| Issue 33 |

To increase segment or market?

When forming a marketing strategy, one of the questions that we have to answer is: What is the objective of the strategy – is it meant to increase our market segment, or alternatively, increase the entire market?

The first option, increasing the market segment, will come at your competitors’ expense. In other words, if we increase our market segment, our competitors’ market segment will shrink. “Stealing” market segments is no easy task because competitors may put up a good fight. Growing at the expense of our competitors is possible using successful differentiation, launching new products, aggressive sales or particularly attractive sales promotions. However, you will probably still be mired in a crowded and competitive market, or a “red ocean” in other words (with numerous predator fish and bleeding competitors). Therefore, the strategy should be planned with extreme fastidiousness and attempt to combine business intelligence with simulations that take competitors’ reactions into account. Also take into consideration that even if you achieve an increase in market segment, it will come at the expense of your profitability. In order for it to pay off in the long term, you should verify that the “stolen” market segment is strategic. For example, will make you a “master of the market” (and then you can benefit from the size), or that it will cause a few of the competitors to leave the market and make it less competitive (and more profitable). The bottom line is that this is a real war and war always carries a heavy price, and you have to check very carefully if it’s worth it.

The second option, increasing the entire market, entails identifying ways to increase consumer consumption. If it is an increase in consumption among existing customers (for example, milk drinkers will drink more glasses of milk per day), then the competitors may also benefit from it. And when potential customers (for example, those that do not yet drink milk) are also persuaded to purchase the products in your industry (milk, for example) instead of other alternatives (water or coffee, for example) then all the competitors in your industry (milk suppliers) may benefit from it tremendously, and the growth in your industry will come at the expense of other products and industries. Occasionally in such situations, competitors even collaborate in order to promote the increase in consumption of the entire industry (for example, a Dairy Council joint advertisement). However, even if you do not collaborate with the competitors, and you have found a way to persuade customers to abandon the alternatives and make the transition to your industry, it can definitely pay off for you. So what if your competitors also benefit? The main thing is that your revenues increase, and not what happens to the competitors. In addition, if you succeed in increasing consumption, you are not fighting a head on war with your direct competitors, and therefore your profitability will not be jeopardized as well, and in most cases will even improve. The bottom line is that if increasing your market segment is difficult, then increasing consumption in the entire market may be more worthwhile for you. In such a case, your entire marketing strategy should focus on this. Attempting to increase the market segment as well as expanding the market, will fail in most cases. It’s better and more effective to choose and focus on one goal.
 

 In fact, there is another way to make money from the “non customers”. This can be done by identifying “blue oceans” – a place where your competitors do not even exist. In a blue ocean you can enjoy serious growth and high profitability over time. In order to reach a blue ocean you have to develop an innovative and special product mix that will seduce the “non customer” into becoming your exclusive customer. We’ll elaborate on that the next time…

• For seminars on Strategy and Marketing: click here (PDF booklet, in Hebrew)
• For the article on Blue Oceans in Israel: click here
• For additional articles on strategy: click here
• Information on strategic consulting: click here

Ideas for innovation in home espresso machines

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

1. Flavored coffee capsule halves (for preparing coffee “cocktails” of varying flavors and types).
2. Coffee “on time” (integrating a clock in the machine so the machine can automatically prepare a coffee at a pre-programmed time).
3. An espresso machine that combines a chilled milk compartment (the machine automatically steams the milk for cappuccinos).
4. A cup dispenser (keeps real cups and produces up to 12 cups of coffee in sequence, for guests).
5. An espresso machine with 3 sugar compartments – white, brown, and artificial sweetener (sweetening is automatic and does not require mixing prior to drinking).
6. Separate compartments for coffee and cocoa/hot chocolate powder (useful for both parents and children).
7. Integration of a steam valve – for quick ironing of clothes (shirts, etc.).
8. An espresso machine that limits the amount of coffee that each person drinks per day (the machine can identify the people by means of individual passwords).
9. An espresso machine that combines an ice cube compartment and a blender (for making ice coffee automatically).
10. Let’s wake up, have a good cup of coffee, and then think of something else…

• Articles on Systematic Innovation  
• To learn about Systematic Innovation Workshops : click here
• We will be glad to read your comments and suggestions

Sending Large Files

If you have to send an especially large electronic file such as a presentation to a client, a report to a colleague, or specifications to a supplier, your recipient’s inbox may be too small. In this case, using the services of the www.filefactory.com website is recommended. You can save particularly large files (up to 300 MB) in this site’s servers, free of charge and without needing to register. After you upload your file to the site, it will be saved on filefactory’s server for up to seven days, and then be removed automatically.

When you upload the file to filefactory’s servers you will receive a direct link to your file. This link can be sent to anyone you please, and the recipient will begin downloading the relevant file when he / she clicks on the link. In fact, you can send this link to a number of recipients, and they can download the file from the site throughout the entire week that the file is stored there. You can upload and store an unlimited number of files on the site, so you can store a few files, or a larger file divided into parts.

The site also provides premium services at a fee (documentation of who downloaded which file, unlimited daily downloads, a program for splitting very large files, and more). The recipient’s computer must be connected to the Internet in order to download the file, meaning it has to have a fixed IP address. If the computer is connected to the Internet via a central server – for example at work (a temporary IP address), the site will require registration to the premium services in order to download the file. This can be bypassed by downloading the file from home, or downloading from the server with the assistance of the organization’s server administrator. If you have managed to overcome this obstacle, it is an extremely useful site even without the premium services. I recommend that you bookmark it for whenever you need it. Try it and enjoy!.

• File sending website: www.filefactory.com.
• Information about the Effective Presentation workshop is available here (p. 19 in the Hebrew PDF file).