A TCI Book Review

The End of Marketing As We Know It

Sergio Zyman
HarperBusiness, New York, 1999, ISBN 0-87730-986-0

Zyman is the former head of marketing at Coca Cola, and has been dealing with consumer products and advertising agencies all of his professional life. This is a world where "marketing" is an activity conducted by mysterious wizards who conjure up grand concept ideas for product campaigns. These campaigns are creative works of art - indecipherable to mere mortals, but which win awards and the admiration of other marketing wizards. They may not necessarily sell product directly, but thatąs OK because they are helping to generate image and brand awareness.

Zyman rejects all of this as so much hogwash. His main point is that marketing is not some mysterious black art, but rather a scientific activity that should be directly tied to sales results. Rather than a cost, marketing should be seen as an investment in future sales. Accordingly, when times are lean, marketing is the last, not the first, thing that should be cut back.

The 'old style' of marketing is dead, he says, and hence the title of his book. The 'new style' will be marketing by results marketing as a science, not an art.

Zyman was the guy in charge of the 'New Coke' campaign. He maintains that, far from being a failure, the campaign was a great success, albeit not in the way that he had originally thought. 'New Coke' was introduced, you may recall, as a response to all the Pepsi ads that were running, encouraging people to take the 'Pepsi Challenge'. This research was showing that many people preferred the slightly sweeter taste of Pepsi. Faced with eroding market share, Coke decided to re-formulate the product in order to win customers back. The resulting unexpected public outcry against the new formula was extremely strident and vocal, causing the company to retain and re-market the original product as 'Classic Coke'. Eventually, 'New Coke' disappeared altogether. According to Zyman, the whole experience caused many drinkers to re-affirm their allegiance to Classic Coke with the result that market share increased again. So, he concludes, the campaign worked just in a different way than they thought it would!

Another story he tells is how he re-negotiated the compensation arrangements with Coca Colaąs ad agencies getting them off a straight commission arrangement, and onto a salary (of people on the Coke account) plus profit percentage plus bonus (if warranted by results) basis. He also abandoned the practice of having just one full-service agency handle the entire account, in favour of having several agencies in charge of specific portions of the account. This of course, caused great consternation among the New York agencies, and he made many enemies. But, the types of arrangements with agencies that he pioneered at Coke are becoming increasingly common (or so he says).

The book is full of entertaining anecdotes like these. One gets the impression that Zyman was (and I guess still is) an iconoclast who has made perhaps more than the usual share of enemies in the business. He definitely has strong points of view.

Towards the end of the book, he summarizes his philosophy. His 'Principles of New Marketing' are as follows:

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.
Marketing is serious business and increasingly, serious business is about marketing.
Marketing is not magic, and marketers do themselves no favour when they pretend that it is. There is nothing mysterious about it.
Marketing is a professional discipline. You canąt leave it to your Uncle Willie or anyone else who isnąt a trained professional.
The marketplace today is a consumer democracy. Consumers have options, so marketers have to tell them how to choose.
Plan your destination. Make it where you want to be, not where you think you can get.
Once you have your destination, develop a strategy for getting there.
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 canąt deviate from it.
Marketing is a science. It is about experimentation, measurement, analysis, refinement, and replication. You must be willing to change your mind.
Figure out what is desirable and make that what you deliver; or figure out what you can deliver and make that desirable. But remember, the former is a lot easier than the latter.
Measure each brand and each marketing region. Do it regularly and often, at least monthly. Marketing must create results.
Ask questions. Be aware, insatiably curious, and creative. Creativity is really a process of destroying old ideas, but thatąs OK. Every day is a new day.
Sameness doesnąt sell. The value of your product will be determined by its differentiation from the competition in ways that are relevant to the consumers.
Build your brands by using all the elements of image: trademark image, product image, user image, usage image, and associative image.
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.
Keep giving your customers more reasons to buy. You need them to come back more often and to buy at higher prices. [A concept Zyman calls dimensionalizing]
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.
Fish where the fish are. Concentrate your sales efforts on consumers who are willing and able to buy your produce. Segment the market to identify your most profitable targets.
It is significantly easier to increment behaviour or broaden behaviour than it is to change behaviour.
Think S.O.B. Source of Business; where will your next sale and dollar of profit come from?
Donąt be blinded by visible demand. Preference is perishable. Keep selling the sold.
Make sure everybody on your organization understands the strategy, the destination, and the business objectives. Then let them execute.
Find the best available marketing professionals and create jobs around them. Youąve got to have the best people, not the best organization chart.
Reward excellence and punish mediocrity.
Strategy is your job. The job of the ad agencies is to communicate it effectively.
No one single agency can satisfy all the needs of your brands. One size definitely doesnąt fit all.
Pay well so your agencies have the resources to attract good talent but demand results that are clearly measurable.
Have a sense of urgency, and work with passion. Otherwise, whatąs the use of getting up in the morning?"

The End of Marketing As We Know It is very entertaining, and contains some valuable marketing insights. Even absent the sensible marketing advice, it is worth reading for the insight it contains on a very colourful character indeed in the marketing biz all too rare an animal.

THE TCI MANAGEMENT CONSULTANTS RATING:

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