A Cartel Turns Legit

Those of you who asked about the relationship between Economics, the law, and Marketing, will find this New York Times article appealing. DeBeers, one of the largest cartels, began a shift in the late 1990s from a cartel to a marketing cooperative. The firm argued that the value of its brand, which will talk about later in the course, exceeded its sales revenue. In other words, DeBeers could make more money as a label for quality diamonds than engaging in the process of mining and selling diamonds.

In its effort to become a marketing firm, the company has been settling various lawsuits filed by the US government. These suits involved various violations of the Sherman antitrust Act.

Oh Canada & Many Americans

Folio, a trade journal that covers the magazine industry, features three stories about the magazine market in Canada. The articles are posted here:

• Canada 1


• Canada 2


• Canada 3

As you read these stories, you should be thinking about chapters 2 through 4 from your text book. What strategy are Canadian publishers using to compete against the titles from the lower 48? To answer the strategy element, think about the 5 Ps.

Communication used to be intensely localized. With the advances in technology during the last 50 years, the United States successfully exports Levis, Marlboros, Hollywood, and now Information. What effect does that have on other countries such as Canada?

If Time, Sports Illustrated, and People sell strongly in Saskatchewan, then will those titles appear in England? Why or why not?

George in a very large bag

Friday's Wall Street Journal carried two stories that develop at the intersection of haute couture and marketing. In the first article, which appears here, Wal-Mart's private label, George, is not meeting industry expectations. In Marketing, many professionals examine the congruence, or fit, between a brand and a product. Wal-Mart appears to have congruence issues. Do consumers think that Wal-Mart offers affordable, trendy clothes?

Wal-Mart could be taking on H-M, a European retailer that has successfully exported its model of ever-changing fashions geared to families. George, which was a European label, may not translate as well. Also, George just may not appeal to Wal-Mart's rural demographics? After all, H-M has stayed primarily on the East Coast and IKEA, another European retailer, has opened two stores outside of the coasts.

In the second article, which appears here, bags are the next women's THING to be surprised along with homes and SUVs. Do these bags match women's lifestyle, or do they enable women's lifestyle? A subtle question, but with different answer for managers at Coach, L.L. Bean, and Gucci.

Perhaps designers saw how women used backpacks in college. Backpacks are not the most feminine article, and I doubt many would pay over $400 for it. An all-leather bag from Coach with roughly the same volume is a different matter.