SIMPLISITY: THE NEW VALUE PROPOSITION

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SIMPLISITY THE NEW VALUE PROPOSITION
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RETAIL COSTCO VS. SAMS CLUB

• Costco's motivated employees also sell more
  795 of sales per square foot, vs. only 516 at
  Sam's and 411 at BJ's Wholesale Club Inc. (BJ ),
  its other primary club rival.
• Business Week, APRIL 12, 2004

The other problem was that Sam's didn't cater to
the higher class of people that Costco did. Now,
Jim has done a pretty damned remarkable job. He
puts a great emphasis on quality and has moved
into the food business and other new lines. We
the Prices were very good at creating, but Jim
was very good at developing. http//www.teamster.
org/04news/hn_040211_6.htm
A sure way to attract and keep customers is by
selling goods on the cheap that they didn't
expect to see. That's why racks of fine wine have
been installed, as well as books ranging from
best-selling novels to fairy tales. Those are in
addition to Sam's ace amassing and selling, at
bargain prices, items people need
most. http//www.usatoday.com/money/industries/re
tail/2003-06-19-warehouseclubs_x.htm
Costco is used to making high-end goods
available to its shoppers, most with annual
household incomes topping 75,000. Items such as
Mont Blanc's platinum Generations pen go for
98.99. Then, there's the Omega Constellation
women's watch for 2,199.99. http//www.usatoday.
com/money/industries/retail/2003-06-19-warehousecl
ubs_x.htm
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FINANCIAL SERVICES ING DIRECT VS. BANK ONE
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FINANCIAL SERVICES ING DIRECT VS. BANK ONE

• ING Direct's products are straightforward
  mortgages and home-equity loans, a half-dozen
  mutual funds, and CDs and savings accounts that
  pay some of the highest rates available. There
  are no fees or minimums. Customers can manage
  their accounts online, by phone, or by mail.
• In just two-and-a-half years, ING Direct has
  attracted more than a million customers and 10
  billion in assets, shifting from startup mode to
  being one of the 50 biggest banks in the country.
  New assets are streaming in at a rate of close to
  500 million a month. ING Direct, based in
  Wilmington, Delaware (but a division of the
  Amsterdam-based ING Group), had expected to lose
  37 million in 2002. Instead, it turned a profit
  of 40 million.
• FAST COMPANY, March 2003, Page 110 By Scott
  Kirsner, http//www.fastcompany.com/magazine/6
  8/ing.html

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RESTAURANTS SHABUSEN VS. YOUR LOCAL BUFFET

• As Vancouver is well known for its sushi, this
  place is one of my faves.It has an all you can
  eat sushi variety, as well as all the teriyaki
  and they even have meat that you can bbq in the
  center of your table, on a little sunken bbq.
  Usually very busy, as it is very
  popular.Reasonably priced, and friendly serving
  staff. Also of mention, is the second floor
  viewing of the hustle and bustle of the streets
  down below, for those of you who like to people
  watch.
• Source http//www.virtualtourist.com/vt/dc80f/2/-
  3/

• Reviews "The best Japanese All-You-Can-Eat
  anywhere!
• "I eat at Shabusen on a weekly basis and don't
  mind the half hour drive to eat their sushi.
  All-you-can-eat menu is available, with bbq at
  each table or hot pot. Prices are reasonable and
  service is very fast and friendly. Newly
  renovated with pleasant decor. They are very busy
  on Friday and Saturday nights, reservations are
  recommended. I highly recommend this restaurant!
  A
• - Theresa O (sushiimonster_at_yahoo.com) (April 15th
  2003, http//www.sushi.infogate.de/rest/na_canada_
  vancouver.htm

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COMPUTERS COMPAQ X1000 VS. OTHER LAPTOPS

• Member ratingJust bought the X for my wife. Set
  up our first wireless network and everything went
  well. The widescreen is fabulous to look at and
  the notebook very easy to use. We got the 1.3
  and seems to be as fast as my p4 2.5 desktop. For
  most people the WXGA screen will be good enough,
  max res of 1280. Anyway first notebook and
  really loving it. Member ratingThis computer
  truly represents a new age in mobile computing.
  It is incredibly fast, on battery power it lasts
  twice as long as any other computer I have owned,
  the screen in bright and accurate, as a
  multimedia / entertainment computer few will top
  it, and for all it offers, it is remarkably thin
  and light. Go to a store that has an X1000 and
  other notebooks on display. Notice how the crowd
  gathers around the Compaq. There is good reason
  for that.http//www.pcmag.com/article2/0,1759,120
  2339,00.asp

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WINNER PRODUCTS HAVE A LOT IN COMMON

• Straightforward, simple product offering.
• High-end, sophisticated, quality product.
• Limited choice.
• Winner product features the product includes
  many traditionally optional features.
• Attractive pricing allows achieving high sales.
• Low overhead the product itself produces buzz.

High-End, Sophisticated Product
Limited Choice
Simple, straight-forward offering
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OTHER THINGS TO THINK ABOUT

• What industries this simple value proposition
  could work in and why.
• Role of economies of scale.
• Existence of winner configuration.
• Simplicity should provide value for consumer and
  cut cost for marketer.
• How to invent simple products.
• What else?

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APPENDIX
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ING DIRECT PRODUCTS
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A BETTER SAVING ACCOUNT

• ING DirectING DIRECT offers an alternative to
  traditional banking that provides a better value
  to customers. ING DIRECT (the operating name of
  ING Bank, fsb) does business online, over the
  phone or by mail, and that keeps costs low.
  Without the overhead and high operational cost of
  other banks, rates on the Orange Savings Account
  and Orange CD accounts are higher and rates on
  home loans lower. The savings and CD accounts
  allow you to earn the highest rates in the nation
  with no fees and no minimums. The Orange Mortgage
  is an adjustable rate mortgage with no
  application fee, no points, and great rates that
  can save you thousands. ING DIRECT is banking
  made simple to help you Save your money!
• Source http//www.ing-usa.com/us/prod_serv/bankin
  g/ing_direct.html