THE END OF MARKETING AS WE KNOW IT This is Sergio Zyman , Former Chief Marketing Officer, Coca-Cola Company He took Coca-Cola from a market value of $ 56 m to $ 193 m , a growth of 245 % in just 5 years, and increase their sales volume by 50% during the same period He has now left Coke and written a book about how his marketing philosophy delivered this achievement. This is what he says in the book about marketing ..…..
Marketing as we know it today is about image. It’s about getting consumers to love your products. Its about producing award-winning commercials and promotions, and creating ads that people like. The problem is, its not working. Marketing is a science, not an art. Marketing is too important to be left to the marketing department All marketers must be accountable to shareholders I don’t care about making award-winning commercials. The only thing that any marketing person should care about is real consumption.
Marketers need to stop fooling around with the “marketing is an inscrutable mystery” hogwash and get down to business. Why do we have marketing ? To make money. When marketers understand that the goal is the selling and not just running promotions, they sell a lot more stuff. When you understand that marketing is what you do to sell stuff, then the money that you lay out is an investment instead of an expense. A good marketer will sell everything that a company has the ability to produce, the whole shebang, not just two-thirds, or eighty percent of the shebang.
We decide that we are going to be able to sell X, and then we tell the manufacturer to manufacture that much. And we never sell any more. You absolutely cannot spend more money every year just to keep your old volume Marketers focus too much on tasks, and not enough on results. They lack the discipline needed to achieve the desired results because they do not do a good job of defining what those results should be. If you want to establish a clear image in the minds of consumers, you first need a clear image in your own mind.
<ul><li>NUTRALISE THE COMPETITION </li></ul><ul><ul><li>Netscape launched their browser, Microsoft gave theirs away free. </li></ul></ul><ul><li>KILL THE CATEGORY </li></ul><ul><ul><li>Pepsi launched Crystal Pepsi, so Coke launched Tab Clear </li></ul></ul><ul><li>to compete with Diet Coke and reposition Crystal Pepsi in </li></ul><ul><li>the diet segment, where it failed because it contained sugar. </li></ul><ul><li>KEEP YOUR FOCUS </li></ul><ul><ul><li>McDonalds gave cheap priced toys with Happy meals, and started selling more toys than burgers </li></ul></ul><ul><li>LEARN FROM EVERYTHING </li></ul><ul><ul><li>Don’t have more than one strategy about any issue, but have strategies about lots of issues. </li></ul></ul>
Strategy is the one thing that will keep you clean. When in doubt, just check whatever you want to do against strategy. MARKETING IS SCIENCE When you start really looking at exactly how much things cost and how much profit you are getting as a result of incurring those costs, you become a much better marketer. In finance, variance analysis is perfectly acceptable - why isn’t this true in the marketing world ? Get close to your data and measure the results. Analyze the details behind success as well as failure
<ul><li>OWN THE DIALOGUE </li></ul><ul><li>Consumers will answer questions honestly, but they won’t answer </li></ul><ul><li>what you don’t ask. Ask the right questions. Test and revise. </li></ul><ul><li>LEARN THE VALUE OF LISTENING </li></ul><ul><ul><li>Consumers rejection of New Coke Don’t forget to ask WHY ? (from cognition to connection) When you know WHY, it’s a lot easier to figure out HOW to produce the WHAT that you want </li></ul></ul><ul><li>Each round of the fight should be seen as a distinct event that is </li></ul><ul><li>linked to an overall destination. Make sure that you accelerate </li></ul><ul><li>your ability to get to the end of the fight with more rounds won </li></ul><ul><li>and less damage to your body. </li></ul>
Megabranding takes away the uniqueness and says in effect “look. All of our products are basically the same” Brands aren’t static - broaden the appeal but don’t lose the uniqueness COMPETE AGAINST YOURSELF Somebody is going to compete with your products and try to steal your customers. If someone’s going to do it, why shouldn’t it be you ? Too many marketers don’t understand what branding and positioning need to do. So the images they create are fuzzy, irrelevant or boring. Marketers make a big mistake when they hide behind the concept of building images so that they won’t be held accountable for producing any results. It’s baloney to suggest that marketing isn’t about selling products and making money. Creating a positive image in consumers minds isn’t the whole game, but it is very important.
<ul><li>EXAMPLES : </li></ul><ul><li>Coke ran “Have a Coke and a smile” while Pepsi ran “Take the Pepsi challenge and let your taste buds decide”. Coke focused on image while Pepsi was going for sales! </li></ul><ul><li>The Nissan “Asian with a dog” ad - what is the communication ? </li></ul><ul><li>Milk ads showing celebrities with milk moustaches - love the ad, great image of milk, but it doesn’t drive me to consumption </li></ul><ul><li>Al Gore - nice guy, but where does he stand, why should I vote for him ? </li></ul><ul><li>Starbucks told me that good coffee doesn’t come in vacuum packed cans (seized the communication, reset the standards) </li></ul>
KNOW THE DIFFERENT KINDS OF IMAGERY Trademark Imagery Starbucks : Green & black medallion, colour of coffee bags, and dark wood counters Kodak : Yellow box Disney : Walt Disney, theme parks, Mickey Mouse Product Imagery Starbucks : Taste Diet Coke : Taste with just 1 calorie Kodak : Speed of film and quality of pictures Disney : Clean, wholesome entertainment
<ul><li>Associate imagery </li></ul><ul><li>Official supplier to the Springboks (etc) </li></ul><ul><li>Pepsi : Michael Jackson </li></ul><ul><li>User Imagery </li></ul><ul><li>Vitamins : Old people kayaking </li></ul><ul><li>Fashion models always thin </li></ul><ul><li>Usage Imagery </li></ul><ul><li>Mrs Balls : Can you imagine ….? </li></ul><ul><li>Coke : (Mexico) with Lunch or food </li></ul><ul><li>Formula for positioning success : </li></ul><ul><li>Define </li></ul><ul><li>Overdeliver </li></ul><ul><li>Claim </li></ul><ul><li>Succeed </li></ul>
<ul><li>Positioning the competition means defining the rules of the game in </li></ul><ul><li>the marketplace </li></ul><ul><li>Narrow your competitors positioning to a single trait or quality and </li></ul><ul><li>simultaneously broaden yours </li></ul><ul><li>Consumer behaviour does not happen in isolation. Watch the world, </li></ul><ul><li>not just your market. Understand your consumers total environment : </li></ul><ul><ul><li>Economic </li></ul></ul><ul><ul><li>Political </li></ul></ul><ul><ul><li>History </li></ul></ul><ul><ul><li>Social trends </li></ul></ul><ul><ul><li>Fads </li></ul></ul><ul><ul><li>Fears </li></ul></ul><ul><ul><li>Entertainment </li></ul></ul><ul><ul><li>Climate </li></ul></ul><ul><ul><li>Major news </li></ul></ul>
If you don’t tell consumers how to choose, they are not going to. Even if your product is not that different, better, or special, it’s the job of the marketer to make people think its different,better & special Beware of consumer communism : they buy what everyone else is buying. If don’t specify the criteria for choosing, consumers will develop their own , which is dangerous. If people are fasting during the day, sell to them at night (Ramadan) Change the dialogue : Eg, in Detergents : What cleans best Concentrate, better cleaning with easy to carry ] Easy to use liquids What cleans best
Goodwill counts : Instead of wringing the last dollar out of me now, make sure I will come back If marketing has done a really good job, consumers will be suspicious of anyone else who comes along ASK THE CONSUMER TO BUY YOUR PRODUCT ! Learn from the infomercial hard-sell. Setup : the reason for the product Delivery : the reason to buy Punch line : Buy it please ! You don’t want “virtual consumption” , people who love you but never buy you. People need reasons to buy. Coke was old, well known and stable - sales took off because we gave consumers in more segments more reasons to buy it.
“ Always Coca-Cola” provided 35 different attributes or dimensions that we used to convince customers to buy Coke. 35 different ways to see the brand. 35 different TV commercials were shot. Every time you watched TV you saw that Coke was refreshing,sociable, trendy, reliable, smart, cool, modern, funny, emotional, simple,large, friendly, consistent, everywhere etc etc. It worked. Sales lifted from 10 billion to 15 billion cases per year over 5 years. If I drink Coke for refreshment, I will drink Coke. If I drink Coke for 10 reasons, I will drink a lot more Coke Give consumers more reasons to sue your product. And more. And more.
Segment the market between heavy users, occasional users and heavy users of your competition, and target each to move to heavy use. Marketers who claim they are in mature markets are just being lazy. Anytime someone starts understanding your product, its time to re-invent it Existing markets tend to produce better results than new markets, because you already have brand awareness When people are confused and don’t know what to think, it’s a great time to tell them New products must do something new.The only reason to introduce new products is to make money.
New products can bring in a lot of new volume, but never make money. Remember you’re not in the volume business, you’re in the profit business. Zero-base you thinking - act as if you are just entering the market Manage creativity. Define the required outcome, and then hold the creative session. The future of marketing lies in establishing it as a professional discipline that is based on sound business principles and that produces sound business results. Marketers must be professional with specific skills that you need to find and pay for. Hire the best, then find them a job .
Unfortunately, companies often give, and employees expect, rewards for good consequences, but no punishment for bad ones. Everything you do in marketing has consequences. The person who produces these consequences should be rewarded or punished for them Marketing is a function that belongs to everyone in the company. Every contact consumers have with the company impacts how they feel about you. As far as I can tell, the only thing that most cross-functional teams produce is increased consumption of sandwiches. It is marketing’s responsibility (and no one else’s) to come up with the strategies and tactics.
Advertising can sell products. If good advertising works, there is no need to settle for, or pay for bad advertising. The only reason to do advertising is because it does sell products. Otherwise, it’s pointless. Ad agencies go to Cannes and get their friends and colleagues to judge their own ads, and that is how they get public recognition. They compete and judge themselves on attributes that are totally irrelevant to what the clients need, which is to sell products. Glitz, creativity and production values became the tests of good advertising, and they left effectiveness out of the equation. Advertising is not about image and hoping that sales come later. Good advertising must sell stuff .
Strategy belongs to the company, not the Ad agency. Agencies can never make smart, fully informed business decisions because they are never going to be fully informed. It’s the client that figures out what to say and the ad agency that figures out how to say it most effectively. Selling is about differences. Use different agencies for different needs. I stopped paying advertising agencies commissions and started paying fees for work done, with a bonus system on the basis of their contribution to the growth of the business.
THE END OF MARKETING AS WE KNOW IT This is Sergio Zyman , Former Chief Marketing Officer, Coca-Cola Company He took Coca-Cola from a market value of $ 56 m to $ 193 m , a growth of 245 % in just 5 years, and increase their sales volume by 50% during the same period/ This is what he says about marketing ..….. EXECUTIVE SUMMARY
The Principles of New Marketing <ul><li>The sole purpose of marketing is to sell more to more people, more often, and at higher prices. There is no other reason to do it. </li></ul><ul><li>Marketing is serious business, and increasingly, serious business is about marketing </li></ul><ul><li>Marketing is not magic, and marketers do themselves no favours when they pretend it is. There’s nothing mysterious about it. </li></ul><ul><li>Marketing is a professional discipline. You can’t leave it to your Uncle Willie or anyone else who isn’t a trained professional. </li></ul><ul><li>The marketplace today is a consumer democracy. Consumers have options, so marketers have to tell them how to choose. </li></ul><ul><li>Plan your destination. Make it where you want to be, not where you think you can get. </li></ul><ul><li>Once you have a destination, develop a strategy for getting there. </li></ul>
The Principles of New Marketing (cont’d) <ul><li>Strategy is the boss. Never forget it. Strategy is what controls the “everything” in “everything communicates”. You can decide to change your strategy, but you can’t deviate from it. </li></ul><ul><li>Marketing is a science. It is about experimentation, measurement, analysis, refinement and replication. You must be willing to change your mind. </li></ul><ul><li>Figure out what is desirable and make that what you deliver; or figure out what you can deliver and make it desirable. But, remember the former is a lot easier than the latter </li></ul><ul><li>Measure each brand and each marketing region. Do it at least monthly. Marketing must create results. </li></ul><ul><li>Ask questions. Be aware, insatiably curious, and creative. Creativity really is a process of destroying old ideas, but that’s OK. Every day is a new day. </li></ul>
The Principles of New Marketing (cont’d) <ul><li>Sameness doesn’t sell. The value of your product will be determined by its differentiation from the competition in ways that are relevant to the consumers. </li></ul><ul><li>Build your brands by using all the elements of image : Trademark image, product image, user image, usage image, and associative image. </li></ul><ul><li>Use the right yardsticks : focus on profit, not volume; on actual consumption, not share of market; and on share of future purchases, not brand awareness. </li></ul><ul><li>Keep giving your customers more reasons to buy. You need them to come back more often and to buy more at higher prices. </li></ul><ul><li>Market locally. You have to give all your customers something that appeals to them personally. Global brands are built out of many strong local brands </li></ul>
The Principles of New Marketing (cont’d) <ul><li>Fish where the fish are. Concentrate your sales efforts on consumers who are willing and able to buy your products. Segment the market to help you identify your mots profitable targets. </li></ul><ul><li>It is significantly easier to increment behavior or broaden behavior than to teach or change behavior </li></ul><ul><li>Think S.O.B. - Source of Business - where will your next sale and dollar of profit come from ? </li></ul><ul><li>Don’t be blinded by visible demand. Preference is perishable. Keep selling the sold. </li></ul><ul><li>Make sure everybody in your organisation understands the strategy, the destination, and the business objectives. Then let them execute. </li></ul><ul><li>Find the best available marketing professionals and create jobs around them. You’ve got to have the best people, not the best organisation chart. </li></ul>
The Principles of New Marketing (cont’d) <ul><li>Reward excellence and punish mediocrity </li></ul><ul><li>Strategy is your job. The job of the ad agency is to communicate it effectively. </li></ul><ul><li>No single agency can satisfy all of the needs of all of your brands. One size definitely doesn’t fit all. </li></ul><ul><li>Pay well so your agency have the resources to attract good talent, but demand results that are clearly measurable. </li></ul><ul><li>Have a sense of urgency, and work with passion. Otherwise, what’s the use of getting up in the morning ? </li></ul>“ A lot of these things may seem obvious. But when you start implementing them in the marketing world, where the traditional standards have been mystery and magic, you are going to be considered a revolutionary. So be prepared and keep your sense of humour when people start poking at you. They started calling me the Aya-Cola. But I was going to get the last laugh, because while they were clinging to the past, I was going to build a new future. And I was going to get there way ahead of them.” Sergio Zyman