Kellogg on Marketing, 3rd Edition

CHAPTER 4Creating Value to Disrupt Markets

Lakshman Krishnamurthi and Rebecca Devine

Most products and services are changed incrementally: Features are added, prices decrease. However, every so often we are presented with something that changes the status quo in a significant way: for example, the ability to use phones instead of desktop computers for browsing the internet and go to a local pharmacy instead of a doctor's office for a vaccination. This is market disruption. It can be a tremendous source of growth for new entrants and established firms alike and can impact all aspects of the business environment, from competition and pricing to regulation.

In this chapter, we explore issues such as: What are market disruptions? How do we best prepare to introduce a new product or rethink an existing product? How can we create the type of value that allows for market disruptions? What are the types of market disruptions? The frameworks introduced in this chapter will allow us to observe changes in the competitive landscape and determine whether new or updated products are merely novel or have the potential to change the way we do business in a more significant way.

What Are Market Disruptions?

All new products and product innovations at some level address customer pain points, but very few disrupt markets. In our definition, a market disruption should change the status quo by doing one or more of the following in a significant way: (1) influence customer behavior, (2) impact ...