Table of contents
What is Lateral Marketing?
Lateral marketing is a marketing theory proposed by Philip Kotler, referring to horizontal thinking in marketing.
Traditional marketing processes define the market, segment it, and create marketing mix strategies accordingly.
Kotler called this approach vertical marketing.
However, a significant issue with vertical marketing is that it rarely generates ideas beyond the existing market.
Lateral marketing can be utilized in such mature markets.
In contrast to vertical marketing, the term horizontal or lateral marketing is used.
Kotler highlighted that when traditional market segmentation (segmentation) is pursued, it often leads to one-to-one marketing. However, in segmented markets, the small market size often results in limited revenue potential.
Amidst widespread segmentation and classification in existing markets, Kotler advocated for the use of lateral marketing.
Lateral Marketing Creates New Markets
Lateral marketing focuses on expanding business opportunities by emphasizing “needs“, “uses”, “target audiences”, and “situations”.
To achieve this, it often requires fundamentally changing the product or service. (From Kotler’s Marketing Thought Process)
How to Perform Lateral Marketing
1: Identify the Focus for Lateral Marketing
Lateral marketing starts by identifying the target product or service.
For that product or service, focus on:
- “Market: Needs, target audience, uses, and situations”
- “The product or service itself”
- “Other marketing mix elements”
and determine where to focus.
2: Create a Gap
After identifying the focus, create a gap.
This can be achieved using the following six techniques:
- Substitute
- Reverse
- Combine
- Emphasize
- Eliminate
- Rearrange
For example, remove the “needs” of the focused product, emphasize its “uses”, or eliminate the “price” to create a gap.
3: Consider How to Fill the Gap
Here are some suggested methods to fill the gap:
- Follow the purchasing process for the newly created product after generating the gap.
- Replace the gap product with one that shares positive characteristics of similar products.
- Create situations where the gap product can be utilized.
For instance, if you remove “transportation” as a use for cars, you might imagine a car that doesn’t move.
This idea led to the development of driving simulators.
In this way, lateral marketing can be utilized as a method to create new markets, rather than simply delving vertically into existing ones.
