Houses designed in part by Martha Stewart are a rare source of good news for KB Home--the nation's seventh-largest builder by market value--which two weeks ago reported an unexpectedly large quarterly loss amid deteriorating markets. The Martha homes represent less than 5% of KB's overall home-building production. But with the Martha developments outselling most of KB's other subdivisions, the company is expanding the Martha brand to as many as 36 new markets, as soon as it can obtain the necessary permits and land, a KB spokeswoman says. The Martha-KB partnership is a closely watched experiment in brand …

J.C. Penney is pushing the envelope in a back-to-school campaign that combines several poignant spots with a reality TV series available on the Web. One commercial follows a pack of students as they are chased around school by headless--though very well-dressed--zombies who, it turns out, want to impart fashion advice. The Webisodes (at jcpenney.com) challenge students to leave the comfort of their self-assigned cliques and join an unlikely social circle for a few days. The campaign, set to start on Friday, is from Saatchi & Saatchi, which Penney hired in September. Since then, Penney has …

In order to compete with Nintendo's top-selling Wii game console, Microsoft plans to cut the $299 to $479 prices of its Xbox 360 game console, says Shane Kim, vice president of Microsoft Game Studios. It hopes to lure customers who aren't interested in traditional combat and racing video games. He won't say when the cuts will happen. The company also says that Walt Disney Co. will offer films for rent through Microsoft's Xbox Live online service. Time Warner's Warner Bros. and Viacom's Paramount studio already sell and rent movies on Xbox Live. The Disney films to be available …

Hyundai Motor's marketing team is readying two key marketing efforts: a launch campaign for a new luxury car--the Genesis--which it hopes will propel it into the same league as Lexus, BMW and Mercedes, and an image campaign for chairman Chung Mong-koo, who was convicted of embezzling company money and breach of trust. Chung, the 69-year-old son of Hyundai's founder, is appealing his conviction. He has won back his passport from the courts and has been traveling the world spearheading South Korea's campaign to be the host of Expo 2012. He also promised to donate "to society" $1 billion worth …

Scrambling to show that it is serious about improving the safety of its products, China executed its former top food and drug regulator Tuesday for taking bribes to approve untested medicine. The Beijing No. 1 Intermediate People's Court carried out the death sentence against Zheng Xiaoyu, 62, the former head of the State Food and Drug Administration, shortly after the country's Supreme Court rejected his final appeal. Zheng had appealed his May 29 sentence on the grounds that it was too severe and that he had confessed to the bribery charges against him. On the same …

During his first two months on the job last year, Mitsubishi North American CEO Hiroshi Harunari visited 139 Mitsubishi dealerships in 29 states to win back dealers' trust. He focused on listening to dealers' long lists of grievances, and assured them that Mitsubishi was committed to the U.S. market. He then took steps to address such basic problems as slow delivery of parts from suppliers. So far, Harunari's personal touch seems to be working. In a surprise turnaround, Japan's No. 4 carmaker by sales volume swung back to a full-year operating profit of $5 million in North America …

Capital One CEO Richard D. Fairbank--a recreational hockey player--is fond of the Wayne Gretzky quote about skating to where the puck will be. As a founder of Capital One, he helped transform the credit card industry with innovations like teaser rates and zero-interest balance transfers. Now, he's moving into retail banking. Two years ago, Capital One did not have a single branch. Today, with the purchase of Hibernia National Bank and North Fork Bank in quick succession, it has 720 locations in five states. In the future foreseen by Fairbank, lending is national but branch operations are local. …

Procter & Gamble is exploring opportunities to develop such Pampers-branded products as bottles, crib accessories and health and beauty items. P&G last month named The Beanstalk Group to handle Pampers licensing as well as Always, a feminine product line it's thinking of extending with items like deodorants and sprays. Pampers is P&G's biggest-selling brand, with annual net sales exceeding $6 billion. Gayle Jones, P&G manager for trademark licensing, stresses that plans are in the initial strategic stages. P&G also is planning licensing programs for Dawn, Scope, Secret and Folgers, and has increased programs behind Olay, Cover …

Cold Stone Creamery has asked feuding celebrities like Rosie O'Donnell and Elisabeth Hasselbeck and singer Kelly Clarkson and record producer Clive Davis to come together July 31 and visit Cold Stone Creamery's flagship store in Times Square on the final day of National Ice Cream Month. In turn, it says it will donate $10,000 to each individual's charity of choice. The unusual cause marketing overlay is part of the company's first national TV ad campaign shows that true ice cream lovers can overcome just about anything. The charitable cause is "a fun way to bring attention" to the …

Federal Communications Commission Chairman Kevin Martin intends to propose rules for new wireless airwaves that would allow consumers to pick any smartphone or other device and load any software on it rather than having to take what wireless carriers want to sell. The government is auctioning the 700 MHz spectrum -- which is being vacated by TV stations as they go digital -- early next year. European consumers for years have had access to an array of "unlocked" devices they can pack with applications from a variety of developers. And because the devices aren't tethered to any …