales channels using the internet and telephone as the way to purchase, for example, booking theater tickets and use other apps.
An Ideal Market
An ideal market means that the company has established a system for actively soliciting, collecting, and evaluating (IDCE) systems. This executive meets with an idea committee consisting of high-level representatives from different departments. The committee meets bi-monthly and evaluates ideas that have been flowed in from company employees and evaluate ideas that have flowed in from company employees and company partners such as suppliers, distributors, and dealers. The committee arranges to fund for evaluating the more attractive ideas to reach their worth.
In a nutshell, innovative marketing is the best approach to increase the worth of a product. It simply includes changing the dimensions, by connecting them with human physiology, the environment, to make easiness, finding a possible setting, and extracting the positive things. Innovations and automation can play an important role in the market.