| Issue 12 |

To Focus or not to Focus (on a specific target audience)

A niche strategy enables one to provide a solution that is better suited for a specific segment of the population, thus earning their trust and money. However, the following issues must be carefully considered before attempting to implement such a strategy:

• Why niche? Specializing in a certain type of costumers makes it possible to offer a more focused approach, better service and get higher response rates from the target audience. Thus, for example, the owners of the recently opened Givataim Mall decided to focus on women, and their ads appeal directlt to this group, ignoring the men population. In order to back this up, they may adjust the choice of shops at the mall, the added services offered (e.g. babysitting), and the service providers (good looking men?) specifically to women.
• Is niche worthwhile? When considering a niche strategy, one must first define an economic goal, and then make sure that the target audience has sufficient buying power, and that the investment in turning to the niche is worthwhile. For example - Israeli consulting firms that specialize in one industry only (e.g. pharmaceutical industry) soon discover that it is hard to base a decent business on that alone, and that in order to survive they must turn to other countries, and/or other Israeli industries. Moreover, they realize that because they started by specializing in one niche, it is difficult to present case-studies and references from other industries, and they have also been "tagged" as specialists of the pharmaceutical indusrty...Therefore in order to grow it is necessary to set up a seperate firm, and develop a distinguishable, more general brand. An early analysis would have saved the problems of entering a niche with insufficient buying power.
• Do costumers identify with the niche you chose? Lawyers, for instance, would prefer consulting by a consultant specializing in law firms, and might turn down the services of a small business consultant (even if their office is in fact a small business). They expect to be approached with respect, and the status of a "simple" small business is not appropriate for them. For similar reasons, a fancy launch of a daily newspaper for women in New York, by the publisher of New York Times magazine, failed completely. It turned out women simp,y don't want "specialized treatment" in this area, and prefer a daily newspaper "just like for men", and regard a women's daily newspaper an insult to their intelligence. The conlclusion: if you choose to turn to a niche, make sure before you start that the members of the niche identify themselves with it.
• What happens when the niche is exhausted? When Pelephone first penetrated Israel with cellular phones, they turned to senior managers, that could spend thousands of shekels on a mobile phone. The mobile phone, which was at the time a new an hot product, was sold as a status symbol to industry leaders. But...the Israeli market is not that big...and pretty soon everyone who could afford the expensive mobile phones - already bought one. Pelephone wanted to increase the circle of users, and to sell phones the less senior managers. They had to convince the senior managers to give up their exclusive status symbol, and allow lower level managers to buy mobile phones paid for by the firm. The brilliant campaign they came up with ("Pelephone turns a lost hour into a working hour") helped managers convice their CEOs that it is a vital and productive work tool. The conclusion: if you enter a niche, you better make sure in advance that you can exit from it when the time comes. Therefore, it is important the define the nearby niches, and plan an expansion move towards them.
• Is a niche always a niche? In many cases, a focused appeal to a specific target audience is only intended for the penetration phase, which means that it is temporary. In such cases, the product are suitable for the whole population, but are intentially marketed to a certain segment, that has a powerful influence on the rest of the population. Examples include movie stars that get designer dresses (free of charge!), and new electronic gadgets marketed to gadgets freaks - not because these segments have high buying power, but because of their strong public influence. Movie stars will wear the dresses to publically broadcasted events, and freaks tend to share innovation news with their friends and pass their enthusiasm to others.
• The "non costumers" niche: We discussed this on our previous column on blue oceans. This is almost certainly the most important niche of all, and yet the one mostly ignored. Sometimes, its buying power is bigger than all other existing costumers of a given market. When you develop a wine for non wine drinkers, schools for school dropouts, or DIY products for those with "two left hands" - you increase the entire market, along with your chances of success.

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Innovation ideas in Mobile Phones

The following ideas were developed using various thinking tools, and do not exist at present (to the best of our knowledge):

1. A mobile phone that serves as a wallet (with toady's small phones, it is possible to include a key compartment in one)
2. A mobile phone with a recepetion interference button (for ending unwanted calls due to "bad reception")
3. A button for saving important recorded messages on the machine's memory (for example - these kind of messages)
4. A mobile phone with a rotor dial (neat, isn't it?)
5. A mobile phone that fits into another mobile phone, using its energy (when the battery is out)
6. A mobile phone that turns into a regular phone (with an appropriate wall connection line)

• Articles on Systematic Innovation 
• We will be glad to read your comments and suggestions

Stand-Up Meetings

Here is a simple and nice idea we got from an equally nice costumer - Shilav babywear storechain. A common problem in Shilav, as in many organizations of our day, is the lack of time and load of work. At Shilav, a daily briefing and coordination meeting is held every morning. This takes up valuable time, yet is necessary for the ongoing work. Therefore, it was decided to held these meeting...standing up. Meetings are thus short and very efficient, since no one talks endlessly when everyone is standing up listening. Simple, elemntry, but works like a clock. Every day, five minutes, including coffee. Free morning exercise included.

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