Boomers have freedom both to spend and withhold spending.

Because they already have enough housing, cars, and clothing, they not only have the freedom to spend on what they want; they have the freedom to withhold until they find exactly what they want, whether that’s a Jaguar, a Hummer, or a Cadillac. This elevates the importance of brands in reaching growing, profitable market segments. If brand managers can create fans among aging baby boomers, the likelihood of converting interest into a sale is greater, because the boomers can

• However, Mick Jagger himself seems each year to discover another new family

responsibility, if you follow the paternity suits filed in various places.

probably afford to buy it. That’s a major difference in their lifestyle compared to a decade ago.

Aging baby boomers become fans of brands that fulfill certain expectations-quality products that are aesthetically pleasing, personally satisfying, natural, convenient, easy to use, and, if possible, noncaloric. Expect empty nester boomers to indulge in luxury travel, restaurants, and the theater, which often means they need more fashionable clothing, jewelry, and the designer brands found in department and specialty stores. They watch their waistlines and diets and are good prospects for spas, health clubs, skin care products and cosmetics, beauty parlors, and healthier foods. As they approach retirement, they purchase condominiums and begin to take more frequent but perhaps value oriented vacations, often purchased online. They need financial planners with financial products oriented toward asset accumulation and retirement income-perhaps even stocks that pay dividends.

Beyond the mundane, however, is the magic of Wal Mart-its people. As Sam Walton used to say, “Customers are more important than stock.” The company understands that every interaction with a customer affects his or her satisfaction with the overall shopping experience. Therefore, management preaches friendly, competent service-to provide accurate answers to customers’ questions, find additional help if necessary, and make the in store experience positive for the customer. Wal Mart implemented the “10 foot rule,” which prompts employees to greet each customer within 10 feet, offer to help them, and take them to the products for which they are looking.

And then there’s the Wal Mart greeter-the likable person stationed inside the front door who gives you a cart, a smile, a friendly word, and occasionally a hug (at least that’s what happens on the commercials). Held over from the earliest days of Wal Mart, the greeter is an ambassador of the Wal Mart philosophy and culture and a little bit of magic in a sea of hectic moments. As the company continues to expand, hiring the best people and training them in the Wal Mart way is challenging. And while failures in the employeetraining system may be inevitable, speed in correcting problems is part of the culture at Wal Mart.

The hallmark of the Wal Mart shopping experience is the organization’s ability to offer customers what they want to buy at a price they want to pay. Wal Mart defines one stop shopping-customers can buy everything from steak to tires under one roof, and know they’re getting quality products at great prices. In fact, Doug Degn, executive vice president of food merchandising at Wal Mart, says, as others have said before him, “At Wal Mart, we don’t consider ourselves as selling products to customers; we consider ourselves buying agents for our customers. ” Ask most vendors, and they would have to agree. Today, the power of Wal Mart plays a big role in what manufacturers make. For example, Procter & Gamble sold its Crisco shortening and Jif peanut butter brands because it wanted to focus more on Tide and other brands that were more favored by Wal Mart. Similarly, video game maker Planet Moon Studios made changes to its game Giants in order to receive a teen rating, which is a requirement for products to be sold in Wal Mart. Lack of distribution by Wal Mart was too much of a financial risk.

Sometimes in the middle of the night, I have to get up and start painting.” Wood’s words ring true for entrepreneurs who have dedicated their lives to the conception, care, and feeding of their business babies.

The difference between the megastars of music and the millions of wannabes is a strategic gap that should intrigue every entrepreneur who wants to create a megabrand. It should also concern executives of major, successful firms who hope to stay at the top of their industries.

Some of those would be competitors will become megastars, poised to revolutionize an industry, much as Elvis and the Beatles shook up the music industry, and ultimately affected the social mores and values of our nation.

If you find yourself starting to think about some of your favorite bands and hypothesizing what has made them successful, congratulations-you get it. But if you are pondering the relevance of rock and roll to your firm’s performance, remember that businesses and rock and roll bands share several goals, including: S Breaking through the clutter and creating awareness among consumers otherwise inundated with messages and advertising about competitive products and companies S Creating and maintaining loyalty or devotion among customers S Identifying mechanisms for remaining current and relevant in the minds of existing customers and attracting new customers S Creating lasting brands that are accepted by a culture S Becoming long term industry leaders S Attracting and keeping talented people who make up and market the brand S Identifying one or more market segments and crafting products that appeal to them S Creating a brand image and promise that will maintain its appeal from one year to the next S Generating profits Although many of the issues faced by bands and businesses are the same, and many of the solutions are similar, the approach to finding the solutions and implementing them are often quite different.

• “Heteroclite” is a technical term from classical Greek that Graham uses to

mean abnormal or unusual.company than “Reduction,” and in 1969 had less than half the other’s volume.* Nonetheless its equity issues sold for 25% more in the aggregate than Air Reduction’s stock. As Table 18 2 shows, the reason can be found both in Air Reduction’s greater profitability and in its stronger growth record. We find here the typical consequences of a better showing of “quality.” Air Products sold at ? times its latest earnings against only 9.1 times for Air Reduction.

Also Air Products sold well above its asset backing, while Air Reduction could be bought at only 75% of its article value.? Air Reduction paid a more liberal dividend; but this may be deemed to reflect the greater desirability for Air Products to retain its earnings. Also, Air Reduction had a more comfortable working capital position. (On this point we may remark that a profitable company can always put its current position in shape by some form of permanent financing. But by our standards Air Products was somewhat overbonded.) If the analyst were called on to choose between the two companies he would have no difficulty in concluding that the prospects of Air Products looked more promising than those of Air Reduction. But did this make Air Products more attractive at its considerably higher relative price? We doubt whether this question can be answered in a definitive fashion. In general Wall Street sets “quality” above “quantity” in its thinking, and probably the majority of security analysts would opt for the “better” but dearer Air Products as against the “poorer” but cheaper Air Reduction. Whether this preference is to prove right or wrong is more likely to depend on the unpredictable future than on any demonstrable investment principle. In this instance, Air Reduction appears to belong to the group of important companies in the low multiplier class. If, as the studies referred to above?? would seem to indicate, that group as a A Comparison of Eight Pairs of Companies

• By “volume,” Graham is referring to sales or revenues-the total dollar

amount of each company’s business.