An excerpt from
Aji Notes, Volume 3, written by Toby Hecht.
Aji Notes, Volume 3
(pages 202-204)
What Is a Marginal Utility?
When businesspeople use Aji, they design their OPNS to have marginal utilities that trigger assessments of value.
The concept “marginal utility” is used two different ways.
#1 – Sometimes it means the difference in utility, or enjoyment, produced by an additional unit of consumption.
When we are thirsty, for example, the first swallow of water is terrific.
The second and third swallows may be almost as good.
Eventually, swallows are not as satisfying, enjoyable or helpful. They lose their marginal utility.
#2 – Sometimes marginal utility means that part of an offer, practice, narrative or strategy, or a good or service, increases its usefulness, pleasure or satisfaction so that it is superior to a competitive one.
If Buyers are concerned about gas mileage and competitors’ automobiles average 20 mpg, the new car that averages 23 mpg has a 3 mpg marginal utility.
* The second meaning is used in Aji most of the time.
Marginal utilities are innovations. They drive customers, employers, employees, colleagues and vendors to buy, and competitors to compete, in four different categories of innovation:
Minor Innovations
Please people but customers and competitors will not respond.
Substantial Innovations
Customers and competitors will react as it suits them.
Major Innovations
Customers and competitors will react immediately.
Radical Innovations
Customers and competitors will have difficulty understanding the descriptions, meanings, relevance, value and purposes of the new OPNS.
The three fundamental competitive advantages businesspeople produce with Aji
… to produce scarcity, monopolies and auctions are being:
#1 – First to market
#2 – The best designed,
… the most important, useful and worthwhile to buy and use
#3 – The most complex and powerful combination of new tools and technologies
In your Aji IFPs, work to design OPNS with marginal utilities that are substantial and major to produce and maintain competitive advantages.