ProductNet - Moving the World For You

Part II

An interview with Ari Manor, CEO of ZOOZ
on the unique ProductNet project 
Published in Hebrew in Bina Iskit magazine, October 2001

GatorClamps by Tefenplast, a product line that served as a model for the ProductNet program, is already sold in retail chains abroad:

Is funding capability an obligatory criterion for joining the program?
The program is principally intended for subcontractors capable of investing approximately $100,000 in the process. When you sell to international chains, you must achieve extremely high standards, with no room for mistakes or improvisation. The money is required, among other things, for legal examinations, industrial design, packaging design, model building and an overseas exhibition. Most of the new initiatives fail due to funding obstacles or get stuck in mid-process when the money runs out, or when the product has no demand and it turns out no comprehensive market check has been performed. You should be aware of the risks involved. 

How can one avoid the most common errors?
One of the most important methods of developing a business is to work with good consultants. However, consultants come at a cost. There are several government plans that provide business and marketing consultation consisting of several dozen hours (at about $50 an hour), and the government funds at least half of this cost. These consultants may assist in financial advice, for example, such as cash flow and temporary employees. If you intend on importing a machine from overseas, there are consultants specializing in that. A strategic consultant could, for example, perform an analysis of the business's current state: weaknesses, strengths, threats and opportunities. The advantage of using a consultant is the more extensive business overview, which enables him to look into the business from a wider angle.

How does one choose a consultant?
In business, the true test is repeated purchases. Therefore, the consultant's job is to find something you're good at, and that clients would repeatedly want. On the other hand, the firm's job is to choose a good consultant, which is certainly not an easy task. Normally, you may check if the consultant works with similar companies and ask for references. It is vital not to neglect the examination and not to compromise (even with government funding and supervision), as a consultant must be someone you trust and run ahead with in the management of your business. It is essential that you find a common language with each other. 

How can consultants assist the owners in finding "that special thing"?
Marketing consultant take something you're good at and market it to new types of audiences. If you consider for example a printing press situated in Netanya, they would look into the possibility of co-operating with setting up a service point in a nearby city, or building a website to reach new audiences. The ProductNet program examines the capabilities, advantages and production infrastructure that you possess, and then develops a new line of products for you that make use of the plant’s existing infrastructure and knowledge. During a recession one should do everything to reduce the risks of entering a field in which you are less than an expert. The consultant's role is, among other things, to bridge the knowledge gaps, to minimize risk and to offer applicable and effective solutions.

What is ProductNet's work process?
The first stage of the program is a learning process, during which manufacturers get to know the market while also studying their own capabilities. The first thing we actually do with manufacturers is to show them what the retail world means. We take them on a tour of "Home Center", explain about packaging and why it is so important for marketing, and other issues they are not aware of as subcontractors. At the same time, we examine the factory's production capacity, technology and its advantages.

Each team is led by a senior manager that spends half of the time overseas anyway, where he meets buyers representing other clients from Israel. This way we are able to provide continuous contact with overseas buyers at minimal cost. The second team member is an experienced, Israeli-based product manager that takes care of the daily activities - working for instance with the package designer, lawyer or patent register.

Who actually manages the marketing of the new product line?
As previously mentioned, the development and marketing of the product line is managed and carried out by a pair of consultants. They are veteran professionals with a track record of putting dozens of successful products on the shelves of large global chains such as "Home Depot", "Ace", "Office Depot", "Wal-Mart", etc. They act as managers of the enterprise, coordinating between all the parties involved and identifying the market for the products, while focusing on increasing the company's profitability.

When we created the program we went to great lengths to make the change process as smooth as possible. That's why it is entrusted to the hands of two experts during the initial stages, experts that are additional clients for the subcontractor, similar to his regular clients. This way, the subcontractor itself continues to function as an "ordinary" subcontractor, not required to practice new skills. Notwithstanding, he is learning and taking part in the process. After sales have been made, the subcontractor is able to mobilize financing and pay for professional management of the new start up he owns, which in many cases will end up being several times bigger than the original business. 

Who is behind the project?
ZOOZ is managing the project. ProductNet enjoys massive support from the Industry & Labor Association, first and foremost by its CEO, Zfia Gilat. We also have the active support of Yohanan Levi, Deputy CEO of the Ministry of Trade and Commerce, and of Nir Ben-Aharon, Head of the Nitzoz program. The program is partially funded by government programs, including the Ministry of Commerce and Trade’s Nitzoz program, and Business Mentoring of the Israeli Export Institute.

One factory has successfully completed the ProductNet program and four more are in various stages of the process. Considering the availability of our consultant teams, and other teams being recruited at the moment, I estimate that the following quarter will see five new subcontractors join the program, which opens a path to success and growth even during a recession.


To read the first part of the interview - click here.
For the response of Zfia Gilat, Head of Industry & Labor Association - click here.
For the response of Boaz Zar, CEO of Guy Plastic, a comapny taking part in ProductNet - click here.
For marketing tips by ZOOZ - click here.
Go to: Part I | Part II | Part III | Part IV | Part V