Zagat Case Study

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Background:
Founded by Nina and Tim Zagat, Zagat is a firm that collects and compares the ratings and reviews of restaurants, hotels, nightlife, movies, shopping and much more categories by individuals. Zagat believes that opinions of a number of consumers is much more efficient then the reviewer of few critics. In 1979, Nina and Tim Zagat started the idea among their friends collecting reviews and surveys; started at reviewing 100 top restaurants that were distributed as printed copies. Later with the rise of technology such as Internet, e-commerce and mobile application, Zagat started struggling to find the appropriate business model. Fearing competitors in the new technology world and falling behind the shadows of new opponents such as Yelp Zagat finally collaborated with Google and became free to users. Zagat integrated their mobile, and website with Google maps and search engines. Zagat e-business model is content provider where people review places and deliver this material to others. The way Zagat makes money is through an affiliate revenue model, since it connects people to organizations. They have two types of e-commerce, which are Consumer-to-Consumer (C2C) and Business-to-Consumer (B2C). C2C since customers are the users that make reviews to suggest to other customers, and B2C since Zagat a business is communicating with customers. Zagat’s value proposition is minimizing search cost for good places because they are able to provide bias free and accurate reviews for users.

Zagat's problems before being purchased by google:
Struggle to find a business model that stayed true to the company origin
Zagat decision to place all their content behind a pay wall
Relying on Zagat brand name to entice customer
After being purch...

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...tising revenue model in which the company will provide a forum for advertisements and receives fees from the companies that advertise for them.
• As well as, Yelp strategy can be used by selling local advertisements wherever businesses exist and provide free content funded by the sales.
• Although using Zagat on Google is free, Zagat is been charging $10 a year to use the app on iPhone, and after a trial of 6 months it will charge $25 to see reviews on devices running Android, so Zagat need to offer a free app to attract as more consumers as they can.
• Zagat front page on Google need to be managed in a way to offer more content immediately by listing the most popular retail outlets, restaurants, and many other categories all free to the user, and broaden their categories. As well as, the reviews must exist for almost any location the consumers’ think of.

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