May 26, 2011
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Old CEOs can learn a few new tricks from Lady Gaga

May 26, 2011

May 26 - Singer Lady Gaga may be recognized by most for her provocative outfits and wild shows, but she can school corporations in strategic innovation, a German business researcher told Reuters on Wednesday.

Lady Gaga
Lady Gaga

Lady Gaga, whose second album, "Born This Way," was released on Monday, is widely expected to produce strong sales and land atop the music charts, regardless of critical reception.

A result that is largely due to her ability to vary how consumers relate to her brand, said Martin Kupp, a professor at the European School of Management and Technology in Berlin.

"Lady Gaga blurs the industry boundaries and it's not really clear if she's a musician, artist or fashion designer," said Kupp, an author of a recent book on business lessons from artists such as singer Madonna and Renaissance painter Titian.

"I think there may be people out there who associate her much more with fashion or with other sorts of entertainment than music," Krupp added of the 25-year-old whose attention-getting attire has included a raw meat dress.

Billboard estimated 450,000 to 750,000 copies of her record released by Universal Music Group's Interscope Records could be sold in the first week alone.

High demand for a special 99-cent download of the album caused the servers of online retailer Amazon to crash.


Kupp and his colleagues in a recent case study credit the singer's social media strategy as a way for businesses to learn new methods to shake up an established industry.

By using social network Facebook and micro-blogging site Twitter, Lady Gaga has developed an army of fans through virtual interaction and not by pushing traditional marketing principles of promotion, product and price onto consumers, Kupp said.

"Social media is not a one-way communication and I think Lady Gaga understands that," Kupp said. "It's more about emotions, engagement and interactivity, so she's very advanced."

Lady Gaga refers to herself as "mother monster" and her fans as "little monsters," Kupp noted, adding that such a bond is not lost on consumers.

"That's what you're looking for in social media," he said. "It's to create much more intimacy than what you created with traditional marketing instruments."

Kupp said Lady Gaga's business strategy has been able to breathe life into the music industry which has struggled to adapt its business model with the technological change to Internet downloads and online piracy.

"She's a role model to show that it's not only about music but also about concerts, merchandising, art, fashion, media and daily life," Kupp said, adding that her record label profits on all of her other activities, too.

By Eric Kelsey
(Editing by Paul Casciato)

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