Dr. Isaac Mostovicz, the principal of Isaac Mostovicz LTD, has one mission, helping businesses to become more profitable. He argues that any business can command higher prices in the same way luxury does.
A seasoned expert in the diamond industry, Isaac delves in this interview into his extensive career journey, from his beginnings in the diamond business to his academic career and finally, into his consultancy.
With over 35 years of experience, Isaac shares his major milestones, his approach to understanding consumer needs, and his perspective on competition in the luxury sector. He also discusses the importance of authenticity in and understanding the customer, the right way to compete, and the challenges of ensuring marketing success in diverse cultural contexts.
Join us as we explore the wisdom and experiences of a true industry veteran who has navigated the complexities of the diamond market and the nuances of luxury marketing with remarkable insight and success.
The Career Journey
We wanted to learn about Isaac Mostovicz’s career journey in the diamond business, so we asked him, “Can you share the beginnings of your career in the diamond business and your journey?”
“At the outset of my career in the diamond business in 1980, I embarked on a journey that spanned approximately 35 years, marked by several key milestones and challenges. Our business already enjoyed the distinguished status of being sightholders, a privilege reserved for a select few in the industry. However, this recognition didn’t help much since the industry went into crisis in that period.
I realized that the industry’s traditional approach of merely manufacturing and selling stock without a deep understanding of the end clients’ needs was unsustainable. We pivoted towards a more client-centric model, identifying specific needs, and tailoring our diamond offerings to suit different market niches. This strategy diverged from standard manufacturing practices and initially faced skepticism from my father-in-law, who was overseeing operations at the time. Nevertheless, my conviction in understanding our niche and the client’s unique requirements paid off, resulting in a high success rate in meeting their demands and revitalizing our business.”
Celebrated Career Milestones
Interested in the highlights of Isaac Mostovicz’s career in the diamond industry, we asked him, “Mention some of your major milestones throughout your career journey.”
Isaac Mostovicz replied, “Throughout my career journey, I achieved several major milestones that significantly shaped my success in the diamond industry. In 1985, I recognized the potential in the Japanese market and established my office there. This expansion led to a remarkable collaboration with a client who approached us with a request to manufacture a specific diamond. Despite initial skepticism from our second and third-generation polishers and foremen, we humbly accepted the opportunity to learn from the client. This decision proved fruitful, as we became the sole company outside of the client’s operation authorized to manufacture and distribute these unique diamonds.
Another significant milestone was the introduction of a new diamond cut called “Hearts and Arrows” which emerged from Japanese researchers’ innovative approach to considering diamonds in three dimensions. Despite the primitive tools at our disposal, the demand for this new cut was exceptionally high among professionals. I quickly became the leader in this cut, as we managed to decipher the precise method for its execution. This achievement led to significantly higher prices and a rapid depletion of my stock.
These milestones underscored my longstanding motto: always prioritize understanding your client and their niche. This philosophy has been a guiding principle in my career, enabling me to navigate challenges and seize opportunities in the dynamic diamond industry.”
Understanding Consumer Needs
To understand Isaac Mostovicz’s perspective on consumer needs, we asked, “What are your views on valuing consumer needs?”
“My views on valuing consumer needs are deeply rooted in the understanding that a one-size-fits-all approach does not work in today’s diverse market landscape. Just as men and women have different preferences for shoes in terms of sizes, colors, and styles, clients in any industry have unique needs that must be catered to. This realization was pivotal in my career, as it highlighted that each market has its niches, and success lies in understanding and addressing those specific needs.” he said.
Isaac Mostovicz further added, “When I transitioned to working in the United States, I applied this principle by focusing on the needs of American jewelers. Instead of selling diamonds directly, I shifted my approach to catering to the jewelers themselves. By introducing them to goods that were considered non-standard or dead stock in the market, I demonstrated how these diamonds could still hold value and be sold. This approach not only solved for us a significant problem in the industry, where billions of dollars worth of diamonds were lying unsellable in vaults but also led to a surge in demand from the jewelers who quickly saw the value in these offerings.”
End-User Focus in Diamond Business
Curious about how Isaac Mostovicz’s approach evolved with a focus on end-users, we posed the question, “How did your approach to the diamond business change when you began considering the perspective of end-users?”
Isaac then replied, “My approach to the diamond business underwent a significant shift when I began considering the perspective of end-users, the customers who are ready to spend thousands or even tens of thousands of dollars on a diamond. I started to delve into understanding how these customers make their selections and determine which diamond to choose and at what price. This was a crucial shift because, to the untrained eye, two diamonds can appear identical, even though one may be worth $1,000 and the other $10,000. As a professional, I need a loupe and tweezers to discern the differences between diamonds, so I wondered how customers make these decisions and ensure they are making the right choice.
To gain insights into this, I engaged with colleagues, friends, and even the directors of De Beers, who were at that time the primary promoters of diamonds. I challenged them, questioning their promotion strategies. While De Beers promoted diamonds, customers didn’t directly purchase from them; they bought from De Beers’ clients or other sources. Despite this indirect relationship, De Beers’ influence was significant, as they controlled a considerable portion of the market, albeit less than 50% at the time. This dynamic raised questions about the customers’ decision-making processes and the role of marketing in shaping their perceptions and choices. This exploration into the perspective of end-users marked a pivotal change in my approach to the diamond business, as it highlighted the importance of understanding the customer’s journey and decision-making process in the complex world of diamond purchasing.”
Ph.D. Studies and Luxury Marketing Insights
Seeking insight into Isaac Mostovicz’s academic journey, we inquired, “How did your Ph.D. studies shape your understanding of luxury marketing and customer needs?”
Isaac Mostovicz said, “During my Ph.D. studies, my focus was on exploring the psyche of the diamond customer: understanding who they are, what they desire, how to fulfill their needs, and the timing of their purchases, as buying diamonds isn’t as frequent or predictable as purchasing everyday items like bread. Over four years, I delved into these questions, aiming to grasp the essence of luxury and its perception in the market. This exploration led me to become a luxury expert, viewing it as a formula of marketing that, once understood, can be applied to any product or service to shape its appeal to consumers.”
He then added, “During my Ph.D., I had the opportunity to work with a remarkable professor, whose career highlight was his success with ICI Fertilizers, which was on the brink of collapse. The company had been selling commodities, focusing solely on price, and was on the verge of bankruptcy. However, my professor’s approach, which emphasized proper marketing and understanding customer segmentation and needs, transformed ICI Fertilizers into the most successful company within the ICI group, achieving remarkable profitability and market share. This story illustrates the power of marketing and understanding customer needs in driving business success.
He inspired me to approach my Ph.D. with a deeper level of inquiry, which has been invaluable throughout my career. Two or three particular cases stand out, such as the transformation of dead stock into highly profitable inventory. Another notable instance was when we launched a campaign in the United States, and a client interpreted it as an attempt to clear out stock. Instead, I offered to sell it to them at a 10% premium, which we successfully did.”
Major Achievements
Exploring Isaac Mostovicz’s significant accomplishments, we questioned, “Could you describe a major achievement in your career that demonstrated your deep understanding of the market and its dynamics?”
“Additionally, towards the end of the 1990s, as the millennium approached, De Beers aimed to market the De Beers Millennium Diamond Special Edition. Despite its less marketable name, this campaign was significant.
Together with other nine clients, which later expanded to 14, we were selected to market the De Beers Millennium Diamond Special Edition. While some of my colleagues may have made a modest profit, we were the only ones to significantly profit from this opportunity. We more than doubled our investment, particularly with certain special diamonds that we sold at a much higher profit margin. This success was due to my understanding of the market and its dynamics.” replied Isaac Mostovicz.
Pivotal Realization: Transitioning from Diamonds to Knowledge
We further asked, “How did a pivotal realization lead to your transition from the diamond business to focusing on selling knowledge, and what impact has this had on your industry perspective and professional journey?”
Isaac Mostovicz stated, “In 2008, I relocated to Israel, where it took some time to transition out of the diamond business and sell my diamond company. Despite considering re-entering the industry later on, a colleague made a profound observation: “You’re not selling diamonds; you’re selling knowledge.” He was right. I used diamonds as a means to impart knowledge to clients, enabling them to achieve profitability and stability. Luxury is known to be the least affected goods in economic downturns – demand for luxury persists. I was eager to learn how to sell my knowledge effectively, but despite his promise, my colleague never fulfilled his promise. I had to find out the hard way to repack and deliver my knowledge.
Entrepreneurial Influence on Research
Our next question was, “How did your entrepreneurial background shape your approach to research and understanding customer needs during your academic studies?”
Isaac Mostovicz mentioned, “My move from entrepreneurship to academia and the corporate world had a significant impact on my perspective on business education and practical experience. In the diamond business, entrepreneurship is paramount, with business owners being the backbone of the industry. This entrepreneurial spirit permeates the entire industry, where decisions are made based on opportunity rather than a pre-set budget.
However, my experience shifted when I pursued my MBA studies, exposing me to the corporate world for the first time. This transition was jarring, as I encountered the need for planned budgets, structured reporting, stock price monitoring, and media communication, for example, which contrasted with the freedom and autonomy I enjoyed as an entrepreneur. It took time for me to adapt, and thereafter I learned to question the relevance of theoretical knowledge without practical experience, which, in my opinion, the academic world suffers from.”
Practical Experience in Business Education
Delving into Isaac Mostovicz’s career shift, we asked, “How did your transition from entrepreneurship to academia and the corporate world influence your views on the importance of practical experience in business education?”
“In my entrepreneurial ventures, I had a strong relationship with my employees, knowing how to promote, support, and motivate them effectively. This approach was natural to us but differed significantly from the structured approaches I encountered during my MBA studies. When I began my Ph.D., entrepreneurship became a focal point, but the instruction often fell short, consisting mostly of theoretical discussions without practical application.
I emphasized the importance of hands-on experience, such as visiting clients and working behind the counter to understand retail at the ground level. During my Ph.D. studies in luxury marketing, I found that the core principles remained the same: understanding the customer and meeting their needs, whether you are selling a product, managing a team, or consulting. It is not enough to teach, as there is no substitute for hands-on experience. This realization underscored the importance of respecting and accommodating customer choices in my research.” Isaac Mostovicz continued.
Transition from Academia to Marketing Consultancy
Our next question was, “How did your experiences during and after your Ph.D. defense influence your decision to transition from academia to a career in consultancy?
Isaac Mostovicz replied, “My Ph.D. defense took place on a Monday at noon, immediately after, my supervisor’s husband invited me to meet him on Wednesday, where he introduced me to very important research he and his wife conducted. He wanted to see whether my research could shed light on their research as well.
It took me a few days to prove to him the relevance of my findings to their study, I was invited to continue my post-doc career, focusing on governance, leadership, CSR (Corporate Social Responsibility), and other issues relevant to the corporate suite Despite working part-time, I published more articles than a full-time researcher and attended several conferences every year.
However, because of my view that academia is disconnected from real life, I decided to focus on helping with management, governance, leadership, and marketing issues. Now, I concentrate solely on marketing, consulting with CEOs on leadership or governance, and having a business of my own.”
Consultancy Approach with CEOs and Top Management
We further asked, “How does your approach to consultancy with CEOs and top management differ from traditional consulting methods, and how do you ensure that your clients see tangible results from your collaboration?”
Isaac Mostovicz mentioned, “My approach to consultancy with CEOs and top management differs from traditional consulting methods in several ways. Firstly, I focus on genuinely helping my clients improve their performance, rather than solely concentrating on making money or spreading knowledge. I aim for my clients to achieve real success and witness tangible outcomes from our collaboration.
Secondly, I often consult with CEOs and top management because they are the decision-makers, and I believe there is more potential for financial gain with their offers. Many initially believe that fierce competition limits their ability to make more money, but I frequently discover strategies for more effective competition and profit enhancement. When I identify these opportunities, it is clear that both my clients and I stand to benefit.
Lastly, I am willing to take risks and base my fees on the extra profit my clients make as a result of our collaboration. This approach ensures that I am aligned with their success and motivates me to deliver impactful results. By doing so, I ensure that my clients see tangible results from our collaboration, as my compensation is directly tied to their success.”
Competition, we asked Isaac Mostovicz
Our next question was, “How should a company compete, in your opinion?
Isaac Mostovicz said, “A company should know how to successfully compete. Running away from competition is worthless. Fifteen years ago, Kim and Mauborgne, proposed “the Blue Ocean Strategy”, which suggests businesses should seek uncontested market spaces rather than competing in saturated markets. This is an interesting theory, which, unfortunately, has no practical value. Examining the companies that the authors used as an example reveals that these companies competed head-on. They succeeded because they chose which market to compete in. With over 50 years of experience in karate, I understand the importance of competition. It’s not about avoiding competition but choosing battles wisely.”
“In my experience, finding a niche where no one else operates is not enough. Once a successful niche is identified, competitors will likely follow. Often, the third company to enter a market becomes the leader, not the first innovator. This dynamism highlights the importance of strategic adaptation in a competitive environment,” he further added.
Differentiation in the Competitive Luxury Market
To understand Isaac Mostovicz’s perspective on competition in the luxury sector, we asked, “Can you elaborate on how luxury brands differentiate themselves in a competitive market, and how do you advise clients to approach competition in the luxury sector?”
He replied, “In the competitive luxury market, brands differentiate themselves not by shying away from competition but by selecting their battles wisely. Luxury brands offer products similar to non-luxury goods, but their message is different. Instead of selling a product, they use it as a vehicle for delivering a much deeper message and expressing their attitude. These products help the consumer tell ”who I am”, enhancing the consumer’s self-esteem.
Luxury marketing follows a very exact formula. It is based on the true needs of the users who must have these offers. It is never about “want’ but “need”. Once we realize the role of luxury in our lives, we’ll see that luxury covers 95% of our efforts and attention.”
I advise clients to embrace competition and be happy to compete daily. Those who have studied my formula for luxury marketing see improvement every day, even if they haven’t perfected it yet. It takes time to refine one’s approach. Learning from failures and remaining resilient in the face of market shifts is crucial. During the 2008 market crash, luxury sales remained strong, showcasing the industry’s ability to withstand economic downturns.
Leveraging Unique Qualities in Competition and Luxury
We further asked, “How do you help clients understand and leverage their unique qualities in approaching competition and luxury? Can you provide an example of how authenticity has made a difference in your work or the industry?”
“Marketing is respecting the free will that the consumer has. To help clients understand and leverage their unique qualities in approaching competition and luxury, I provide them with a menu of options rather than dictating specific actions. This approach recognizes that each individual is unique, with different abilities, limitations, and circumstances. It’s essential to compete based on your strengths, not someone else’s. Understanding your unique qualities is crucial, and I guide clients on this journey, emphasizing the importance of authenticity. Be yourself! It is not the product but you who speak through the product.
I encourage people not to copy others but to discover and embrace their authentic selves. This process is challenging but ultimately rewarding. When you stay true to yourself, you’ll see the results, such as positive feedback from those around you.
In terms of consumer behavior, it’s interesting to observe how different generations prioritize their spending. In Japan, the older generation used to prioritize buying a home, but with skyrocketing real estate prices, younger generations are now more inclined to rent houses and spend their disposable income on other luxuries, such as fancy cars. On the other hand, older, successful CEOs might drive old cars or use public transportation because owning a car is a luxury they can’t justify. They may not own a house, but they live in the city and drive a nice car.” Isaac Mostovicz said.
Marketing Success in Diverse Cultural Contexts
Seeking insights into Isaac Mostovicz’s approach to marketing in diverse cultural contexts, we inquired, “How do you ensure marketing success in diverse markets with different cultural values? Can you share an example where authenticity was pivotal in your marketing approach?”
Isaac Mostovicz concluded, “To ensure marketing success in diverse markets with different cultural values, it’s crucial to understand the fit of a product with the target audience. Cultural differences play a significant role in what works in one market versus another. For example, a marketing approach that resonates in Dubai might not necessarily work in Italy due to different cultural norms and values.
In terms of authenticity, it’s essential to be genuine rather than a copycat, regardless of who or what you might be emulating. Staying true to yourself, no matter where you are or what situation you’re in, is key. Understanding how to compete and recognizing potential threats is important, but it should never come at the cost of your authenticity.”
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