Written by ZOOZ
consulting and training | (972)-9-9585085 | firstname.lastname@example.org
| Issue 21 |
We are pleased to
send you the 21st issue of LaZOOZ.
This monthly newsletter is sent as a free
service to thousands of senior executives.
different sections each time, and does not
We have tried to keep it brief, knowing that your time is precious and your work is plentiful. Those who wish to learn more can find links to articles and sources of relevant information. We hope that you will find the newsletter useful. We would be glad to receive any
comments and suggestions.
Ari Manor, CEO, ZOOZ
On strategic development in practice
More for More
Value Strategy means focusing on offering a specific
advantage to all the customers that might want it. For
example - the softest butter, the most
natural jam, or… the best weight-loss bread. This is the most common way to set yourself apart from the competition and positively ingrain yourself in the customer's memory, as described in this section in the past. Even though many try to set themselves apart this way, only a few actually succeed in doing it. Therefore, here are a few points and recommendations on how to obtain true added value, even for… a marketer:
- What is the true
meaning of "added value"? It's very simple - something
that has added value is something that people are
prepared to pay more for. If, for example,
customers are willing to pay more for softer
socks, then "softness" has an added value in the sock
market. And in the same context, added value means
more for more
. Therefore, if you don't have the courage to cost
your product at a relatively high price - added value
strategy might simply not be for you.
- How do you measure added value? It can be measured in a fairly simple
manner - by asking customers how much more
they would be willing
to pay for a specific advantage. For example, you can
conduct a survey and ask by what percentage the
customer is willing to pay more for especially soft
socks (0%, 10%, 20%, 30%), and to compare this to
similar surveys where they are asked about socks that
absorb sweat, designer socks, and odor-proof socks.
The advantage that turns out to be the highest added
value (the average) will also be the most profitable,
assuming that all entail similar costs.
- Should a prime advantage be
chosen that is important to the majority
of customers? Not necessarily. If it's possible
to create such an advantage and maintain it over time
- great, but in many cases, prime advantages in a
competitive market are already taken by a sole
competitor (Dannon yogurt = health) or a group
of competitors (Japanese car = quality).
Moreover, allegedly important advantages may
burn out, emphasized by all the competitors (a fast
printer), and therefore no longer perceived as unique.
- Is setting yourself apart using a marginal
advantage sufficient? In certain cases
- definitely. For example, if an Israeli company
is satisfied with 5% of the global market, a
relatively marginal yet available advantage, that
particular advantage may secure that segment of the market.
And if it is an advantage that may take off over the
years - even better. For example, when Swedish
Volvo penetrated the American market in the 1950's,
safety wasn't a very important issue. There weren't a lot
of cars on the road, they weren't very fast,
and accidents happened only occasionally. Volvo
was content with an added value that enchanted only 5%
of Americans during that period. Fortunately for Volvo
- the importance of safety only intensified over
the years. Volvo obviously reaped the benefits later
- What if it's a really marginal
advantage? In very advanced and competitive
markets, where all the prime values are desired, this
can also help. What's the difference between the
various banks? Not much. In cases like these, the bank
with the best-designed branches
can perhaps attract a
certain amount of customers that are design lovers.
These types of marginal advantages can nevertheless
influence a customer's choice (in the absence of
something else that sets it apart), and the
competitors probably won't rush to copy them.
- So is a marginal advantage preferable
then? Definitely not. The idea is
to identify the greatest possible
added value that can be offered.
In other words, one that hasn't been taken yet, hasn't
burned out, and suits the marketer's capabilities. If
it can be protected and earn reasonably well -
excellent. If not, perhaps it would be better to find
a different market, or adopt a different strategy (for
example - a niche strategy, or a low price strategy).
It's also worthwhile to mention that marginal
advantages will work better in markets that don't have
elements that set competitors apart, where there is no
customer loyalty, and the cost of a customer's
migration is low. For example - moving to a new bank
involves a great deal of effort, and therefore very
few customers, if any, would change banks just because
the competitor's branch is better designed.
- And suppose that we succeeded in
identifying a suitable advantage, how do we maintain
it? That already depends on market positioning. If
you were the first to claim this advantage (for
example - soft socks), and you worked systematically to
establish your claim, you may succeed in
acquiring a "brain segment" for a prolonged period of
time. For example - Volvo hasn't been a safer car
than its competitors for long, but it is still perceived
as such. As mentioned above, a detailed explanation on
market positioning was described in this section in the
- Until when should we continue maintaining
the added value that we will offer? As long as it's relevant to customers,
sets you apart from competitors, and you can charge
more money for it. The most common mistake in Added
Value Strategy is not to persist with it
because you want "to offer your customers new things".
Consistent repetition over the years of the same
marketing message (the softest butter, the
best weight-loss bread) conflicts with the new
marketer or CEO's natural intuition ("We pay the
advertising agency a lot of money - let them think of
something new…"). But for the customers, consistently
repeating the same message only reinforces
you apart, and strengthens your advantage. Market
re-positioning (meaning - migration to a different
value) is only necessary when the added value that
represents you stops being relevant to your customers.
If you have chosen a relatively important value, it
shouldn't happen for years to come….
- For workshops on Strategy and Marketing: click here (PDF booklet, in Hebrew)
- For articles on strategy and other topics: click here
- Information on strategic consulting: click here
Innovation ideas not yet realized
Ideas for innovation in coffee
following ideas were developed using various thinking tools, and do not exist at present (to the best of our knowledge):
- A cappuccino cup with
a drinking spout at the bottom, so the froth at the
top stays until the end.
- Cappuccino fortified with coffee
dust (finely ground coffee grinds)
that can also be used to decorate the top of the
- Coffee served in a waffle cup - leak proof but
edible and tasty when the coffee has been drunk.
- Self-serve coffee houses - including
instruction - for customers interested in learning how
to make their own cappuccino.
- A coffee house where you always get your
frothed milk and espresso separately.
- A coffee pub where only coffee is served in
combination with various alcoholic beverages
- A coffee house that offers Coffee Reading services
as part of their regular service.
- A coffee house with a robotic coffee machine,
which prepares coffee by the order and walks around
the coffee house.
- A coffee house where the "house blend"
changes every hour and is offered at a discount (for
- An ice cream parlor that only offers coffee ice
creams in a variety of flavors and shapes accompanied,
of course, by coffee
A tip on effective management
A listening recommendation
O.K., this time the recommendation isn't exactly about effective management, but if you love music like I do, you'll understand why I couldn't resist. And anyway, if you really must, you will find a few "managerial" applications to the technology described here mentioned later on.
Let's get to the point: I'm talking about the web site www.pandora.com, which enables you to open personal radio stations with quality sound and songs that are exactly to your liking, within seconds, effortlessly, and without having to install hardware or software, even at the office (if you have speakers or earphones). In fact, if you click on the link to the site and continue reading afterwards, you can try out Pandora while you read.
After you enter the site, a rectangle the size of a car radio disc will appear after a few seconds, and you will be asked to enter an artist's name or song that you like. Afterwards, your favorite band will play for you directly from the Internet - with a wonderful, high-quality sound, and the cover of the disc that is playing will appear on the right hand side of the "radio". If you place the cursor over it, a "thumbs up" will appear on the disc (click on it if you like the song), and "thumbs down" (click if you dislike), and a triangle between them (that opens a links menu to other information and options).
And then a really amazing thing happens - when the song ends, the disc moves to the left, and a new song starts playing, and a picture of the new disc appears. The song that is now playing is similar in musical style to the previous song, and you'll probably like it as well if you aren't familiar with it yet. In fact, it has been automatically selected especially for you from over 400,000 songs (!), according to approximately 200 or more parameters (!) that characterize the previous song: musical style, rhythm, types of musical instruments, singer's gender, song style, etc.
like the new song, click on the "thumbs up", and if you
don't - "thumbs down" (and the station will move to the
next song). This way you "train" your radio station.
After you mark a few songs, it will mainly play
exactly what you like to hear, including songs that you don't know. You will very quickly broaden your musical horizons - and you'll no longer need the assistance of the salesperson at the music store. If you want to delve deeper, you can read about the performing artist, see and sample his/her discs, and buy them in a number of different formats, or simply bookmark the artist for any use you see fit.
After you try out Pandora, you can register (for free) - so that the radio station that you opened will be saved and be readily available for you from anywhere you can connect to the Internet. The general idea is to create specialized radio stations after entering 2-3 fairly similar songs (for example Classic Rock or Jazz with saxophone solos). This will make it possible for Pandora to offer you truly similar musical songs, and maintain a unique character for the station. If you want to diversify, simply create another station.
And as promised, here are
a number of managerial applications using Pandora:
- Improve the
atmosphere. Play original, interesting, and
unrepetitive music in every appropriate space (for
example - to increase productivity on a production
floor, to reinforce an image at a reception desk, for
a relaxed ambience in a dining hall, and for a fun
shopping experience at a store). The database includes
almost every musical style that exists, except for
World Music and Classical Music (they are still
working on how to catalogue these styles, which are
- Give personalized gifts.
You can surprise a customer or employee that likes a
specific singer with an original gift. Simply ask them
what they like, and buy them something similar that
you found on Pandora, that they aren't
familiar with but
will love. Music opens doors and hearts.
- Disconnect. Are you working on a
special project and need some time off from the people
around you? Hook up to Pandora, plug in your
earphones, and forget about the rest of the world.
Create a suitable station (60's music? Chilllout?),
dive into the project, and the music will take you
through to the project's completion.
- Share. You've created a choice
radio station? Send it to an acquaintance that likes a
similar musical style. It's easy to do this with
Pandora - you send your radio station via email, and
the receiver simply opens it and receives the station
that you have "created" and takes it from there.
- Get your daily update. You read
about Bob Dylan's new disc and wanted to know what it
was all about? Open a new radio station on Pandora
(you can open up to 10 stations!), type in Bob Dylan,
and listen to any one of his songs. Click on the
artist's name (appears above the picture of the disc),
and a detailed information page will open up about Bob
Dylan, including pictures of discs in chronological
order. Click on the latest disc (called "Modern
Times"), and an information page about the disc will
open up, including the option of sampling all the
songs on it. You liked it - buy the MP3 immediately
(there's a link), order it on Amazon, or go to your
nearest music store. You didn't like it - you can
always interject with "I heard it. It's actually
nothing special" in a conversation, and be up to date…
- Celebrate. It's also important to
celebrate at work sometimes. When there's a reason to
have party, create a reggae station, rock station,
hip-hop station, Brazilian music station, etc.
Selecting 2 songs for each station and "training" the
songs later on will suffice, and the party's well
underway. " Of course there are many more
possibilities. We'd be happy to hear about what you've