MARKETING IN 21st CENTURY

Sergio Zyman’s Formula for Marketing in the 21st Century


Sergio Zyman is the chairman of the Atlanta-based marketing consultancy, the Zyman Group, which also has offices in Chicago and Mexico City, where Zyman was born. He has more than thirty years of high-level marketing experience at PepsiCo, Procter & Gamble and at the Coca-Cola Company, where he was Chief Marketing Officer. In the latter position, he saw Coca-Cola’s worldwide annual sales volume increase from nine to fifteen billion cases.


Zyman’s definition of marketing success is simple: “selling more stuff to more people more often for more money more efficiently.”


His books include: Renovate Before You Innovate: Why Doing the New Thing Might Not Be the Right Thing and The End of Advertising as We Know It, both co-written with Armin Brott; Building Brandwidth: Closing the Sale Online, co-written with Scott Miller; and The End of Marketing as We Know It.


On September 29, Emory University's Goizueta Business School celebrated the one-year anniversary of the Zyman Institute of Brand Science, whose ongoing mission is to “pursue the advancement of brand driven business performance.” Working collaboratively with sponsors, other universities, research organizations, and institute members, the Zyman Institute devises cross-disciplinary solutions for managing real world problems in brand strategy.


Zyman himself is always on the go, in demand both as a speaker and as a consultant. Knowledge@Emory recently caught up with him before the launch to ask about the science of advertising, changes in the ethnic and demographic composition of the U.S. market, and the impact that the web is having on brand promotion.


Knowledge@Emory: You’ve argued that advertising should be seen as a science and not an art. Isn’t it important that ads combine both?


Zyman: Advertising has one job—to get more people to buy more of what is being advertised. Without demanding that your advertising first generate results, all you may be doing is allowing your agency to artistically enjoy themselves at your expense.


Does this mean art cannot reside in great advertising? Absolutely not. The current I-Pod campaign is awesome on so many levels. So when the two co-exist, truly fantastic things occur. But you must first demand a return on marketing investment (ROMI), then judge it on artistic merit.


Knowledge@Emory: One of the five key elements of building “brandwidth," which you cite in your book Building Brandwidth: Closing the Sale Online, now almost five years old, is that "your brand is defined in your customer's perceptions." Given the explosive growth of web advertising in the years since, and the continued growth of ad penetration into every aspect of daily life (flat screen monitors pumping out ads on supermarket checkout lines and in hotel elevators, for example), what can savvy marketers do to “rise above the noise”?


Zyman: One. Elevate the brand expectation, then deliver on that via the brand experience. That increases your brand’s value and, perhaps most importantly, increases brand loyalty. With so many options to choose from, and so many messages bombarding consumers at every corner, this is critical to staying above the noise.


Two. Fully understand the consumer involvement with your category. If you’re in a high-involvement category where consumers seek your brand (i.e., cars), you need to make the brand expectation and delivery (experience) as high as possible. If you’re in a low-involvement category where your brand seeks consumers (i.e., milk), the same philosophy also exists. But success in low-involvement categories is often more dependent on distribution, brand alliances/partnerships, and other factors outside your control. Developing and leveraging strong relationships with these entities becomes critical to regaining some of this lost control.


Three. Explore new targets and opportunities. Our Hispanic population possesses over three quarters of a trillion dollars in spending power. Yet most marketers do not fully realize the opportunity right under their noses.


Knowledge@Emory: John Johnson, the recently deceased founder of Ebony and other publications focused on an African-American audience, was one of the first people to establish, and to capitalize on the fact that there was a rich market to be tapped in the minority community. Many companies produced their first ads using African-Americans to target consumers for Johnson’s publications. In recent years, there has been a growing focus on marketing to Latinos in the U.S. Is there a point at which these strategies risk Balkanizing rather than expanding markets?


Zyman: Absolutely not! Brand activation of a national strategy can take many forms. For example, Coca-Cola is all about “authenticity.” What is authentic to the African-American community is vastly different from what’s authentic to the Hispanic community, the Korean community, and other demographics. But when you personalize that experience accurately against each segment, you can succeed against each segment. When you develop strategies and tactics that are averaged across all your demographic targets, then your results will be average.


Knowledge@Emory: Marketing to Mexican-Americans is not the same as marketing to Puerto Ricans, which is not the same as marketing to Cuban-Americans. How finely targeted do you feel marketing to Latinos in the U.S. should be to be effective?


Zyman: As I mentioned above, it’s all about ROMI. You must first understand the opportunity within each sub-segment, do your scientific analysis, and invest accordingly. If the expected return does not pay out, then don’t go to the expense of finely targeting and activating your marketing effort.


Knowledge@Emory: The makers of Sprite started an ad campaign a few years ago, still reverberating and being retooled in some markets, whose tag line was “Obey Your Thirst.” It targeted the youth market by arguing in effect that other beverages were focused on trivial and diversionary matters of image and that kids who weren’t fooled by this sort of trickery should drink Sprite as a matter of authenticity. Of course the idea of beverage-based authenticity then came under attack. How does one appeal to an increasingly jaded youth market?


Zyman: What attack? But you’re right, childhood has changed and so have children, and today’s youth must ferret through a deluge of marketing messages–much of which is junk. And it’s only going to get worse. That said, you must speak the truth and you must speak authentically. They seem quite immune to poorly executed over-promises, so don’t do it.


Knowledge@Emory: Most Hondas sold in America are now built in the US. Many Japanese consumer goods are now made in lower wage Asian countries. What does “Japanese quality” mean when “Japanese” products aren’t made in Japan? In a related vein, what impact do you see globalization having on brand loyalty?


Zyman: As long as the association continues to equate “Japanese” with “quality,” it doesn’t matter where the product is manufactured. But when Japan off-shores its manufacturing, they must do an even better job of brand delivery and reputation management. Because when brand delivery (experience) starts to falter, the bad PR avalanche can bury you—especially if it undermines a core preconception. This applies to any brand, regardless of its origins.


Knowledge@Emory: Do you see the growing influx of inexpensive and increasingly sophisticated goods from places like China eroding brand loyalty?


Zyman: No. I see quality brands enjoying strong loyalty being made in China. Again, a brand is the amalgamation of consumer experiences—not the product itself. As long as the product fulfills the brand promise, its origin of manufacture should not matter.


Knowledge@Emory: In last year’s Renovate Before You Innovate: Why Doing the New Thing Might Not Be the Right Thing, you argue that companies often, to their detriment, scrap venerable products and opt for the new, when they simply should be retooling the tried and true. Isn’t there a tipping point, where companies have to recognize that the landscape has changed and they have to change with it? Some analysts have argued, for example, that the railroads doomed themselves by thinking like rail companies rather than transportation companies.


Zyman: You’ve made my point. Had they thought of themselves as transportation companies and leveraged their core competencies into a broader frame of reference, rail companies could have easily expanded their brand into shipping, bussing, airlines and more. By expanding your frame of reference and staying relevant against your consumer, you can go places you’ve never thought.


Sony used to be the only name in portable music and should have introduced the world to the MP3 Player. Instead, they stayed focused on the Walkman (product) and not the category (portable entertainment). Now what was the domain of Sony is now Apple’s.


Knowledge@Emory: Google’s Gmail, recently out of beta and now in general release, scans a user’s email and targets ads based on cues found in the text. Search engines often do something similar, tracking where users search to refine the ads they are fed. Do you see this kind of tightly targeted and more personalized advertising as the wave of the future? Do you have any privacy concerns about this approach?


Zyman: Do I like it? No. Can anything be done about it? Probably not. The walls of privacy were demolished long ago. If companies find this method of marketing to pay-out, then it will continue. Good marketers should always heavy-up what works, and discontinue what does not.


Where Google may be at risk is taking a key reason for its past success–empowering consumers to freely search and surf without bias–and undermining that freedom with the drag of pop-ups and junk mail. I’d hate to ever view Google as annoying. And they could be at risk of doing just that.