DISRUPTIVE MARKETING IN THE

RETAIL WORLD.

Alex Rascanu

Marketing Manager at Powered by Search

[former Global Consumer Insights Analyst at Kraft Foods]

@alexrascanu

AGENDA.

1. WHAT IS DISRUPTIVE MARKETING AND

WHY IS IT CRITICAL

2. DISRUPTIVE MARKETING ACTION PLAN

3. DISRUPTIVE MARKETING IN RETAIL:

EXAMPLES AND LEARNINGS

4. TAKE AWAYS AND RESOURCES

WHAT IS DISRUPTIVE

MARKETING AND

WHY IS IT CRITICAL.

Traditional marketing is aligned with consumer

insights to deliver exactly what the market wants

Disruptive marketing:

a. challenges conventional thinking in an existing

market, or

b. develops a new market

CONVENTIONAL

MARKETING. • targets existing markets

• most resources go into it

DISRUPTIVE

MARKETING. • creates new markets

• exciting, profitable

CONVENTIONAL + DISRUPTIVE =

INNOVATIVE MARKETING COUP

OR

PAINFUL FAILURE

BRANDS ARE

MEANT TO GET A

JOB DONE.

The job, not the

customer segment, is

the fundamental unit

of analysis for a

marketer who hopes

to develop a

disruptive campaign.

Example.

A fast-food restaurant wanted

improve sales of its milk shakes.

Conventional marketing involved

consumer segmentation,

consumer panels, and product

improvements.

Watching consumers to identify

what job they wanted done lead

to disruptive marketing.

40% of milk shakes were bought

in the early morning. Most often,

these early-morning customers

were alone; they did not buy

anything else; and they consumed

their shakes in their cars.

The job:

- facing a long, boring commute and need something

to make the drive more interesting

- not hungry but would be by 10 am

- want to consume something now to stave off hunger

until noon

- facing constraints: in a hurry, wearing work clothes,

and had (at most) one free hand

Competing products: bagels, bananas, doughnuts.

Improvements to get the job done:

a. thicker milk shake (to last longer)

b. add tiny chunks of fruit (to generate anticipation and

unpredictability)

c. move dispensing machine in front of the counter

and sell customers a prepaid swipe card so they

could dash in, "gas up," and go without getting

stuck in the drive-through lane

Result: gained share against the real competition -

not just competing chains' milk shakes but bananas,

boredom, and bagels

Job-defined

markets > Product

category-

defined

markets

CONVENTIONAL + DISRUPTIVE =

SUSTAINABLE MARKETING.

Usually, the best strategy is to follow

the traditional path of segmenting

consumers, buying TV, print and in

store ads, and watch the profits roll

in.

By finding a new “job” for the

product, the restaurant unlocked a

whole set of new opportunities.

However, it also identified a new

consumer segment (morning

commuters). Once identified,

marketing to that segment becomes

a fairly conventional exercise.

UNLOCK NEW VALUE BY CREATING

A NEW PLAYING FIELD

Anomaly-driven insights.

How do we identify

unconventional opportunities?

We look for data that doesn’t

make any sense.

Be a Diligent Market

Researcher.

We often get data that

contradicts our normal view of

the world. With little effort we

can explain it away. What

takes much more effort is to

chase down the anomaly

and try to understand it.

Disruptive opportunities are

usually hidden in plain sight,

but ignored. Unlocking them

often has more to do with

diligence than brilliance.

DISRUPTIVE

MARKETING

ACTION PLAN.

Serious about causing market disruption? Be ready for:

• Fundamentally shifting your business model

• Shifting or completely changing your infrastructure

• Long-term commitment

STEP 1

Obtain internal

buy-in from top

to bottom in

anticipation of the

change in brand

perception.

STEP 2

Collect all relevant

data about the

target or emerging

market. Unearth its

parameters, profile it,

and determine its

mood before

speaking with it.

STEP 3

Develop a

marketing strategy

that leverages both

online and offline

channels.

STEP 4

Before launching

the campaign,

executives must

set consistent

brand guidelines

and marketing

messages.

STEP 5

Launch the

disruptive marketing

campaign.

As it unfolds, collect

and interpret data

revealing the

effectiveness of the

strategy and adjust

the campaign as

needed.

DISRUPTIVE MARKETING

IN RETAIL: EXAMPLES &

LEARNINGS. 3

Product: Red Bull energy drink

Background: Austria-based, founded

in 1984, 9,000 employees and $6.7

billion in revenue

Insight: consumers seek to associate

themselves with a high adrenaline

lifestyle

Marketing activity: sponsor close to

500 extreme sports athletes

worldwide, host/sponsor athletic

events, and sponsor skydiver Felix

Baumgartner in breaking world record

for the highest altitude jump (128 km) -

watched live on YouTube by over 8

million people

Lessons:

- Use consumer insights

- Push boundaries

Product: razor subscription plans

ranging from $1 to $9 a month

Background: USA-based with 25

employees, raised $10.9 million

Insight: there is a current trend

against "industrial strength carpet

bombing" campaigns that blast

every media channel with ads

Marketing activity: 90-second

YouTube ad featuring the founder

cost only $4,500 to make

generated a great deal of media

coverage and over 10,000,000

YouTube views

Lesson:

- Differentiate

- Have a razor-sharp focus

on your target market

Product: Samsung Galaxy SIII

Agency: 72andSunny was

founded in 2004, is USA-based,

and has 250 employees

Approach: go straight after the

800-pound gorilla in the

smartphone market – Apple; TV

ads poking fun at die-hard iPhone

fans by showing them as jealous

of Galaxy’s superior features

Result: Samsung surpassed

Apple in global smartphone sales

with more than 215 million units

sold last year.

Lesson:

- Taking on your biggest

competitor can pay great

dividends if you can deliver

quality innovation

Products: cocoa, coffee, cotton,

flowers, fruit, gold, grains, spices and

herbs, nuts and oils, sports balls,

sugar, tea and wine

Background: secures better deals for

1.2 million farmers and workers, $6.5

billion spent on Fair Trade products in

2011 in 120 countries, $87 million

were the organization's revenues

Marketing activities include ads on

product packages, community events,

partnerships with schools, churches

Marketing results: most widely

recognized ethical label globally, 6 in

10 people have seen the mark, out of

them 9 in 10 trust it

Lessons:

- You can change culture!

- Appeal to emotions

- Quality matters a lot

KEY TAKEAWAYS

AND RESOURCES. 4

KEY TAKEAWAYS

- Disruptive marketing can challenge conventional

thinking in an existing market or develop a new market.

- The job, not the customer segment, is the fundamental

unit of analysis for a marketer who hopes to develop a

disruptive campaign

- Identify unconventional opportunities by looking for data

that doesn’t make any sense and trying to understand it.

- You can change culture! And take on your biggest

competitor and win.

RESOURCES

1.“BLUE OCEAN STRATEGY” BY

W. CHAN KIM AND RENÉE MAUBORGNE

2. “THE INNOVATOR’S DILLEMA” BY CLAY

CHRISTENSEN

3. “PURPLE COW” BY SETH GODIN

4. “ZAG” BY MARTY NEUMEIER

THANK YOU!

Alex Rascanu

alex@alexrascanu.com

www.alexrascanu.com

@alexrascanu