Disruptive marketing in the retail world

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Disruptive marketing can challenge conventional thinking in an existing market or develop a new one. Focus on the job, not the consumer segment. Identify unconventional opportunities by looking for data that doesn't make any sense and trying to understand it. With disruptive marketing, you can change culture! And take on your biggest competitor and win. This presentation was delivered at the Innovative Evenings event in Toronto on May 23, 2013. More on this: http://www.alexrascanu.com/disruptive-marketing-in-the-retail-world/

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Disruptive marketing in the retail world

  1. 1. DISRUPTIVE MARKETING IN THERETAIL WORLD.Alex RascanuMarketing Manager at Powered by Search[former Global Consumer Insights Analyst at Kraft Foods]@alexrascanu
  2. 2. AGENDA.1. WHAT IS DISRUPTIVE MARKETING ANDWHY IS IT CRITICAL2. DISRUPTIVE MARKETING ACTION PLAN3. DISRUPTIVE MARKETING IN RETAIL:EXAMPLES AND LEARNINGS4. TAKE AWAYS AND RESOURCES
  3. 3. WHAT IS DISRUPTIVEMARKETING ANDWHY IS IT CRITICAL.
  4. 4. Traditional marketing is aligned with consumerinsights to deliver exactly what the market wantsDisruptive marketing:a. challenges conventional thinking in an existingmarket, orb. develops a new market
  5. 5. CONVENTIONALMARKETING.• targets existing markets• most resources go into itDISRUPTIVEMARKETING.• creates new markets• exciting, profitable
  6. 6. CONVENTIONAL + DISRUPTIVE =INNOVATIVE MARKETING COUPORPAINFUL FAILURE
  7. 7. BRANDS AREMEANT TO GET AJOB DONE.The job, not thecustomer segment, isthe fundamental unitof analysis for amarketer who hopesto develop adisruptive campaign.
  8. 8. Example.A fast-food restaurant wantedimprove sales of its milk shakes.Conventional marketing involvedconsumer segmentation,consumer panels, and productimprovements.Watching consumers to identifywhat job they wanted done leadto disruptive marketing.40% of milk shakes were boughtin the early morning. Most often,these early-morning customerswere alone; they did not buyanything else; and they consumedtheir shakes in their cars.
  9. 9. The job:- facing a long, boring commute and need somethingto make the drive more interesting- not hungry but would be by 10 am- want to consume something now to stave off hungeruntil noon- facing constraints: in a hurry, wearing work clothes,and had (at most) one free handCompeting products: bagels, bananas, doughnuts.
  10. 10. Improvements to get the job done:a. thicker milk shake (to last longer)b. add tiny chunks of fruit (to generate anticipation andunpredictability)c. move dispensing machine in front of the counterand sell customers a prepaid swipe card so theycould dash in, "gas up," and go without gettingstuck in the drive-through laneResult: gained share against the real competition -not just competing chains milk shakes but bananas,boredom, and bagels
  11. 11. Job-definedmarkets >Productcategory-definedmarkets
  12. 12. CONVENTIONAL + DISRUPTIVE =SUSTAINABLE MARKETING.Usually, the best strategy is to followthe traditional path of segmentingconsumers, buying TV, print and instore ads, and watch the profits rollin.By finding a new “job” for theproduct, the restaurant unlocked awhole set of new opportunities.However, it also identified a newconsumer segment (morningcommuters). Once identified,marketing to that segment becomesa fairly conventional exercise.
  13. 13. UNLOCK NEW VALUE BY CREATINGA NEW PLAYING FIELD
  14. 14. Anomaly-driven insights.How do we identifyunconventional opportunities?We look for data that doesn’tmake any sense.
  15. 15. Be a Diligent MarketResearcher.We often get data thatcontradicts our normal view ofthe world. With little effort wecan explain it away. Whattakes much more effort is tochase down the anomalyand try to understand it.Disruptive opportunities areusually hidden in plain sight,but ignored. Unlocking themoften has more to do withdiligence than brilliance.
  16. 16. DISRUPTIVEMARKETINGACTION PLAN.
  17. 17. Serious about causing market disruption?Be ready for:• Fundamentally shifting your business model• Shifting or completely changing your infrastructure• Long-term commitment
  18. 18. STEP 1Obtain internalbuy-in from topto bottom inanticipation of thechange in brandperception.
  19. 19. STEP 2Collect all relevantdata about thetarget or emergingmarket. Unearth itsparameters, profile it,and determine itsmood beforespeaking with it.
  20. 20. STEP 3Develop amarketing strategythat leverages bothonline and offlinechannels.
  21. 21. STEP 4Before launchingthe campaign,executives mustset consistentbrand guidelinesand marketingmessages.
  22. 22. STEP 5Launch thedisruptive marketingcampaign.As it unfolds, collectand interpret datarevealing theeffectiveness of thestrategy and adjustthe campaign asneeded.
  23. 23. DISRUPTIVE MARKETINGIN RETAIL: EXAMPLES &LEARNINGS.3
  24. 24. Product: Red Bull energy drinkBackground: Austria-based, foundedin 1984, 9,000 employees and $6.7billion in revenueInsight: consumers seek to associatethemselves with a high adrenalinelifestyleMarketing activity: sponsor close to500 extreme sports athletesworldwide, host/sponsor athleticevents, and sponsor skydiver FelixBaumgartner in breaking world recordfor the highest altitude jump (128 km) -watched live on YouTube by over 8million peopleLessons:- Use consumer insights- Push boundaries
  25. 25. Product: razor subscription plansranging from $1 to $9 a monthBackground: USA-based with 25employees, raised $10.9 millionInsight: there is a current trendagainst "industrial strength carpetbombing" campaigns that blastevery media channel with adsMarketing activity: 90-secondYouTube ad featuring the foundercost only $4,500 to makegenerated a great deal of mediacoverage and over 10,000,000YouTube viewsLesson:- Differentiate- Have a razor-sharp focuson your target market
  26. 26. Product: Samsung Galaxy SIIIAgency: 72andSunny wasfounded in 2004, is USA-based,and has 250 employeesApproach: go straight after the800-pound gorilla in thesmartphone market – Apple; TVads poking fun at die-hard iPhonefans by showing them as jealousof Galaxy’s superior featuresResult: Samsung surpassedApple in global smartphone saleswith more than 215 million unitssold last year.Lesson:- Taking on your biggestcompetitor can pay greatdividends if you can deliverquality innovation
  27. 27. Products: cocoa, coffee, cotton,flowers, fruit, gold, grains, spices andherbs, nuts and oils, sports balls,sugar, tea and wineBackground: secures better deals for1.2 million farmers and workers, $6.5billion spent on Fair Trade products in2011 in 120 countries, $87 millionwere the organizations revenuesMarketing activities include ads onproduct packages, community events,partnerships with schools, churchesMarketing results: most widelyrecognized ethical label globally, 6 in10 people have seen the mark, out ofthem 9 in 10 trust itLessons:- You can change culture!- Appeal to emotions- Quality matters a lot
  28. 28. KEY TAKEAWAYSAND RESOURCES.4
  29. 29. KEY TAKEAWAYS- Disruptive marketing can challenge conventionalthinking in an existing market or develop a new market.- The job, not the customer segment, is the fundamentalunit of analysis for a marketer who hopes to develop adisruptive campaign- Identify unconventional opportunities by looking for datathat doesn’t make any sense and trying to understand it.- You can change culture! And take on your biggestcompetitor and win.
  30. 30. RESOURCES1.“BLUE OCEAN STRATEGY” BYW. CHAN KIM AND RENÉE MAUBORGNE2. “THE INNOVATOR’S DILLEMA” BY CLAYCHRISTENSEN3. “PURPLE COW” BY SETH GODIN4. “ZAG” BY MARTY NEUMEIER
  31. 31. THANK YOU!Alex Rascanualex@alexrascanu.comwww.alexrascanu.com@alexrascanu

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