The Hub Cool News

Glaxo & Ranbaxy

GlaxoSmithKline and Ranbaxy Laboratories may be locked in a death match over generic knockoffs, but that isn’t stopping them from working together to find a cure for cancer, reports Peter Loftus in The Wall Street Journal (2/21/07). “Both friend and foe of the same company — that’s exactly right,” says Ranbaxy spokesman Charles Caprariello. The two companies are foes because Ranbaxy wants to start selling "copycat versions of blockbuster medications years before patents expire." Says Charles: "Our job is to challenge patents we feel are superfluous or not well grounded."

But they are friends because Glaxo wants to use Ranbaxy’s, low-cost "stable of scientists in India" to come up with "compounds to potentially treat infections, cancer" and other conditions. "In India they have some of the best chemists in the world," explains Glaxo ceo Jean-Pierre Garnier. But he adds: "Next to that is the generic division, whose sole purpose in life is to beat us up on patents, so we’re going to fight them."

As unlikely as this “love-hate” relationship sounds, it actually “embodies some paradoxical trends in the industry, and could signal a greater melding of branded and generic business models.” As Hussain Mooraj of AMR Research explains: "The opportunity for reinventing the relationship between branded pharmaceutical an generics companies, which has historically been very adversarial, is there," he says. The two companies actually have been working together since 2003, and Ranbaxy currently stands "to receive more than $100 million in potential milestone payments for products" they develop and Glaxo launches. ~ Tim Manners, editor

Project Apollo

By linking the media people consume to the products they actually buy, Arbitron and Nielsen believe they are bridging the gap between advertising and sales, reports Sarah McBride in The Wall Street Journal (2/27/07). “This is high definition for market research,” says Linda Dupree, evp of Arbitron, in announcing the results of Project Apollo, as the Arbitron-Nielsen joint-venture is called. Project Apollo armed some 11,000 consumers with Arbitron’s Portable People Meter, which tracks their media consumption on radio and television, as well as Nielsen’s HomeScan, which tracks their product purchases at retail.

The result is, “people exposed to several months’ worth of advertising for 13 mid-to-large brands spent five percent to eight percent more on the brands compared with spending before the ads ran. Consumers in the brands’ target demographic boosted their purchases eight percent to 12 percent.” This trial run specifically analyzed the effectiveness of a “cable-TV ad campaign for an unidentified painkiller,” and was able to pinpoint which “ads on which cable networks and at what times of the day would reach more buyers.” That type of result impresses Don Gloeckler of Procter & Gamble.

"We’re able to better deliver messages to people who are interested in the product and the category," says Don. That’s good news for Arbitron and Nielsen who "have sunk tens of millions of dollars" into Project Apollo. If they decide to continue with the test, they might enhance their methodology by "installing monitoring software on participants’ computers" (currently, participants simply fill out surveys about their online activities). They would also expand "the sample group to as many as 45,000 people." In the meantime, "Nielsen and Arbitron plan to release more Project Apollo data over the next few months in a series of papers scheduled for presentation at various conferences." ~ Tim Manners, editor

Bottle Rocket

"The traditional store does nothing to help the consumer buy intelligently and learn, other than provide a knowledgeable salesperson," says Tom Geniesse of Bottle Rocket, in a Wall Street Journal story by Dorothy J. Gaiter and John Brecher (2/23/07). Bottle Rocket is a wine shop in N.Y.C. that features “365 wines … one for every day of the year. All are lined up on the right side of the store, alphabetically by country, from Argentina to the U.S. Then, down the middle of the store, the same wines are organized around kiosks by theme. “There’s wine to have with seafood, for instance, which is then broken down into heavier and lighter fish dishes. There’s even a kiosk marked ‘Gifts,’ with subheadings including ‘Third Date.'”

Says Tom: “Wine is such a confusing but very rewarding subject. So I thought, gee, there must be a way that this complex world can be presented to folks in such a way that they can be intelligent and learn and grow confident.” Tom also provides a play area for kids, which might sound like an odd thing at a wine shop, but Tom doesn’t think so. “I think that all retail is really, on some level, a neighborhood phenomenon,” he says, “and it just seemed so logical to provide for the little people, too, so they can enjoy the experience and then their parents can enjoy their own experience.” Bottle Rocket is actually one of several wine stores taking so experiential a view.

Moore Brothers offers its customers coats because it keeps its stores at 56 degrees, the ideal temperature for storing wine. Vino 100 helps its customers feel less intimidated by offering a tightly edited selection of just 120 wines. Greene Grape keeps a record of every wine you buy, so you can find it again easily. Seventh Street Wine in Ft. Lauderdale has an Enomatic machine, where you can use a debit card to dispense one-ounce samples of any of 96 wines. And Cova, in Houston, puts its customers in "a rock star motor coach the size of a Greyhound Bus," for a tasting tour of 3-4 fine restaurants, including up to 20 wines — "an appropriate symbol of wine getting on the road to modern, clever retailing." ~ Tim Manners, editor

Belgian Selling

No free waffles to be had at the car dealerships in Brussels — Belgian waffles or any other kind. No free hot dogs, either. In fact, no free-kin’ salesmen breathing down your neck to buy a car, reports Kyle Wingfield in The Wall Street Journal (2/23/07). For an American in Brussels, steeped in the American ways of haggling at your local car dealership, shopping for wheels is just plain shocking, says Kyle. At the local Volkswagen dealership, the sales team was too busy ordering lunch to notice him and his wife. “Apparently, we were … rendered invisible upon walking inside,” he writes.

Kyle’s experience was slightly more comforting at the Toyota lot, where a “smarmy” salesman tried to “up-sell … to a larger model … This was more like it,” writes Kyle. “I felt a shot of adrenaline as I warmed up for the negotiations.” Negotiations? When Kyle made his offer, the salesman just shrugged, and gave Kyle “the kind of look you’d expect from a cashier at Wal-Mart if you tried to haggle over the price of chewing gum.” It seems that in Brussels, a standard discount is applied, and negotiations just aren’t a part of the car-buying experience. In part this is because it’s not necessarily customary for salespeople in Brussels to work on commission.

It’s also because many of the car dealerships base their businesses on bulk sales to rental car companies or corporations — not individuals. Reason is, so many ex-pats get company cars in Brussels that there’s not much margin in catering to individual consumers. Kyle finally did find the car he wanted at a Citroen dealer, but he had to make an appointment for a test-drive and then wait a week for license plates. Curiously, the salesman turned on the charm only after the sale was made, "even willing to vouchsafe his cellphone number and offer his help should anything come up." And even though Kyle never got any waffles or hot dogs, he came away impressed. "Maybe the Belgians know what they’re doing after all," he says. ~ Tim Manners, editor

Cultural Imperialism

"The poorer a country, the more likely it will listen to its own music," writes Tyler Cowen in The New York Times, and that’s bad news for the future of American pop-culture exports (2/22/07). American movies and music still do well in “countries like Sweden” and much of Europe because their cultures are relatively less hierarchical. That’s the key, because most people tend to signal their social status by the music they listen to and the movies they watch. For example: “An Indian Muslim might listen to religious Qawwali music to set himself apart from local Hindus, or a native of Calcutta might favor songs from Bengali cinema.”

That’s a problem for America’s “cultural goods” because, these days “economic growth is booming in countries where American popular culture does not dominate, namely India and China.” Brazil, Mexico, Egypt and Indonesia, too. Not only that, but also “population growth is strong in many Islamic countries, which typically prefer local music and get their news from sources like … Al Jazeera.” Not coincidentally, “‘American cultural products rely increasingly on non-American talent and international symbols and settings.” For example, the movie Babel “has a Mexican director, and is set in Morocco, Japan and Mexico, mostly with non-English dialogue.”

The good news for Americans, perhaps, is that they might become less criticized for “cultural imperialism.’ The bad news, obviously, is that the market for their cultural products is shrinking. The irony is, it’s America’s influence that’s helping to fuel this trend! As Tyler Cowen noted in his book, Creative Destruction, “the funk of James Brown helped shape the music of West Africa," for example. He observes: "Western cultural exports are as likely to refresh foreign art forms as to destroy them." And maybe most important: "Western technologies — from the metal carving knife to acrylic paint to digital filmmaking — have spurred creativity worldwide." And he concludes: "American popular culture will continue to make money, but the 21st century will bring a broad melange of influences with no clear world cultural leader." ~ Tim Manners, editor

Casa de Fado

fado

It can be sung off key, always in mournful tones, sometimes by singers who can’t really sing, in tiny Portuguese cafes where the signs say "no smoking" but there are ashtrays on every table, reports Elaine Sciolino in The New York Times (1/21/07). It’s a genre local to Lisbon, known as fado, and although it is “reviled by some as backward looking and morose” it “has been reinvented to become Portugal’s most successful cultural export.” But fado — which means “fate” — certainly is not for everyone. “Fado is about nostalgia, a sadness that is very intimate,” explains Jose Socrates, Portugal’s prime minister.

The prime minister says he’s “not a fan,” but recognizes that fado is an important part of his country’s heritage. Fado is believed to have been inspired “by African slave and Moorish songs” and “transformed by Portuguese sailors in the early 19th century into a vehicle to express the pain of loneliness and danger of a life at sea.” Later, when Portugal was under a 40-year-long dictatorship, fado became “associated with the government’s rigid values and was used to promote nationalism.” That’s why the current prime minister has a problem with fado, but still recognizes its importance to the local culture.

“Fado must have the right environment, and the singers must be very special, to give it both beauty and high standing,” he says. About 10 years ago, a new generation of singers, one known as Mariza and another named Katia Guerreiro, “began to take over and revolutionize fado.” In Mariza’s case that meant adding different instruments, “cellos, pianos and trumpets, a positive attitude and designer gowns to her performances.” Traditional fado is “unadorned,” with singers dressed in black and accompanied only “by a 12-string Portugese guitar.” The one thing that doesn’t change is the way fado is sung: “You have to have a voice with scars, close to life,” says Misia, one such singer. "This is not the Virgin Mary," she says. "It’s Mary Magdelene." ~ Tim Manners, editor

Pink Champagne

Interest in “all things pink” and a perception that rose wine is “young and extroverted” is propelling a growing market for nonvintage rose champagne, reports Sarah Nassauer in The Wall Street Journal (2/15/07). This trend, which “most producers believe … is a structure shift, not just a trend” — a new category, in fact — is being promoted most notably by Moet & Chandon, which made a decision that pink champagne made sense about six years ago. Part of their thinking was pure economics. It’s less expensive to produce a bottle of nonvintage rose champagne than nonvintage white champagne (nonvintage wines mix “grapes from different harvests”). The margins on the pink stuff are also better, with bottles of nonvintage rose priced “15 percent to 20 percent higher than a bottle of nonvintage white champagne.”

That’s not to say the move into rose champagne wasn’t risky for Moet & Chandon. Their decision meant “transferring valuable grapes to rose production years before any actual sales while the bottles aged.” They couldn’t just plant more grapes because of “a 1927 French law, aimed at maintaining quality, that fixed France’s Champagne region at about 84,000 acres, most of which is already planted.” But Moet figured if they got the marketing right, they should have a hit on their hands. The marketing began with “rose-petal covered Valentine’s Day ads in glossy magazines and special packaging in the late 1990s.” But the real focus has been the fashion industry. For three years running, Moet & Chandon has hosted the Moet Rose Lounge in New York’s Bryant Park during fashion week.

The events cost “hundreds of thousands of dollars” but when Paris Sheraton‘s publicist calls and asks for a VIP pass, Moet assumes it’s getting the right kind of buzz. Next up are Moet Rose "picnic bags, complete with magnums of Rose Imperial. Only 10 will be available for sale in the U.S., priced at $1,500 apiece." Other champagne houses balk at that kind of marketing, but Moet brand manager Franklin D. Isacson says it’s what’s required: "They’re so jaded," he says of the fashion crowd, "We have to do something to stand out." So far, so good: "For decades, rose’s share of the French champagne export market hovered around two percent to three percent. But since 2000, rose champagne’s share has climbed to more than seven percent, with exports soaring 37 percent in the first nine months of 2006," versus a year ago. ~ Tim Manners, editor

Red Velvet Cake

red velvet cake

“It’s the Dolly Parton of cakes: a little bit tacky, but you love her,” says food writer Angie Mosier, in a New York Times article about Red Velvet Cake by Florence Fabricant (2/14/07). If you’ve never tasted, or even seen, a Red Velvet Cake, that’s probably about to change because “it’s all the rage … In New York City, more than 20 bakeries now sell Red Velvet Cake, threatening to end the long reign of the city’s traditional favorites, cheesecake and dark chocolate blackout.” Just five years ago, you basically couldn’t find it anywhere except the fabled Magnolia bakery down in Greenwich Village.

But if you’ve ever seen a Red Velvet Cake, you’re not likely to forget it: “The layers are an improbable red that can vary from a fluorescent pink to a dark ruddy mahogany. The color, often enhanced by buckets of food coloring, becomes even more eye-catching set against clouds of snowy icing.” Some chefs have a problem with all that food coloring, and try to substitute beets or cherries, usually with mixed results. The key to authenticity, however, is a little bit of cocoa, which when “combined with some other traditional layer cake ingredients … takes on a red tinge.”

Down South, where the recipe originated, some bakers decided you couldn’t have too much of a good thing, and dumped in more food coloring to get that color to a brighter shade of red. Red Velvet’s growing popularity up North is sometimes attributed to the 1989 film, Steel Magnolias, and more recently, Jessica Simpson’s 2002 wedding cake, “a towering hexagonal version.” Jessica, who is from Texas, “talked about it all over television.” Lisa Hall, owner of Kitchenette, an N.Y.C. bakery and cafe, says she doesn’t quite know what to make of Red Velvet’s appeal: "It’s neither chocolate nor vanilla," she says. "It’s Southern and moist and comfort food. People love it, and I don’t understand why." ~ Tim Manners, editor

Washington Whiskey

You’ve probably heard that today would have been George Washington’s 275th birthday, but you may not know that the father of our country was also in the whiskey business, reports John Fund in The Wall Street Journal. Shortly after retiring as America’s first president, Washington was pitched on the idea of starting his own distillery. Taxes on imported rum had made domestic “hootch” more popular, and this wasn’t lost on Mr. Washington: “At the time, the average American consumed five gallons of distilled spirits every year, compared with only 1.8 gallons today.” Now, it’s not that Mr. Washington was a big drinker — in fact “he was a light drinker who refused to tolerate alcohol abuse among his employees or his soldiers.”

Nor did he know anything about the whiskey business — but he did understand whiskey’s benefits. During the war, he had seen how moderate alcohol consumption had kept his troops feeling warmer and happier, and less prone to desertion. In politics, Mr. Washington actually lost an election to the Virginia House in 1755 “because he didn’t treat prospective supporters to a drink. Two years later, he rolled out 144 gallons of refreshment. He won with 307 votes, a return on his investment of better than two votes per gallon. He never lost another campaign.” His whiskey business did well, too, but died with the former president, in 1799. New owners took over, but by 1814, his distillery “had been dismantled to provide construction materials for nearby homes.”

Had Washington lived a bit longer (he was just 67 when he died), his whiskey might have survived to the present day. Imagine that! His recipe — which was a bit closer to moonshine than modern whiskey — would certainly have been updated: “In Washington’s time ‘quality’ was a term that referred to the alcohol content far more than the complexity of the distilling process.” His distillery actually has been re-constructed, but only a few bottles will be made and sold to raise money for educational programs at Mount Vernon, Washington’s estate. The real legacy of Washington and his whiskey business actually is this: "He was a true disciple of the free enterprise system, and he sense that our new system of government would encourage people to think creatively, take chances and invest." ~ Tim Manners, editor

Hillaryous Mononym

I like Ike

As if it weren’t enough to try to be America’s first female president (with apologies to Edith Wilson), Senator Hillary Rodham Clinton also wants to be the first presidential candidate since Ike to be elected on a first-name basis, notes Peter Funt in The New York Times (2/21/07). Referring to Mrs. Clinton as “Hillary” is nothing new, of course. But branding her with her first name for her presidential run is now underway with wrought-iron determination. According to Peter Funt (a son of Alan Funt), the name “Clinton” does “not appear anywhere in the long text on the site’s homepage.”

Yes, it does appear “at the very bottom in the obligatory fine print: ‘Paid for by the Hillary Clinton for President Exploratory Committee”, but try fitting that on a bumpersticker. “A close inspection of the site reveals how determined its designers were to cleanse the campaign of the Clinton name. In the senator’s 1,937-word biography, the name ‘Clinton’ appears just once … ‘Hillary’ appears 38 times.” Peter Funt supposes this isn’t so much an attempt to distance herself from her husband, the former president. No, Peter’s best guess is that it is mainly “because she knows that she’s the only candidate whose name lends itself to Oprah-ization.”

Neither McCain nor Edwards can expect much mileage out of their first names (although certainly Romney and Giuliani have similar potential — which Rudy clearly recognizes). Peter suspects the Hillary strategy may be a pre-emptive strike against Barack Obama, whose first name (and definitely his middle name) might not offer marketing advantages (his way-cool logo has taken ownership of the letter “O,” however). But the real play, suggests Peter, may be a diversionary one, shifting attention from “the question of whether America is ready for a female president” to “whether America is ready for a president who wishes to be known exclusively by her first name.” Then again, there’s also that guy named Bill … ~ Tim Manners, editor

Levi Revival

Dockers looked dead, pretty much, when John Goodman got to Levis, but three years later the khakis are back, thanks to a so-called “lifestyle marketing” strategy, reports Ray A. Smith in The Wall Street Journal (2/14/07). John arrived at Levi Strauss with the right kind of experience, having “helped oversee the transformation of Gap’s Banana Republic from a brand known for safari-inspired clothes to an upscale line for men and women.” As John explains: “I’m a merchant, a product guy through and through … So it’s been about making sure our product is the best quality, the most relevant, and in some cases, the most fashion-forward that we can be.”

That relevance is largely a result of surrounding Dockers’ khakis with a complete line of complementary apparel — “shirts, sweaters and blazers, as well as more fashionable women’s clothing … The company also started designing Dockers men’s apparel specifically for four occasions — work, weekend wear, dressing up and golf — and marketing it that way.” This was a departure from the past, where khakis were mainly positioned as “the dot-com uniform of choice.” That positioning was damaged as competitors edged into that marketplace, and then basically popped along with the dot-com bubble.

The new Dockers image also involves a name adjustment — the brand is now known as “Dockers San Francisco, to emphasize the lifestyle component and the brand’s roots.” It also includes a shift to “more expensive, more fashion-forward khaki,” which had threatened “to do to Dockers what premium jeans did to the company’s core Levi’s brand. Instead, Dockers is now driving “most of the growth” for Levi’s, according to analyst Carla Casella. She adds: "it just shows that a little bit of focus goes a long way. They found a way to add some edge and differentiate the brand." The Dockers brand had declined 21 percent in the fiscal year ending in November 2004, but has grown every quarter since late 2005. ~ Tim Manners, editor

Kraft Cheez

cheez whiz

Kraft ceo Irene B. Rosenfeld has visited our kitchens and believes she now understands how to jump-start her company’s sales, reports Janet Adamy in The Wall Street Journal (2/20/07). “Part of the strategy is really about looking at our products through the consumers’ eyes rather than through our manufacturer’s lens,” says Irene. That strategy would of course mark a radical departure from Kraft’s previous strategy, which was all about cutting costs, compromising quality and losing market share. However, Irene goes on to say that cheez “is a perfect example” of how Kraft’s new strategy will work.

“Our cheese segments are based on our manufacturing processes,” she explains. “We have processed slices, natural chunks, jar cheese — not exactly the most appetizing kinds of descriptions,” she admits. But the picture changes, says Irene, when you consider how consumers actually use these products. “Consumers are using processed slices to make sandwiches,” she says, and in another snip of insight, “They’re using jar cheese to dip and spread. So, if you start to focus on it from the consumers’ perspective, it opens up a whole world of possibilities to what new products one might offer.”

Oh. Irene also notes that Jell-O is just as popular as ever, just that we are consuming it differently. “That’s why we make Jell-O in ready-to-eat form,” she explains, adding, “We’re about to come out with Jell-O with fruit in it that’s ready to eat.” Irene also observes that microwaving is the new stovetop, and that people are not so much into cooking as they are into “assembling.” Which is why Kraft is introducing Deli Creations, says Irene, which are “hot sandwiches that are made with our high-quality ingredients like Oscar Mayer meats … what’s so cool about them is that you stick them in your microwave, it takes 60 seconds and it tastes freshly baked." ~ Tim Manners, editor

Fat n Happy

A startling correlation between chubbiness, charity and happiness has been revealed in research by University of Michigan and Indiana University, according to an essay by Arthur C. Brooks in The Wall Street Journal (2/17/07). First of all, the research found that “people in the overweight category in 2001 were 11 percent less likely than those in the normal range to say they felt inconsolable over the past month. They were also 18 percent less likely to have felt worthless, or to say that ‘everything was an effort.'” In addition, “while 68 percent of men in the overweight category gave money to charities in 2001, only 62 percent of men in the normal range” made contributions.

“Overweight men were also the most likely to volunteer their time for various causes and charities.” Arthur doesn’t cite any figures for women, but does note that the spirit of charity does tend to recede among those who are not just overweight, but qualify as obese. However, he goes on to report that, “on average, the heavier man will give about five percent more money away than the thinner man each year.” Despite these stats, Arthur says he doesn’t think that there actually is a cause-and-effect relationship between one’s weight, one’s happiness or one’s charity.

Instead, he points out that very few people meet the definition of "normal" weight anymore. "There is no disputing that thinner is healthier," he writes, "but between cheap food, long work hours, supersized restaurant portions and a ban on the delights of nicotine, thin is simply no longer how most ‘normal,’ well-adjusted people look." Arthur also says most normal, American lives involve "foursquare virtues like charity and a good deal of happiness." He concludes by suggesting that the real issue may be a "tradeoff between focusing on oneself and thinking of others … When it comes to dessert," writes Arthur, "today’s abstainer may tend to be the person who denies the rest of us a smile or donation." ~ Tim Manners, editor

Sportacus

sportacus

If your child suddenly insists on going to bed at exactly 8:08 p.m., you can be sure it is thanks to the incredibly expanding influence of Magnus Scheving, a.k.a. “Sportacus,” as reported by Sarah Lyall in The New York Times (2/17/07). Magnus stars as an elfin character called Sportacus on a television show called “LazyTown,” which originated in Iceland but is now “broadcast in 106 countries, including the United States.” In addition to advising a bedtime of precisely 8:08 p.m. (if you don’t you’ll be grumpy), Sportacus hopes your child will follow his advice when it comes to exercising, eating good food and generally leading healthier lives.”

Sportacus seems to be having his intended effect. For example, when LazyTown “organized a promotion in which children could exchange special LazyTown ‘money’ for healthy products, sales of fruit and vegetables increased 22 percent in one month … The show depicts a community whose children are constantly tempted by the sweets and sloth offered by the world’s slobbiest villain, Robbie Rotten. But the day is inevitably saved by Sportacus, who repels junkfood by the deft use of tennis rackets, passes off apples and carrots as energy-enhacing ‘sports candy’ and never walks into a room when he can just as easily do a double flip through a window.” Cool.

Sportacus lives in a "dirigible in the sky," sports "a thin, black mustache that juts out as if he had recently been electrocuted" and has a "ski hat-cum-nightcap permanently affixed to his head." Magnus came up with the character (originally called "Sports Elf") 12 years ago, originally for a book, but always with a mind toward the merchandising possibilities. "Tarzan was a great concept," says Magnus, "but you can’t really sell his clothing, because he was naked." After the book came a stage musical, and today he is "credited with prying a generation of Icelandic children off the computer and sending them into the frigid outdoors." Says Magnus: "I want to motivate the world, basically." ~ Tim Manners, editor

Mad River Glen

The 1,700 shareholders of the Mad River Glen ski area never agree on anything (except maybe beer) but they do agree that the fabled mountain should restore “its historic, signature single-chair lift, that vision of quirky skiing solitude,” reports Bill Pennington in The New York Times (2/9/07). Nevermind that it would cost $300,000 less simply to replace the lift with “a modern double-chair.” The shareholders, each of whom pays $1,800 a year to be part of the ski area’s cooperative, are intent on raising the $1.5 million required to refurbish the old lift.

What else might we have expected? Unlike so many other mountains, Mad River Glen today “is not substantively different from what it was when it opened in 1948.” Snowboarders are not allowed. Grooming is off limits on the mountain’s best trails. “Snowmaking? We think it’s a fad,” says Eric Friedman, the mountain’s marketing director. Some snowmaking does happen in the early part of the season, but after New Year’s, if there’s not enough snow, the mountain closes. As of early February, all 45 trails were open. At Mad River Glen, the parking lot is still dirt, real estate development has been denied and corporations are not running things.

To raise money, shareholders will bid at auction on 140 of the 158 original chairs, there will be a $5-a-ticket raffle to give away five chairs and an essay contest to win another three chairs (if you’d like to enter, email ski@madriverglen.com). At least one chair will be sold on eBay and another will “made into a bar stool inside the lodge.” After the restoration, the lift will run on electricity instead of a diesel engine. Most important, the experience will be pretty much as it was in the 1940’s, a 12-minute ride to the top, “a rise of 2,037 feet" above the "twisting, narrow trails, unlike any you have probably ever seen." All by yourself. ~ Tim Manners, editor

Backyard Blizzard

backyard blizzard

This year, none of Marshall Heaven’s Greenwich, Connecticut, neighbors had any snow in their yards until Valentine’s Day, but he had a huge hill of packed powder in his backyard all winter and his kids were loving it, reports Penelope Green in The New York Times (2/15/07). Actually, the kids were probably not as excited as their dad, who has embraced backyard snowmaking as the wintertime equivalent of the backyard barbecue. But instead of propane and a grill, Mr. Heaven is manning a snowmaking machine, creating an impressive hill that is just perfect for sledding. He’s not alone. David Young, who lives near Atlantic City, New Jersey, says he sometimes stays up all night making snow.

“I just like being out in it,” he says. “It’s really hard to turn the guns off; it looks so good piling up.” What piles up is “denser than snow that starts out in a cloud,” but it’s said to have good “stacking qualities.” In fact, there’s a growing subculture of home-snowmakers who chat online “about terms like nucleation and wet bulb temperature” at forums such as snowguns.com, “which has over 3,700 members … There are discussions about how to build your own rope tow and lengthy back-and-forths about the attributes of various snow wand nozzles.” Clearly, it’s a “guy” thing, and certainly good news for companies such as Snow Economics and Snow at Home, which report brisk sales.

“We’ve hit every state but Hawaii,” says Matt Pittman of Snow at Home, suggesting that he is even selling snow to Alaskans. Perhaps his success is yet another indication of global warming, although his enterprise, ironically, is not helping to solve that problem. Snowmaking “runs on electricity” and the Backyard Blizzard Sport machine, for example, "has a 1.5 horsepower engine" that "can use up to 1,650 watts" — a little less than the average clothes dryer, but not exactly environmentally-friendly, either. And, of course, guys like Marshall Heaven are already eyeing bigger machines, perhaps even a commercial model. "Everyone who makes snow wants a larger hill," he says. Now if only someone could perfect a sunshine machine … ~ Tim Manners, editor

Dreamliner Gallery

Boeing is hoping to streamline airline design with a showroom where its customers can experience everything from the seats to the windowshades to the microwave ovens, reports J. Lynn Lunsford in The Wall Street Journal (2/14/07). The concept is based somewhat on automobile showrooms, but also builds on a “mock-up center” established by Boeing’s chief rival, Airbus, back in the late 1970s, which former Boeing ceo Alan Mulally visited “a couple of years ago.” The difference is, the Dreamliner Gallery, as it’s called, “is conceived more as a true design center,” and Boeing is promoting it as “the next step in designing and building jetliners.”

It is also intended to shorten design time, simply by putting all of the options under one roof: “Until recently, putting together the interior of an airplane was an 18-month shopping marathon that required airline officials to visit dozens of individual suppliers.” By first creating an online catalog and then gathering “the various choices of interior items … near the company’s widebody airplane factory in Everett, Washington,” Boeing hopes both to shorten the design cycle to just four months, as well as cut costs. Perhaps ironically, Dreamliner Gallery also is designed to limit choices and actually “discourage airlines from going crazy with options.”

Like a good boutique, Boeing edits what it offers. “It got to the point that all of the customization was getting out of control,” says Boeing’s Randy Atkins. “Boeing says it will still allow customers to choose equipment not on the approved list, but airlines that stray from the standard catalog will be required to pay any extra cost.” Dreamliner Gallery is also said to be a boon to smaller airlines that typically don’t have “relationships with some of the bigger suppliers.” As for Airbus, well, let’s just say they are looking on with interest. Says John Leahy of Airbus: “I knew this was going to happen when we let Alan Mulally look at our mock-up center." ~ Tim Manners, editor

Online Kaizen

kaizen

A Japanese management technique that was all the rage 20 years ago in manufacturing is now coming back in vogue on the internet, writes Hal R. Varian in The New York Times (2/8/07). The technique — Kaizen — is out of the “continuous improvement” and “lean manufacturing” and “just-in-time inventory systems” school of Japanese manufacturing. It is so standard today that it is not news anymore — except perhaps to online enterprises run by executives who “were in grade school in the 1980s.” But the concept of “a disciplined process of systematic exploration, controlled experimentation and then painstaking adoption of the new procedures” may be even better suited to the online world than it was to manufacturing.

When applied to new product development, for example, kaizen might yield “quality improvements or cost savings in a matter of months.” But online, with a web page, for instance, the benefits can be realized within days — making the notion of “continuous improvement” truly continuous. Amazon, for example, “can show a different page layout to every hundredth visitor” and know “in real time” which designs produce the greatest sales increases. Such possibilities give online media a distinct competitive advantage over traditional media, which Hal says “just do not understand online kaizen.”

Hal cites The Wall Street Journal‘s recent re-design as an example, noting that "it will be months before it becomes clear how successful" its changes were. "By contrast," writes Hal, "small tweaks in the page layout of online content can be very effective in improving user satisfaction and ad clicks." Hal also says online kaizen tends to offer established players an advantage over upstarts: "The experience that existing online retailers like Amazon, Buy.com and eBay have built up is hard to duplicate … A new entrant, even one as strong as Wal-mart, finds the online world rough going." However, new players do have an edge in that "they can copy successful operations and, in many cases, improve on them." And improve on them … ~ Tim Manners, editor

Walgreens Cosmetics

Sensing weakness within the department stores, Walgreens is making a bid to capture upscale cosmetics customers, reports Amy Merrick in The Wall Street Journal (2/8/07). Walgreens, at $47 billion in annual sales “the nation’s largest drugstore chain,” is introducing “seven skin-care lines from five countries — France, Spain, Greece, Germany and Switzerland — at nearly 1,000 of its stores.” The move by Walgreens follows that of CVS, which “has been expanding its successful partnership with Lumene, a high-end Finnish skin-care and cosmetics brand,” and with Boots, a British brand. Target also sells “about 20 lines from countries including New Zealand and Portugal.”

Walgreens says its goal is to increase the average number of items purchased per trip to four items from 3.3 items. The question is “whether shoppers will pay $10 to $60 for creams, scrubs and lotions, some of which are sold in upscale department stores and in Europe.” Hopefully, shoppers like Debora Pitlik, who usually buys Clinique at department stores, isn’t typical. Debora says she’s not opposed to the idea of buying expensive cosmetics at Walgreens, but says she “always walks right by the new cleansers, lotions and creams” simply because she usually buys them “somewhere else.”

Walgreens hopes it can change Debora’s behavior by offering up exotic alternatives that can’t be found “somewhere else.” For example, a brand called Red Water, from Greece, “uses thermal spring water from Pella, the birthplace of Alexander the Great, while Artdeco, the top-selling color-cosmetics brand in Germany, includes caviar and silk in its face creams." Part of the Walgreens plan involves promoting the relatively less expensive ($20-$25) items first to get shoppers hooked. Walgreens is also investing in training in-store "beauty advisors," seen as critical to persuading time-strapped shoppers to try the new offerings. Walgreens "says it expects to roll out about 13 of the 137 items to nearly all its roughly 5,500 U.S. stores beginning this summer." ~ Tim Manners, editor

Terra Bite Lounge

terra bite lounge

You can pay anything you like at the Terra Bite Lounge in Kirkland, Washington, reports Amy Roe in The Seattle Times (2/6/07). No prices are listed on the menu — it’s up to the cafe’s customers to decide how much to pay, or whether to pay at all. “Does it really matter to any of our patrons … whether they pay a dollar or three dollars or five dollars?” says Ervin Peretz, a Google programmer who scraped together the dough to start a cafe that he says sells “good karma” as much as coffee and snacks. His bet is that “he can finesse the largesse of well-off latte lovers to cover the tabs of the less fortunate.”

Ervin says he got the idea while drinking at a bar in Saigon, and named the place as “a play on the tech term ‘terabyte,’ a trillion bytes, as well as a reference to earth and food.” As he explains: “People want something different. They want simplicity … They want to be taken to a new place, and they want to contribute something.” One patron, Tonja Maciolek, says she likes the idea “because she’s sensitive to price and would prefer to name her own, even it ended up being the same.” She contributed $4 for a bagel with cream cheese and coffee.

Kate Lewis, a high school student, says she’d pay extra for the privilege of setting her own price. "It’s kind of like a social experiment," she says. Which makes Chris Allar, slightly crazy. "It’s always hard to see if you paid too much or too little," he says, admitting to a certain anxiety over that. But Ervin thinks he’s onto something — since opening late last year he’s served an average of 80 customers a day, each of whom has paid an average of $3. He says he needs about 100 a day to break even. If that doesn’t happen, he says his alternative is pretty obvious: "If it turned out that 20 percent of the population were dishonest, we could just put in a cash register," he says. ~ Tim Manners, editor