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Disruptive Marketing is Innovative and Boon to the Consumers - a Conceptual Thought

Article by
Dr. Maruthi Ram. R.
Professor and Head – MBA (BU), DSCMIT, Bengaluru

Co-Authors
Manjunatha.N.
Research Scholar, University of Mysore,
And Lecturer, NCET, Bengaluru

and
Shashikala.R.
Asst. Professor, DSCMIT, Bengaluru

Submitted to
DEPARTMENT OF MANAGEMENT PROGRAM
CMR INSTITUTE OF MANAGEMENT STUDIES
BENGALURU
For
NATIONAL LEVEL CONFERENCE on “Disruptive Marketing — The Way Forward?”

27th April, 2012
Disruptive Marketing is Innovative and Boon to the Consumers - A Conceptual Thought

Introduction
Human beings are a very special creation of God. It is this creature that could think compared to the many other creatures in the world. Man can even think of innovative ideas and also implement the same for his convenient living. The good old saying quotes “Necessity is the mother of invention”, has embedded a detailed meaning in it. If we take the example of the invention of the “WEEL” by the ancient man of the Stone Age man we can really understand how innovative in the thinking of Man. The other invention of human beings is the formation of fire. These are a few examples and the list goes on and on.

Disruptive Marketing
The contemporary world is of the highest civilization this universe has ever witnessed. The innovative mind of human beings has unfolded itself into multifold activity and taken different shapes. In fact the changes that have taken place due to the revolution in the IT sector has given enough scope for thinking in this direction. Now we consider understanding “Disruptive Marketing”. Anything which changes the conventional form of doing things in a particular sector or in other words disrupts the way of doing things is called “Disruptive Marketing”.

Disruptive Marketing sets up a new paradigm that often modifies the rules of the game. In many cases, Disruptive Marketing can become the new standard of doing business. It can be applied with telling effect in areas such as: Market Positioning, Service Segmentation, Target Markets, and Pricing Structure among others. It is an approach that requires solid investigative work, pilot testing, a dose of imagination/innovation and a strong constitution to do things differently and distinctively.

Clayton M. Christensen a Professor of Business Administration at the Harvard Business School, is best known for his study of innovation in commercial enterprises. His first book, The Innovator's Dilemma, articulated his theory of disruptive innovation. Following are some of his observations.

An innovation that is disruptive allows a whole new population of consumers access to a product or service that was historically only accessible to consumers with a lot of money or a lot of skill. Characteristics of disruptive businesses, at least in their initial stages, can include: lower gross margins, smaller target markets, and simpler products and services that may not appear as attractive as existing solutions when compared against traditional performance metrics.

Because companies tend to innovate faster than their customers’ lives change, most organizations eventually end up producing products or services that are too good, too expensive, and too inconvenient for many customers. By only pursuing “sustaining innovations” that perpetuate what has historically helped them succeed, companies unwittingly open the door to “disruptive innovations”.

In fact the disruptive marketing is the result of innovation. This helps the consumers to enjoy the benefits of innovation and this will be a boon in the real sense. Efforts are made to understand the disruptive marketing with few examples so that we will be in position to understand the concept very well.

Revolution in the Telephone sector

In the 1870s, two inventors Elisha Gray and Alexander Graham Bell both independently designed devices that could transmit speech electrically (the telephone). Alexander Graham Bell patented his telephone first. Alexander Graham Bell's notebook entry of 10 March 1876 describes his successful experiment with the telephone. Speaking through the instrument to his assistant, Thomas A. Watson, in the next room, Bell utters these famous first words, "Mr. Watson -- come here -- I want to see you." That was how the telephone came to use. These phones were used for many years. These were called as the rotary dial phones.

First Generation Cell Phones
In 1983, Motorola unveiled the first truly portable cellular phone to the world. It was called the Motorola DynaTAC 8000X. The FCC approved it in the United States. Motorola developed the technology for cellular phones for decades and this particular phone took 15 years to come on the market at the cost of over 100 million dollars. The DynaTAC800X was extremely lightweight for its time and only weighed about 28 ounces. It was 13 inches x 1.75 inches x 3.5 inches and was known as the Brick for its shape. It was largely developed with the help of Dr. Martin Cooper of Motorola.

From 1983 to the end of the 1980s, cell phones grew in popularity due to the innovations in cellular networks that were able to handle phone calls in either one area or hand them off to other areas. While most cell phones were not made to be carried in the hand, all phones were made for permanent installation in the car. For a while the term “car phone” was extremely popular. Besides car phones, there were a few models that came in tote bag configurations that easily hooked up to a car’s battery via the DC outlet. There were also a few models that came as briefcases, to hold large batteries necessary to make phone calls.

Second Generation Cellular Phones
Cellular phones from the early 1990s are considered second generation (2G) and they were able to work on mobile phone systems such as GSM, IS-136 (TDMA), and IS-95 (CDMA). Digital mobile phone networks were in use in the United States in 1990 and in Europe by 1991. 2G mobile phones use digital circuit switched transmissions. This ultimately enabled quicker network signaling, lowering the amount of dropped calls and increasing call quality. As 2G digital networks were online most of the time, they replaced analog network frequencies, effectively making them obsolete.

Phones based on 2G technology were much smaller than the brick telephones of the mid to late 80s. Most 2G cellular phones were usually in the range of 100 to 200 grams, plus they were hand held devices that were truly portable and did not need a large battery. Advances in battery and computer chip technology also helped to make 2G cell phones much smaller than their predecessors. With these innovations, cell phone use soared.

Third Generation Cellular Phones
Third Generation cellular phones is the technology that is currently available and it is commonly referred to as 3G. While 3G came only a few years after 2G, mainly due to many innovations in technology and services, standards for 3G are usually different depending on the network.

It is usually stated that 3G is not necessarily a rigid standard, but is a set of requirements that most networks and cell phone providers follow. There are two main requirements: they include 2 Megabits of maximum data rate indoors and 384 kbits for outdoor use. 3G mobile phones usually include innovations to receive much more than phone calls. For instance, SMS text is available and some 3G phones also offer email and Internet access. Technologies are continuing to improve and new innovations such as streaming radio, TV, as well as Wi-Fi are currently breaking into the market.

Disruptive marketing of Telephone / cellular phones

Cell phone is a revolution and it is a paradigm shift in the industry. Two decades back no one thought that the cell phone or mobile would rule the communication industry. Today there are more mobile connections than the land line phones. The marketing shift from the routine and conventional rotary dial phones to the mobile phone is the best example for the disruptive marketing.

Fountain ink pens to the ball point and gel ink pens A fountain pen is a nib pen that, unlike its predecessor the dip pen, contains an internal reservoir of water-based liquid ink. The pen draws ink from the reservoir through a feed to the nib and deposits it on paper via a combination of gravity and capillary action.

Filling the reservoir with ink may be done manually, or via an internal "filler" mechanism which creates suction to transfer ink directly through the nib into the reservoir. Some pens employ removable reservoirs in the form of pre-filled ink cartridges. A fountain pen needs little or no pressure to write. The change occurred when the ball point pens were invented.

A ballpoint pen is a writing instrument with an internal ink reservoir and a sphere for a point. The internal chamber is filled with a viscous ink that is dispensed at its tip during use by the rolling action of a small sphere. The sphere, usually from 0.5 mm to 1.2 mm in diameter, may be made of brass, steel, tungsten carbide, or any durable, hard (nondeformable) material.

Ballpoint pens, due to their low cost and ubiquity, are the most widely used pen to date. Their convenience in writing both on paper and on fabrics without causing the unwanted bleed-through of ink (more present on lower grade of papers) or smears on paper make them appropriate when both presentation and legibility is important, such as on medical papers and carbon based papers. Because ballpoint pens are low cost alternatives to both fountain pens and roller-ball pens, they have become largely a disposable product.

Ballpoint pens are often provided free by businesses as a form of advertising — printed with a company's name; a ballpoint pen is a relatively low cost advertisement that is highly effective (customers will use, and therefore see, a pen daily). Businesses and charities may also include ballpoint pens in direct mail campaigns in order to increase a customer's interest in the mailing.
Some people also create art on themselves with the pens;[14] this is sometimes known as a ballpoint tattoo. Because of this and of the widespread use of ballpoints by schoolchildren, all ballpoint ink formulas are non-toxic,[15] and the manufacturing and content of the ink is regulated in most countries.

Disruptive marketing of pens
From the traditional fountain ink pens to the latest and most convenient ball point pens it is a long journey in stationary market industry. The change over from the traditional one to the modern is the true disruptive marketing. Today hardly some people use the fountain ink pens and the world has changed over to the convenient and economy ball point pens.

Floppy disk drive to the CD and pen drives

This is the latest revolution in the sensational IT field. A floppy disk is a disk storage medium composed of a disk of thin and flexible magnetic storage medium, sealed in a rectangular plastic carrier lined with fabric that removes dust particles. They are read and written by a floppy disk drive (FDD). Floppy disks, initially as 8-inch (200 mm) media and later in 5.25-inch (133 mm) and 3.5-inch (89 mm) sizes, were an ubiquitous form of data storage and exchange from the mid-1970s well into the first decade of the 21st century. By 2010, computer motherboards were rarely manufactured with floppy drive support; 3 1⁄2" floppies could be used as an external USB drive, but 5 1⁄4", 8", and non-standard drives could only be handled by old equipment. Not many years ago we used to use the floppy disk drive to store the data. The floppy disk in no longer is existence and instead it is the CD and pen drives that have flooded to the market at a very economy price tag.

The Compact Disc (also known as a CD) is an optical disc used to store digital data. It was originally developed to store and playback sound recordings exclusively, but the format was later adapted for storage of data (CD-ROM), write-once audio and data storage (CD-R), rewritable media (CD-RW), Video Compact Discs (VCD), Super Video Compact Discs (SVCD), Photo CD, Picture CD, CD-i, and Enhanced CD. Audio CDs and audio CD players have been commercially available since October 1982.

Standard CDs have a diameter of 120 millimeters (4.7 in) and can hold up to 80 minutes of uncompressed audio or 700 MB (700 × 220 bytes) of data. The Mini CD has various diameters ranging from 60 to 80 millimeters (2.4 to 3.1 in); they are sometimes used for CD singles, storing up to 24 minutes of audio or delivering device drivers.

CD-ROMs and CD-Rs remain widely used technologies in the computer industry. The CD and its extensions are successful: in 2004, worldwide sales of CD audio, CD-ROM, and CD-R reached about 30 billion discs. By 2007, 200 billion CDs had been sold worldwide. Compact Discs are increasingly being replaced or supplemented by other forms of digital distribution and storage, such as downloading and flash drives, with audio CD sales dropping nearly 50% from their peak in 2000.

Disruptive marketing of CD and Pen drives
Not many years ago we used to use the floppy disk to store the data in a computer. The floppy disk is no longer in existence and instead it is the CD and pen drives that have flooded in the market at a very economy price tag. The change in the computer industry is a paradigm shift from the Floppy disc to the CDs. Conclusion
In this conceptual article few examples have been discussed with reference to the disruptive marketing. The first one that was discussed here is the case of the rotary dial phones and the cell phones. The disruptive marketing has brought comforts to the customers. The advantages of the cell phones are enormous. The cell phones or the mobile phones are going to be referred to as the peak of innovation in the recent past due to its application. The cell phones are no more only phones; rather it will be called as a mini computer. The disruptive marketing in the case of cell phones is innovative and boon to consumers. In the case of the fountain ink pens vis-à-vis the ball point pens, the conveniences and comforts are very much a boon to the consumers. Though fountain ink pens have their own advantage the ball point pens have a distinct benefit. More so in the age of use and through technology this disruptive marketing is a real boon to the consumers. In the case of the CD drives and the pen drives compared to the floppy disks it needs fewer words to explain the advantages and benefits. The storage space, sturdiness, ease to handle etc are some of the very common points we can think of when we closely observe the advantages and benefits.

References 1. Aaker, David A., Kumar, V. and Day, George (2000). Marketing Research, 7th ed., New York: Wiley. 2. Chandy, Rajesh K. and Tellis, Gerard J. (1998). Organizing for Radical Product Innovation: The Overlooked Role of Willingness to Cannibalize. Journal of Marketing Research 35 (4): 474–87. 3. Disruptive Change. Harvard Business Review 78 (2): 66–76. 4. Finkelstein, Sydney and Sanford, Shade H. (2000). Learning from Corporate Mistakes: The Rise and Fall of Iridium. Organizational Dynamics 29 (2): 138–48. 5. Foster, Richard N. (1986). Innovation: The Attacker's Advantage. New York: Summit Books. 6. Gulati, Rajay and Garino, Jason (2000). Get the Right Mix of Bricks and Clicks. Harvard Business Review 78 (3): 107–114. 7. Helfat, Constance E. and Lieberman, Marvin B. (2002). The Birth of Capabilities: Market Entry and the Importance of Prehistory. Industrial and Corporate Change 11 (4): 725–60. 8. Iansiti, Marco, McFarlan, Warren and Westerman, George (2002) . The Incumbent's Advantage. Working Paper. Harvard Business School. 9. Leonard, Dorothy and Rayport, Jeffrey F. (1997). Spark Innovation through Empathic Design. Harvard Business Review 75 (6): 102–13. 10. MacMillan, Ian C. and McGrath, Rita Gunther (2000). Technology Strategy in Lumpy Market Landscapes. In: Wharton on Managing Emerging Technologies. G.S.Day, P.J.H.Schoemaker, and R.E.Gunther (eds.). New York: Wiley, 150–171. 11. McDermott, Christopher M. and Colarelli-O'Connor, Gina (2002). Managing Radical Innovation: An Overview of Emergent Strategy Issues. Journal of Product Innovation Management 19 (6): 424–438. 12. McKendrick, David G., Doner, Richard F. and Haggard, Stephan (2000). From Silicon Valley to Singapore. Location and Competitive Advantage in the Hard-Disk-Drive Industry. Stanford, CA: Stanford University Press.
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