Monday, April 30, 2007

A love/hate thing

OK, my Blog is back online. I keep going back in forth as to whether its worth a bit of my privacy to have a (small) platform to broadcast my thoughts into the world. Today, I'm in full disclosure mode, so here I am. A couple of new things are going on in my life; I finally got an official offer of a summer internship, so it looks like I'll be spending July and August soaking up the sun in the Bay Area. In the meantime, I need to find a place to live and get a decent car for when I'm there. It'll come together though. My birthday was yesterday, but I completely forgot because I was so caught up in a big homework assignment. However, my fiance and a few friends reminded me, which felt really nice. Wednesday I take off for Austin. I'm spending five days competiting in a business plan competition at the University of Texas. My team is grossly underprepared, but it'll be fun to see a new city and party a bit. For now, it's back to the books.

Branding in the Long Tail

I've started reading The Long Tail, a breathless account of how some products and media are moving from a 'blockbuster' model towards 'the long tail', which could be loosely defined as a large collection of fragmented markets which collectively represent huge markets. Examples include iTunes, where even the most obscure song can find a buyer, and, which offers an endless selection in comparison to the limited 'hits' lining the shelves of even the largest retailer.

However, we're also in a period where branding is becoming ever more important in attracting consumers. So, how does one brand a product that resides in the long tail? Is a single superbrand like Nike sufficient or should brands be individually targeted towards smaller niches? Perhaps marketing will move to something like the consumer products model, where parent brands like Kellogg's host a variety of sub-brands, like Corn Flakes, Special K, and Smart Start. If that's the case, then what is the value of the parent brand? Books and music are a great example; do you really buy a book based upon the brand of the publisher? Perhaps that's the magic of Oprah, through her book club, she's extended her brand as an umbrella that incorporates a variety of 'long tail' books.

The internet is a double edged sword. It provides massive amounts of information and choice, but people still need a way to navigate through the clutter. Perhaps this will shift the balance of power from advertisers to taste makers, those whose recommendations make a thousand little blockbusters amongst the millions of cultural tribes and social networks that dwell in the long tail.

The joy of SonicCare and thoughts on NoLogo

Totally random: over my spring break I had some dental work done and so I'm trying to take better care of my teeth. Every dentist on Earth seems to endorse the SoniCare toothbrush, so I picked one up for $70. Then I discovered that the battery powered SoniCare Xtreme is only $30. In a side by side comparison, they have identical performance. Both are great, but the Xtreme is definitely a deal.

Currently I'm reading the book NoLogo by Naomi Klein. I've resisted reading it for a long time, as I thought it would be a typical leftist rant against the big corporations that sell me nice toothbrushes. However, I saw Naomi on a Frontline episode on marketing titled The Persuaders( and she came across as articulate and thoughtful. So, I jumped in.

The book is really interesting. Her basic argument is that during the 1990's, businesses decided to outsource their production to developing nations and use the savings on massive marketing campaigns to convince shoppers to pay premium prices for otherwise generic goods like lattes, shoes, and clothing. This was in response to the commodification of many products and the split of consumers into two camps; value shoppers (WalMart et al) and luxury shoppers ($200 Nikes and Louis Vitton bags). However, the loss of jobs to outsourcing and exploitative labor practices led to a backlash against the brand images company's were so carefully crafting (Nike, Kathy Lee Gifford, Levi's).

The book was first published in 2000, and a few things have happened since then. First, brands found that they were especially vulnerable to the exposure of their less admirable practices, such as the use of child and prison labor, forced overtime, and the payment sub-poverty wages. This ushered in the era of corporate social responsibility reporting and efforts to at least maintain the appearance of ethical practices. Second, some innovative brands such as American Apparel, Harley Davidson, and Toyota are now using their American manufacturing prescience as a point of differentiation against outsourcing competitors (most clothing are now made in China and GM shifted substantial production from Detroit to Mexico and beyond). However, the trend toward 'everyday low prices' and 'mass luxury' has continued, if not accelerated.

What hasn't occurred is any sort of public awareness of the gaping chasm in income disparity as the middle class has been eroded and CEO and shareholder profits have reached record highs. I see this as an extension of the American 'bootstrap' fantasy that ignores rigid class barriers and perpetuates the myth that cutting taxes on the top 0.1% of earners is good because someday we'll all be in the top tax bracket. The truth is that the class you are born into will largely determine the class you spend your life in. There are the odd exceptions (I consider myself to have grown up in the lower-middle/lower class, but now go to Oxford). However, the general rule is that if your born into the working poor, grow up surrounded by poverty, and attend a hellishly neglected public school, you're probably going to spend your life in a cycle of poverty.

One thing I found interesting about the Virginia Tech shooting was that the main complaint of the perpetrator, psycho as he was, was class disparities. This hasn't exactly become of topic of discussion, nor has America's entrenched phobia of even the most pragmatic gun controls.

As for me, I've always been hyper-aware of class distinctions and have struggled to leap the chasm into the 'haves' category, as I believe it will continue to become more and more difficult to make that transition in future generations. As for corporate America, I'm a bit ambivalent. As a business student, I've been taught the efficient market theory that resources should be directed to their most efficient uses so as to maximize total societal gain. If the Chinese can make our t-shirts cheaper, both the Chinese gain from new jobs and American consumers gain for lower prices. However, it's hard to see how, barring basic global environmental and labor standards, this will result in anything but a protracted race to the bottom.

This is why I support the WTO. Only an organization like the WTO can broker global standards on environmental and labor issues and prevent the wholesale debasement of people's quality of life in the name of free market capitalism devoid of all social responsibility. I think we'll gradually get there as nations like China develop a middle class that becomes more demanding, in the same way that Americans rebelled against sweatshop and child labor in the 19th century. The question is when.

What's on my iPod

First of all, I must say that the iPod Nano sucks. The crappy decoder skips on virtually all of my .mp3 files, so I'm stuck with iTunes proprietary .aac format. This seems like a crass attempt to lock users into the iTunes store, even while Apple simultaneously promotes their deal with EMI (home of the Beattles catalog) to provide open format .mp3s at $1.29 per song that can be played on multiple portable players. Lame.

That being said, here's my latest 25 songs. I'm rapidly becoming a fan of Midnight Movies. Very melodic and ethereal. They have a new release coming out in late April. I've heard some of it on KCRW, and it sounds fantastic.

Yes, that's Avril Lavigne. I'm a sucker for dumb girly pop.