Case 4: to Pay or Not to Pay: Zagat’s Dilemma

690 Words Jan 13th, 2013 3 Pages
Case 4: To Pay or Not to Pay: Zagat’s Dilemma 1. Substitute Products and Services: There are several substitute services to that of Zagat including Groupon, Google Places and Yelp. Yelp proved to be the most popular substitute of Zagat with growing popularity with 26 million users as opposed to Zagat with 269,000 visitors in January 2011.
Customers: Zagat’s brand is recognized and used by food-lovers, travelers and restaurateurs.
New Market Entrants: Zagat is a new market entrant into the online and mobile platform industry. Zagat is trying to enter the market as more consumers take advantage of online and mobile technologies. As they transition into the online and mobile platforms Zagat is facing opposition from current companies
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Zagat sells content to consumers and corporations and has limited growth in terms advertising and promotion. On the other hand, Yelp is a free review site that sells local advertisements wherever businesses exist and to provide free content funded by these sales. In terms of web strategy, Zagat transitioned slowly to the online and mobile platforms. Zagat’s homepage is streamlined with minimal number of search boxes and links available immediately. The company also had few online offerings with a majority of its reviews being that of restaurants. Yelp’s homepage was much busier and less streamlined with most of its content being available immediately and lists of popular businesses. The company’s online offerings consisted of 25% being restaurants, 25% from shopping and 10% coming from other businesses. Yelp’s mobile app already consisted of check in options as opposed to that of Zagat. 3. Zagat’s content was well suited for web and mobile digital platforms because they were the leader in user generated content, providing detailed descriptions of companies and incorporating quotations and comments about services and businesses. Zagat also allows for more concise and clearer impressions of businesses that are aggregated and scored accordingly which allows for unbiased and accurate descriptions and ratings as opposed to its main competitor Yelp.

4. I believe that Zagat using a pay wall was not a good strategy. Due to the fact that there were

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