Schultz: I think we are just going to see more, and more, and more of that. I will tell you one interesting story. We were doing some work in China this spring, and most of the work we do is in seminars and conferences with Chinese companies. One of the issues that came up was branding. So, the Chinese companies were sitting there saying, "Well, how do we build brands?" And, we came up and said, "Well, there are two or three ways you can build brands. You can go out and build a brand the way it has traditionally been done, which is sort of what Haier is trying to do in the U.S. You can do what Lenovo has done, and that is you go buy a brand somewhere else. And, the third alternative is to go buy the retail distribution chains."
And, the Chinese then said, "Gee. That would be kind of interesting. Why don't we go buy Wal-Mart?"
Berens: I wonder if they will do it.
Schultz: And, we were sitting there saying, "Well, that is kind of silly." Except, when you think about it, they really could buy Wal-Mart.
Berens: And, they are the people who are creating most of the product for Wal-Mart…
Schultz: Exactly.
Berens: So, it is an integrated strategy in terms of distribution, right there.
Schultz: Exactly. So, what you do is you buy Wal-Mart, and you walk all your products in under the Wal-Mart name. You don't even have to build brands. That is kind of an interesting concept.
Berens: I am actually staggered by that concept.
Schultz: But, the only discussion that came out, or the only question that came out of this discussion was, "how much stock does the Walton family still own in Wal-Mart? Because we don't want to get into a hostile takeover."
Berens: Well, that is, uh, kind of them to be thinking it over.
Schultz: To be thinking about that (Laughter). When the Chinese tried to buy Unocal, the U.S. Federal government stepped in and said, "Oh, no, you cannot have an energy resource." What would happen if they had decided that they wanted to buy Wal-Mart? Would Wal-Mart be considered a national treasure? Would the government say, "You cannot buy them either. We are going to try to fight you off from it," or something like that?
Berens: Given that Wal-Mart is the single largest buying force on the planet, there is a fair argument to make there.
Schultz: Oh, absolutely.
Berens: What happens? Does the federal government then buy Wal-Mart?
Schultz: Well, hell, they have bought everything else.
Berens: Exactly.
Schultz: Anyway, I keep seeing radical change. And, the thing that concerns me more than anything else is that we are so insular and so insulated in the U.S. that we know very little about what is going on in much of the rest of the world. And, the things that are going to impact us are already there, but we either don't pay any attention to them, don't know about them or our media doesn't cover them.
Berens: Well, we are certainly trying to cover things, although it is challenging.
Schultz: Oh, absolutely.
Berens: And this has been a long time problem… there was a piece in "strategy+business" back in 2000 or so that pointed out that we have an entirely different data-capture culture here in the U.S. than exists in Europe. Here in the U.S., we have an opt-out culture.
Schultz: Sure.
Berens: And frequently it is very difficult to opt out of something. Whereas in Europe, throughout Europe, it is an opt-in culture.
Schultz: Absolutely.
Berens: And that poses a huge challenge to multi-national entities, where they suddenly have to manage two different databases with two different rules.
Schultz: Yeah.
Berens: And, I am curious if you think that is going to have a drag effect on integrated marketing on the international scale.
Schultz: Well, here's the interesting thing. Last night, here at the university, we had a little IMC [Integrated Marketing Communications] gathering last night, and one of our adjunct professors was there. There is some sort of postal group that is taking him to all of the emerging countries to work with the postal service about building databases. So, he has been to China; he has been to India; he has been to Brazil. And, he is consulting with the postal service to help them understand how you build databases, and what you do, and how you develop it. Now, if the postal services start to do that, that has a big impact on who owns the data, and who patrols the data.
Berens: Right.
Schultz: So, I thought that was one of the more interesting things that I have heard in quite some time.
Berens: Do you think that the postal service controlling the data would enable more sharing of data with the two different data cultures?
Schultz: I would be more concerned they would be more restrictive.
Berens: That is very interesting.
Schultz: Because, as a quasi government entity, they would have to be extremely careful about what they did with the data. And, I think that would have probably more of a chilling effect on it than an expansion effect.
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