According to Harvard Business Review, disruptive products or services are: cheaper for the customer, easier to use or access, and backed by a business model that is more efficient than existing solutions. When all three factors are combined, they disrupt the existing business structure. Disruption occurs because it is very difficult for existing businesses to deal with the disrupter, who disrupter makes the competitive advantages of the existing businesses obsolete.
Businesses that do not want to find themselves disrupted and out of business, must change. According to experts, businesses should change their focus from marginal profit increases to a more experimental and forward-looking view. Instead of trying to get maximum value from the existing infrastructure, you should evaluate and adopt new technologies in an attempt to build the next generation business before a disruptor does.
Case studies of disruptive marketing
Uber market disruption
Did Uber disrupt the taxi market? In my opinion, they definitely did. While there is no consensus in academic circles on whether Uber is a disruptive innovation, it is a done deal from where I stand. Uber took on local markets and built a global brand. Whether cars are driven on the same side of the road in both cities or not, you can use Uber in Cape town just as easily as you would in New York. To achieve that, Uber harnessed the power of data-driven retail experience and big data. The business model gives Uber reduced costs at service provision and car ownership levels. Uber then passes some of the saving on customers in form of reduced fares.
Nokia and Blackberry versus Android
How did Google disrupt two established players and end up dominating the smartphone market? The disruption was that Google created a new approach to the application development. By letting third-party developers easily create applications on top of its Android platform, users got a variety of cheaper, more comprehensive, and easier to customize solutions than what Nokia and Blackberry could offer. Eventually, Symbian and Blackberry users voted with their money and changed to Android.
How big data is disrupting marketing
Mobile applications powered by big data
Many people have at least one smart mobile device, each of which is GPS enabled. This Geo-data is a goldmine when correctly tapped by marketers. Marketing is not only about getting people to consume your product, but also to talk about it. Delivery, post-purchase support, and user information are also crucial marketing aspects. You should power your enterprise to take advantage of this at multiple levels including delivery. For instance, a consignment going to a warehouse can be rerouted to a dealer who is running low. To do this, you need to develop the capacity to analyze inventory and routing in real time.
Leverage on product usage
Internet-of-things should be included in every marketer's arsenal. Your products or users have sensors that you should be mining for data on usage trends. For instance, where and when do your customers use your app? Usage patterns tell you when users are most receptive to your message. Using data from marketing campaigns to tweak your marketing mix is just one way to get more value for your marketing buck.
Personalized promotions on the fly
According to Harvard Business Reviews, Sears Holdings is an example of big data-powered marketing. Initially, Sears required at least 8 weeks to consolidate and analyze data from all of its brands to run personalized campaigns. It took that long due to fragmentation (each brand separately stored its data) and the large volume of data involved. By the time the campaigns were ready, they were usually outdated. In desperation, Sears turned to big data techniques. The group reduced the time required to run a campaign from 8 weeks to less than a week.
In a nutshell, disruptive innovations are, well, disrupting. They blindside established players, rendering tried and tested business models and competitive advantages obsolete. This makes it possible for new entrants to rise to dominance quickly. The example of Uber shows that disruptive technologies can be used to create a market where none exists in vastly different market environments. To survive, established players need to be constantly innovative and experimental. Most disruptions are not new technology, but shifts in the application of technology. One tool that established players can use to cope is powering their marketing mix using big data.