Luxury Industry

Proper marketing in a nutshell.

Isaac Mostovicz writes...

some of my LinkedIn connections invited me, among others to offer 10 tips over ten days about a topic that is important to me. I chose to post on marketing. another good friend, Rodrigo Martinez, a Chilean serial entrepreneur who help entrepreneurs sell their startups for millions decided to publish these tips on his website you can read my tips on Rodrigo’s website at the following address

enjoy the reading.


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8 Remarkably Powerful Ways to Get the Most Out of Your Sales and Marketing Efforts

Isaac Mostovicz writes...

This is an article published yesterday by Peter Economy at Enjoy.

8 Remarkably Powerful Ways to Get the Most Out of Your Sales and Marketing Efforts

According to Isaac Mostovicz, you can’t leave your sales and marketing efforts to chance if you want to succeed in the long run.

In 1960, Harvard marketing professor Theodore Levitt published “Marketing Myopia,” one of the most popular Harvard Business Review articles ever. Almost sixty years later, Levitt’s ideas have stayed fresh and convincing despite the fact that most companies don’t follow them.

Levitt claimed that businesses are preoccupied with own growth, focusing on their products instead of carefully gauging the needs and wants of their customers. Levitt believed this myopic view would cause businesses to fail. And that turned out to be the case when Kodak went into bankruptcy in 2012 as it failed to identify the shift to digital cameras, and when Nokia had to be sold to Microsoft as it failed to identify the shift to smartphones.

Isaac Mostovicz is founder of Janus Thinking, a think tank focusing on the psychology of luxury, marketing, management, and leadership. He is also actively involved in the diamond industry, devising and executing creative marketing programs in the U.S. and Asia.

According to Isaac, if you follow these 8 tips, you’ll get the most out of your sales and marketing efforts — leading to long-term success for your business.

1. Don’t sell a solution — try to find out what the problem is.

Your product is a solution to the needs and wants of your customers. But, do you actually know how your solution satisfies the needs of your customers? Beware of that one solution that might satisfy several needs — you’ll end up not solving anyone’s needs. Each product or service you offer must provide a solution to a specific need. If you want to offer a solution you will first need to discover the customers’ wants.

2. Identify your competition.

Your competition is not only those companies that offer similar solutions or products as your own. Your competition includes all those companies that can satisfy the needs of your customers. Airlines don’t compete only with one another. They compete with all other means of transportation — and when no physical presence is really necessary, they compete with inexpensive or even free online video conference tools as well.

3. Identify your markets.

A market is the agglomeration of all products and services that answer one particular need. Since your customers have various needs, you act in a set of markets and each has its own set of competitors. If you don’t map your markets in detail, you are playing the casino or lottery without knowing what the odds really are.

4. Price war.

This is the cardinal sin of companies. The ultimate role of a company is to survive profitably, and how can you survive if you are cutting your margins too thin? It’s simple: You can’t. If people buy your competitors’ products over the ones you offer, it means that their solution is more appealing. Go and find out why.

5. There is no “best price” — Part 1.

Contrary to what many think, Henry Ford sold his legendary Model T at just $500 because he calculated that this price would allow millions to purchase his car. The rest — the assembly line and mass production came as a result, not vice versa. When pricing, find out first what the price should be by asking your customers and then focus on modifying your costs accordingly.

6. There is no “best price” — Part 2.

Your product costs you the same regardless to whom you sell it to. However, people pay differently according to the needs that your product satisfies. You might have the same product on the same shelf — but with two different price points — because they aim to two different markets. All you need is to clearly identify which product is aimed to which market.

We interpret by comparison and contrasting. That’s why we tend to think that something that’s more expensive is better. Even when you are still unaware of the various needs of your customers, try to offer two price points. Justify the higher price by saying, “My customers find this offer better.” You’ll be surprised at the success of this tactic.

7. There is no “best price” — Part 3.

Managers think in absolute terms. However, how do you know when the offer is cheap or expensive? You don’t! The only way is to compare offers. $10 might be cheap when the alternative costs $15 and expensive when the other offer is $5. However, it is your job to decide what you are compared to. If the alternative to a First Class airline ticket is a video conference, any price you charge for the video service is cheap.

8. Marketing and not selling.

Selling focuses on the seller. Many coaches teach tricks to sell, promising to teach you how to sell refrigerators to Eskimos. Marketing focuses on the customer’s needs. What happens when they don’t need? Don’t try to push and convince. Instead, ask them what you should do. What is wrong with your offer? Who might buy such an offer and why? Don’t stop at a “no.” They might not buy from you but will give you valuable information on the way you should go.

As Theodore Levitt said, “Experience comes from what we have done. Wisdom comes from what we have done badly.” And wisdom is not that bad.

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Look inside yourself

Isaac Mostovicz writes...

Do you want to innovate?

Do you feel that your business needs a change?


You are wrong because you seek solutions outside. You are unhappy with what you have and search for the Holy Grail. You believe that the neighbor’s grass is greener.

I was recently asked to consult a company that struggled with its sales and profits. They expected me to come with a program that would create a paradigm shift and that will transform the entire company into something totally new.

All I did was putting together some ideas from various areas of my expertise and presenting them to the marketing managers. “What can you do with this?” I asked and the ideas started to flow backed by data that the company already had. Within an hour we had a basic plan on how to progress. The entire team was mobilized enthusiastically knowing that they can do it.

Never look for external solutions. Look inside you! You know best what the solution is.

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Think Beyond the Commodity Mindset; Turn your Offer into Luxury

Isaac Mostovicz writes...

TEVA is trapped in a mountain of debt exceeding $40 billion.

Fourteen-thousand employees which made up 25% of TEVA’s workforce will be laid off. It needs to think beyond traditional restructuring.

This is hardly news. That’s the nature of the business landscape that exists in an unfortunate vicious cycle: grow, borrow, expand beyond capacity, and restructure to start all over again. Not every company fully experiences this entire cycle. Many companies will fall victim to their debt and become prey to their hungry competitors.

According to McKinsey, 95% of companies don’t understand their value proposition, and consequently, trade on price. Alternatively, we can say that these companies show one fundamental symptom: They have the commodity mindset. This mindset is our own creation. We need to first understand how we create this mindset, what it entails and how can companies cure it.

The creation of the commodity mindset

The commodity mindset is a set of beliefs and assumptions that put together lead to a business trap. As the old saying goes: “We buy with our hearts, and then justify it with our heads”. Organizational behavior is no different, and companies are creative enough to explain their success. They won’t look further. They won’t check whether the explanation to this success is valid at all or whether they can explain their success in a different way. Their mindset becomes “one solution fits all”. They will rely on surveys and reports because they support their logic. Their offers are solutions to hypothetical problems. Hypothetical, because these companies never checked with their customers what their real problem is.

However, even when companies have successful solutions, the solutions are always easily copied by competitors and leads to price war. The only way to win is to slash prices and to reduce profit margins. Not one company would survive this way. It would either come out with their money, or will end with a loss.

When it is impossible to make even one dollar of profit the way of growing is by becoming bigger. Companies try to take over their competition as a means of survival. This defensive behavior may save the company from losses, but will not help it grow.

This mindset doesn’t allow companies to raise prices and blocks their growth. The only way to grow is by becoming larger and more potent. Regrettably, with no profit and no cash these company need to borrow.

Hoping to curb the competition is a false hope and wishful thinking. Competition will always exist and will put so much pressure over the profit margins that the borrowing company will not be able to pay its debt unless it divest serious portion of itself and raise the necessary funds. The only way to continue is restructuring.

Hence, the commodity mindset is set because of two reasons. Firstly, we were educated to appreciate the superiority of logic over emotion. The easily copied “one solution fits all” is a tribute to our rational thinking. Secondly, we perceive the principle of the “survival of the fittest” in its primitive, animal-world format. Companies prefer emotionally to defend their offer through price war where even the winner will be left licking its wounds. Consequently, companies following this commodity mindset committed one cardinal sin – they never talked to the customer.

Talking to the customer

Can we rely on reports and surveys? Not really. That’s how Blockbuster lost its market to Netflix. Reed Hastings, Netflix co-founder and CEO explained how he met with Blockbuster and tried to convince them that their business model is outdated. Managers of Blockbuster explained from one their reports that “our customers like to come in, to check the DVD boxes and to read the reviews on their back”. However, Netflix’s Hastings visited Blockbuster’s outlets and actually talked to the customers to hear a different story. The rest is history. Blockbuster went bust, and Netflix took over the market.

You’d think that marketers are immune and know their way. After all they should know who the customer is and they should talk to him. Unfortunately, this is not the case. The marketing buzz is that video use in social media will spike up in 2018. I asked a friend and he quoted 42 marketing statistical researches supporting this argument. Those statistics have one similar flaw – none of them checked the customer’s view. Marketers are now busy producing videos, justifying it with statistics which is totally unsubstantial. LinkedIn users know very well that the text-only posts are the most read and most viral. They know this from experience, not from statistics.

The alternative marketing approach

When talking to customers you will discover two important points. Firstly, the belief in “one solution fits all” is wrong. Each customer has his own particular needs to satisfy and all are using the same product as a means only to their particular goal – satisfying their particular needs. These individual needs are a challenge to the marketer who needs to synthesize them into larger segments.

Secondly, and contrary to the logic approach of the commodity mindset, customers are motivated by emotion and not by logic. Luxury is doing exactly this. It uses the bare product, the commodity as a platform for delivering the added value – answering to the emotional needs of the customer and cashing on it. Luxury is expensive because it is laden with emotional added-value.

In 1988, Mazda introduced its 626 model to the UK market, and it was compared to the Mercedes-Benz and BMW models that were sold for $49.000 or more. Mazda asked in its advertisements why customers pay extra money when they can get a similar car for less. Mazda missed the point. Though the 626, Mercedes-Benz, and BMW all offered a similar product, people would rather pay for the added value that the Mercedes-Benz and BMW offered that couldn’t be found in the 626.

Hence, the alternative marketing approach is luxury marketing or marketing based on principles of luxury. There is a fundamental difference between the commodity and the marketing approaches. The commodity approach is based on removing any chance for choice – one solution exists and it should satisfy all. On the other hand, the luxury approach is a tribute to the underlying quality of man – his ability to choose. Therefore, any luxury-type marketing offer is based on several good options to choose from.

For developing these options we start with careful market research that would reveal the subconscious, emotional needs of the customer. It follows with segmentation practice that will synthesize these various needs into large enough segments to market.

As a result, the company will have several products, each fitting a different segment’s emotional needs. Because of the emotional added-value of each offer the company will be able to raise its profit margins. The more laden with emotional added-value the offer is, the higher the margins will be.

It is impossible to stop competition, and all the company can strive for is to dictate the rules of competition only. The way to compete is to have a direct dialogue with the customer and to authentically answer his emotional needs. The competition will have to do exactly the same – find its own authentic voice, create an intimate dialogue and answering the customer subconscious needs in its own way.

However, this approach is based not only on identifying the particular needs of each customer but also on segmentation – synthesizing these particular needs into coherent segments. There are no rules here and each company would be able to define its particular marketing approach. There will never be one winner takes all.

The case of TEVA

Not only I am not familiar with the pharmaceutical industry, any professional advice needs to be supported by prior sound research that I never conducted. Nevertheless, we can examine few of the challenges that TEVA might face.

Elementary to luxury marketing is that the customer will have a choice that reflects his particular emotional needs. This is usually not the case when the patient accepts the decision of the physician that doesn’t take the patient’s emotional welfare into account. How can we allow the end-customer the ability to choose between equally good solutions?

Next, we need to understand the physician’s motivation. Faithful to our approach this group – the physicians is segmented as well. Finally, the health insurance companies, which finance the treatment are also not all cut from the same fabric. They all have their motivations that need to be satisfied. In my research on boards I could clearly identify patterns of behavior that need to be satisfy. It is not enough to say that these companies like to act in a thrifty way. The question is why they act so and the answer varied and reflects the decision makers’ worldviews.

However, as the problem becomes more complex it may allow TEVA to develop its unique answer that will satisfy the true needs of all stakeholders at once. A solid answer will position TEVA as resilient to competition and allow the company growing with better profit margins.

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How to profit from likes

Isaac Mostovicz writes...

Gary Gilmore was executed on January 17, 1977, at 8:07 a.m. by firing squad at Utah State Prison in Draper, Utah. His last words were “Let’s do it!”

These words inspired Dan Wieden to coin Nike’s slogan “Just Do It.” It is considered one of the best taglines of the 20th century. Nike’s campaign based on this tagline propelled Nike’s American market share of sport-shoes from 18% to 43% within ten years.

Jerome Conlon, then Nike’s Director of Marketing Insights & Planning illustrates the challenge. America faced increasing obesity, a recession and reduced funding for school sports. Nike was popular among male athletes, but it was losing the female market share to Reebok’s aerobic shoe line. To win in the game of business, Nike needed to become popular with women, youth and baby boomers.

Nike’s aim wasn’t the one million professional athletes; it wanted to unleash the athlete within 150 million Americans. It appealed to the dreams of people, and their inner yearning for healthier life. All they needed was to put on a pair of runners and start jogging. All Nike wanted them was to purchase a pair of shoes and “Just Do It.”

Did this campaign help the US to combat obesity and procrastination? Not at all. Wearing Nike’s sneakers became a statement. Not an athletic statement, as one might think but a “me, too” statement. One million professional runners used the shoes to compete, and the rest were just clicking a mental like every time they saw a Nike ad. Eventually, these likes turned into purchases.

Every time people wore their Swoosh labeled shoes, they sent out a share, and their friends got a mental notification.

Eventually, these likes turned into purchases.

How can you financially benefit from the likes to your posts?

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One Question

Isaac Mostovicz writes...

Any call for creativity or innovation intrigues me. So, when I got a call to join a brainstorming event with tens of thousands of participants I expected to get some stimulating ideas, some exciting questions to bite in.

I managed to find this post which claimed that the 100 questions on its list inspired 454,000 ideas. The call for action was to add more to this long list of ideas. Well, I stopped at the first question wandering what I am missing, what went wrong with me and why I couldn’t be triggered by any one of those questions?

Here is the first question on the list. How might we increase the productivity of Singapore?

Well, I cannot answer this one but at least I have a few questions:

1. Why is it so important to increase the productivity?

2. What might happen if we didn’t increase productivity?

3. What are the hindrances that blocked productivity?

4. How do you know that these hindrances are what block productivity?

5. Why were these hindrances created /imposed on in the first place?

6. Why weren’t they removed until today?

7. What are the untapped or underdeveloped capabilities of Singapore that might help us increasing productivity?

8. Why were they left untapped until today?

I can go on and on but one question nagged me, and it can be developed further: Why do you consider this type of question “innovative” or “out of the box”?

Moreover, checking the above list of questions you can apply them to most of the 100 questions presented.

This leaves me with one question?

What can be the one tough question that will really force us to think out of the box, to delve deep inside and to let our creative juices run? Maybe we won’t find a remedy for Singapore but a good question will broaden our horizons and allow us to think differently. Isn’t this what this group about?

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Transform yourself

Isaac Mostovicz writes...

I am so happy to move forward with the new initiative of Janus Thinking. We are creating a new community for all those who are interested in my ideas about luxury, marketing, management, leadership and diamonds. Looking at what I discussed in the past it is clear that the call is for you to transform yourself. But, how can you do it?

The first lesson is here – a video that will introduce you to how to think about transformation. Above appears the trailer to this video and to get the full video please go to .

Join our community for more ideas and insights.



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Becoming a Creative Warrior

Isaac Mostovicz writes...

I recently had the honor of being interviewed by Jeffrey Shaw on Creative Warriors Unite. We spoke about the behaviors behind luxury marketing, reaching people’s deeper desires, and creating memorable experiences.

It was interesting to learn Jeffrey’s insights into my ideas. He shared how as an experienced photographer, clients would ask him to take “family photos.” Many people could take basic photos, so why would they call him? People were really seeking a photographer who would capture the emotion of moments that they would treasure for the rest of their lives.

You can listen to the podcast at

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This is luxury, too!

Isaac Mostovicz writes...

dining-table-1348717_960_720 Permit me to acquaint you with the Ultra-Orthodox Jewish society. While by most measures – morally, intellectually and educationally – this might be considered elite.  However, many choose to live in poverty seeking high social standards. Their budgets are tight, but properly feeding their family is important, seeking out cheap solutions. Suppliers to this sector know that money talks –selling food staples with low margins, benefiting instead from economy of scale. The average household is 8-10 heads.

Furniture needs to be durable and long lasting. IKEA is well designed but won’t survive years of active children.  Carpenters serving this sector learned how to manufacture what is best for this society. Most apartments are tiny with no extra space. The measurements need to be concise, or the carpenter will need to start again.

A recent debate in Hamodia, the only one newspaper that the Ultra-Orthodox utilize, discussed complaints about dishonest furniture stores. These stores asked for payment in full when ordering, but didn’t properly deliver. The examples were many. Delivery time was not respected, the furniture didn’t fit, or the color wasn’t right. One of the recommendations people gave was to always buy at a store that has a sign above it. Many stores keep costs down in this community by not having a sign.

Next, the store owners came with their stories. Payments canceled and custom-made furniture refused and could no longer be sold. This at the cost to the store owner. Two sides of the story, the customers and the suppliers.

The newspaper brought one best-practice example. The story is about a woman with a shop without a sign or a name. She has run a successful business for over thirty years. She insists her relationship with the customer is purely business, friendship is not part of the deal. She asks for a down payment upon ordering and for a moderate payment plan allowing for prefixed instalments. Over the years she has had a bad experience or two, but nothing dramatic. Mistakes happen and she offers customer service to make it right. Above all, she delivers on time. Her secret is paying her suppliers in full and in advance, motivating them to deliver as quickly as possible. The last principle that she shared was that trust is paramount. She believes in what she offers and trusts the customer.

Many lessons can be learned from this story. Instead of competing on price she competes on insecurity, a common theme. The customer delays payment and the supplier wants full payment up front both trying to reduce their risk. After all, nobody can really guarantee the furniture will arrive as ordered and on time. This woman does exactly that – she does whatever is needed to reduce the insecurity factor. Delivery is on time and if it’s not right, she makes it right. Her margins are high because she has removed the risks, keeping her customers and suppliers happy. That’s how she is successful in this competitive business for over thirty years.

The final point is interesting. She is a supplier not the customer’s friend. No birthday cards or occasions celebrated with her clients, no fancy store and not even a sign. She focuses on what she offers –her customer’s peace of mind.  She knows what they need –remove the uncertainty – and that’s what she successfully delivers in this highly competitive market.  This is luxury.

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Turn your business into a luxury one

Isaac Mostovicz writes...

A common misunderstanding about luxury is that it is part and parcel of certain products or services. This is the wrong approach! Luxury is, in reality, a specific approach to marketing a good or service so that it touches the deeper needs of a customer. For example, in my article “Why diamonds stink more than fertilzers?” the term used to describe the success of ICI– Fertilizers was “segmentation.” Nevertheless, a close examination revealed that fertilizers were marketed as a luxury. Yes, even that stinky substance could successfully become a luxury item by following the rules. How about your business?

There are a handful of factors which characterize luxury. One prominent factor is price. A luxury item is expensive and is never sold at discount. ICI-Fertilizers managed to sell fertilizer as a luxury at higher prices while their competitors sold fertilizer as a commodity at prices that barely covered their costs. Many times almost an entire industry lowers their profit margins to a dangerous level while one company maintains high prices, Apple, under the guidance of Steve Jobs, is a good example. Many companies left the market because they couldn’t compete any longer, but Apple kept selling PC’s at high margins, becoming the largest and the most profitable company in the industry. This was possible because they followed the rules of luxury.

Let’s examine the PC, they are bulky, ugly and tend to have a narrow range of colors and designs, and the software is not great. On the other hand, Apple asked themselves what were the customers’ needs. They realized that nobody needed a PC, and a PC was just a means to a goal. By understanding the deeper needs of the customers Apple designed its computers to deliver those inner needs creating its legendary interface. The end result was a machine whose role was to satisfy the user’s needs. Apple doesn’t charge for its PC’s, it charges for satisfying deep needs, something that no other company had managed to do. This approach brought in more money, higher margins, and loyal customers.

On the other side of the coin we have diamonds. What should be considered the pinnacle of luxury has turned into commodity. Instead of understanding why the customer wants a diamond and satisfying that particular need, the entire industry is focused on offering a product that actually doesn’t have much use. Consequently, diamonds became commodities and people slashed prices to a point that brought the industry to a state of bankruptcy.

To turn something into a luxury is not easy. On the one hand, if one follows a limited number of rules it is possible. Following those rules calls for commitment, changing our mindset, high moral values, and ultimate responsibility for what we are doing. In my workshops I stress the importance of personal values and caring for the customers. Do it right and commit to it and your offering will become a luxury, providing you with tremendous satisfaction.  Do you have the courage to jump into the water and start swimming?

In the next few articles I will explore other aspects of luxury. Stay tuned.


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