Big Red Horseshoe - Vanderbilt Owen MBA Students on Business Strategy

Music Branding and (Not) Selling Out

(I'm lifting this entire post from, well, myself. I posted this earlier today at my other blog, Coolfer.com.)

Good thing there's no longer such thing as selling out, because bands and labels are getting cozy with consumer product corporations. Yesterday I ran across three items that drove home that point. New business models and new types of promotion are in full bloom in 2007. Starting with the most interesting...

- Levi's Jeans has founded a label called Levity with the help of a music marketing company. (The entity is aimed at Australia and New Zealand, but the Internet allows the rest of us to listen in.) The first band to come from the relationship is New Zealand rock band Cut Off Your Hands. Levi's paid for the recording and of the new EP -- which was produced by former Suede guitarist Bernard Butler -- and gets to sponge off the band's indie cool in its promotional efforts. In return, Cut Off Your Hands gets a great deal of exposure and gets to keep its masters as well as some merchandise. Bonus: The band sounds pretty good. (Boudist, via Information Leafblower. More reading at 3D World Online.)

- Interscope Records is working with Drinks Americas Holdings Ltd. to launch branded drinks -- with and without alcohol -- tied to Interscope artists. (Drinks Business Review)

- UK pop ground Girls Aloud and its label, Universal Music Group's Polydor Records, have a broad branding deal with electronics giant Samsung. The group will do things such as endorse Samsung products and make appearances at Samsung events. In return, Girls Aloud get a heap of attention and a few perks. Samsung will make the group's music available at its Fun Club website. (Billboard.biz)

A Painting Must Be Worth At Least A Few Thousand Words

On the subway this morning I ran across this New York Times article about Lockheed Martin's marketing strategy at the Paris Air Show. The company commissioned nine artists to show the  F-35 Lightning fighter jet in a variety of imaginary settings. A coalition of nine countries have invested hundreds of billions of dollars in developing the fighter.

Why paint a rosy picture? Good marketing and smart political gamesmanship, perhaps. The countires involved want to put the $75 million jet in the best possible light. When the U.S. alone wants to buy almost 2,500 of them, would Lockheed seek support through cold sketches, actual photos or inspirational paintings? Easy choice. Get Thomas Kinkade on the project and U.S. taxpayers would probably approve around 5,000 F-35s.

Best Buy Tries Out "Results Only" Working Environment

Intriguing article at BusinessWeek.com about the experiment at Best Buy's Minneapolis corporate offices. The company is trying out a "results only working environment" (ROWE) that allows workers to work...well...wherever they want.

"Hence workers pulling into the company's amenity-packed headquarters at 2 p.m. aren't considered late. Nor are those pulling out at 2 p.m. seen as leaving early. There are no schedules. No mandatory meetings. No impression-management hustles. Work is no longer a place where you go, but something you do. It's O.K. to take conference calls while you hunt, collaborate from your lakeside cabin, or log on after dinner so you can spend the afternoon with your kid.
...arguably no big business has smashed the clock quite so resolutely as Best Buy. The official policy for this post-face-time, location-agnostic way of working is that people are free to work wherever they want, whenever they want, as long as they get their work done. 'This is like TiVo for your work,' says the program's co-founder, Jody Thompson. By the end of 2007, all 4,000 staffers working at corporate will be on ROWE. Starting in February, the new work environment will become an official part of Best Buy's recruiting pitch as well as its orientation for new hires. And the company plans to take its clockless campaign to its stores--a high-stakes challenge that no company has tried before in a retail environment."

The company's CEO has set up a division called CultureRX to help other companies adapt ROWE. The amazing thing about this is that it came from the bottom up -- the CEO found out about Best Buy's ROWE program two years after it began!

A New CNN.com

CNN.com is getting a makeover. The beta site can be accessed here. This blog explains the new features and the new systems CNN is building. The site is much cleaner than the old site. Less cluttered. Videos and podcasts can be easily found from the home page.

The site will better integrate clips from CNN broadcasts. It will contain more up-to-date news faster than before. I think it's a good strategy to put up breaking news faster. There are a lot of options for up-to-the-second news: Blog readers, competing websites. Faster is better.

Possible negative: The type sizes are quite smaller. That's no problem for younger readers, but older readers may not like it.

Another negative: I like how the main page of the old CNN.com has two or three headlines under each category (health, world, sports, etc). The new site has category links at the top of the page. Viewing the top headlines requires a click. Yeah, it's only one click, but with websites, the fewer clicks the better.

Cisco's M&A

I thought News.com's interview with Cisco's head of business development, Ned Hooper, made for pretty good reading.

"It might be a little soon to talk about legacies. But we are in a dynamic time in the market. It's a high-growth stage of the economic cycle. There are massive technology and business model changes occurring. And I'm looking for ways to take advantage of those changes to help Cisco achieve the high end of our target, which is 15 percent growth yearly. And my hope is to continue this growth as the company gets increasingly larger."

For extra reading, here's a good article on Cisco's M&A at U.S. News & World Report.

The New Ask.com

Notice the new Ask.com site (and requisite advertising) lately? I have. Seems pictures of billboards are everywhere. Banner ads are everywhere. Ask.com is taking on Google AdSense and other competitors, say the articles. The company has started a $100 million campaign in an effort to get out of the search engine basement. The competition is good for us consumers and brings fresh ideas and innovation.

The new product here is Ask3D, a type of search that offers results of various media in hopes of reducing the amount of time people spend searching. There are three panels: One that allows the user to redefine or alter the query, one with the query results and the third with non-text media such as video. Other search engines have different tabs/pages for different media (text, video, map, etc). Ask.com is putting them all in one place.

Is it good enough for me to give up Google? As an experiment, I typed in "Vanderbilt University." The results were quite varied. In the left column allowed me to narrow the search and offered links to different schools within Vanderbilt. The center column had the standard text results -- with sponsored text ads at the top. The right column was what I found to be most interesting. The top had thumbnails of images. Below that was an excerpt, and full link, to the Wikipedia entry for Vanderbilt University. Below that were news results (one mentioned Vanderbilt) and related blog entries.

All in all, I think the new Ask.com is good enough to get a few of my visits. Google Maps is far better than Ask's map, though, and that's important to me. And I tend to search with the Google toolbar in my Firefox browser. Rarely do I go to the Google home page to search. I suppose I'll have to try out the Ask.com toolbar.

One thing is for sure: Jeeves is gone. That's wonderful for Ask.com. Jeeves was a terrible mascot around which to build a technology company. Funny, though, that Ask.com is the first result in a Google search for "Jeeves."

Anheuser and Jimmy Buffet and Bidders

Hidden down on page A13 of yesterday's Wall Street Journal was a small article about Anheuser-Busch's decision to distribute Jimmy Buffet's Margaritaville Tequila in Massachusetts.

Coke gets a ton of press when it goes after Vitamin Water -- and with good reason -- and I was just as interested by this small development. Both demonstrate a shift in product mix due to shifts in the public's tastes. Tequila has been growing in popularity while beer has been flat.

Also mentioned in the article was something I did not know, that the Landshark brand of beer that is sold in Margaritaville restaurants is a joint venture between Anheiser and Buffet.

Today there was news that private equity groups and rivals are interested in acquiring Anheuser.

More Ads?

A New York Times article (found via Marginal Revolution) about BookExpo America mentioned a possible bookselling strategy -- or in some cases a non-selling strategy: Giving away free copies with ads interspersed throughout the pages. This idea comes from Chris Anderson, the author of "The Long Tail" and new spokesman for a digital era. (Anderson discusses the article and his idea at his blog.)

Isn't there anything, anywhere that can remain ad-free? Please? Television shows have ads (product placement). Rap lyrics have ads (product placement). Free music downloads will soon come with ads (if SpiralFrog can get off the ground). Streaming video has ads. Practically every concert tour has advertising of some sort. Movies have ads (again, product placement).

The book industry is facing a great deal of technological change, and not everybody is in agreement on what is best for authors and readers. Tina Brown, former editor of The New Yorker and Vanity Fair and the author of "Diana, Princess Wales," had this to say about giving away book online:

"Giving an author’s book away for nothing on the Web as a way to market books seems a mirage to me. All it does is feed the hungry angles of journalists and bloggers who plunder it without any of the author’s context or nuance and makes the reader feel there is nothing new to learn from the genuine article when it finally limps on its weary way to a book shop."

As long as it doesn't have ads...

Wal-Mart Strategies

As an MBA student, I'm practically legally obligated to discuss Wal-Mart from time to time. No other company is so studied, so criticized, so much in the public eye. Besides, it's a fascinating company and should be watched by anybody who keeps an eye on business. The news of the week comes from Wal-Mart's annual shareholders meeting on June 1st. (Read press release.)

The company's new strategy is to "improve returns, productivity and sales within its U.S. stores." Part of the plan is to cut back the growth of its U.S. supercenters. In the next fiscal year, Wal-Mart will open 190 and 200 supercenters and then 170 a year in each of the next three years. The company is in the second year of a three-year plan to improve store returns (improved labor productivity, customer segmentation approaches). In addition, store locations will be chosen to reduce cannibalization of existing store business.

And then there's the $15 billion share repurchase program. That joins a previously announced 31% increase in its dividend payout. Shareholders were obviously happy to hear about the repurchase: Wal-Mart's stock jumped 4% yesterday. Investors are looking for a better story out of Wal-Mart. Look at the five-year trend at Google Finance -- after peaking in 2004, the share price has done little and has jumped around between roughly $44 and $50. Yesterday is closed at $49.47.

The news shows Wal-Mart is becoming concerned about smart growth and not just growth for growth's sake. Again, given the jump in the share price, investors feel the same way. The company's slower growth will lower its capital expense growth rate. That money will go toward the share repurchase program.

There was another recent announcement about a Wal-Mart, this one having more to do with Dell's strategy: Dell is going to begin selling two different types of PCs at Wal-Mart stores.