Books & Publications
by Nettie Hartsock, June 2001
Part 1: Coca-Cola, gee whiz technology and consumer power
Hi Dr. Sealey, what a thrill to interview you. Can you tell us briefly about your background in global marketing?
The majority of my career was spent at The Coca-Cola Company, during which I held senior positions in virtually every business sector of that corporation, including soft drinks, wine, and filmed entertainment. I was appointed that company's first Global Marketing Director in 1990. As Senior Vice President of Global Marketing, I was responsible for the creation of the "Always Coca-Cola" global advertising campaign in association with Creative Artists Agency in Beverly Hills.
I have served as a management consultant for numerous firms including Sony New Technologies, Inc., Anheuser-Busch, Visa U.S.A., United Parcel Service, ImproveNet, Johnson & Johnson, The Eastman Kodak Company, A.T. Kearney, Inc., Nokia and Hewlett-Packard Company.
Is there such a thing as the new economy?
Yes. It is a service and information economy. The 20th century was defined by three economic forces: manufacturing, transportation/distribution and agriculture. In 1900, the two largest groups in that year's census were domestic workers and farmers. We built the industrial world by getting 3% per year productivity improvements in these three basic sectors. That is over.
Less than 10% of our workforce is now engaged in manufacturing and less than 3% in agriculture. We are now a service economy where the apex is the knowledge worker whose skills are portable and whose loyalty to a single firm is in doubt. We must now build our 21st century nation based on productivity improvements among knowledge workers and this is a whole new ball game. None of the old rules work. It is a new economy.
We know that some of the rules have changed, but what are the key areas that apply equally on- and offline, and have been neglected by dot com start ups?
The business model, especially articulating a clear business vision, customer benefit and sustainable competitive advantage, apply equally between bricks and mortar and the dot.com world. In my experience, the whole distribution plan and strategy has been the most neglected in the dot.com world. They simply expected the customer to come to them based on gee whiz technology.
What are the main changes and challenges that the Internet has brought corporations in terms of starting and managing the customer relationship?
Today's connected customer is demanding a 24/7 immediate response to questions, problems or requests. In certain important parts of their lives, they are seeking a relationship with firms that meet their important needs and not just sporadic communication.
You've said that the power has switched to the consumer, but is this power likely to wane again as corporations work out how to use the Internet to control the flow of information once more?
I don't believe so. Power is defined by information and choice and the connected consumer is gaining on both counts. The ability of corporations to "force choice" by geography, lack of knowledge or reduced options are all diminishing with the growth of the Internet and this trend is gaining ground.
Part 2: Brand, simplicity marketing and the innovative
How does a company where the product or service experience is, by definition, offline, use the Internet to brand?
Image and brand building now have to occur mostly off line. (I could not make a good Coke commercial for the Internet until I could make my target consumer laugh or cry.) So the Net today is focused more on the behavior and purchase side of the marketing equation.
This, however, will drastically change as Personal Video Recorders destroy TV as we know it today and as the Web goes broadband allowing true full motion sight and sound marketing.
Isn't the "new" role of the Internet in initiating more customer-oriented marketing simply reaffirming old (relationship) marketing principles, or is there something special that the Internet adds to marketing?
My definition of a brand is the capitalized value of the trust between a customer and a firm. This has not changed. However, how we build and enhance that trust is changed by the ways in which the Net allows us to enhance the relationship with a customer.
I give American Airlines permission to voice mail and e-mail me updates on my flights on the day of departure. I want that information and I trust American not to abuse it. My relationship is thus stronger today than when I had to call an 800 number to find out what was happening.
And can you talk about "Simplicity Marketing" and what it means in terms of how a company must market to its customers?
The focus today must be on making the consumer's life easier and less stressful. Brands that win in this decade will be the ones that provide these benefits in all kinds of areas.
When the corporations controlled marketing, not the consumer, they proliferated choice, options and categories that worked when we were one household wage earners and life was simple. Today, less that one in four US households is a traditional family – husband, wife and kids at home.
Today, two wage earner households are stressed for time and do not have the slack to save coupons, compare cell phone pricing plans or take a Saturday to go car shopping and visit four or five dealers. The problem is most marketers are stuck back in the old world while their customers have moved to a new pattern of living.
Is there a parallel between this idea of simplicity marketing and the growth of self-contained networks and all-in-one sites like AOL, Yahoo! and others, where the consumer is invited to take up residence in just a part of the Internet, and never needs to explore the rest?
Sure, AOL was a great execution of Simplicity Marketing. Don't worry about ISP's, browsers and the complexity of the Internet, just sign up with Uncle Steve Case and get all you need at one price in one location with no complexity. AOL is the Honda Accord of the Net. Not glitzy or high performance like a BMW but simple and reliable for the mass audience. The next step up is My Yahoo and then you get up to the techies who are really into the permutations of all Net technologies.
So given the dynamics of the Internet and technology change, can you really research it using conventional research techniques – by the time the results are published, everything's changed?
Researching the really new and innovative is the most difficult thing you can do. We can only relate to what we know. The Palm PDA would probably have researched very poorly because we would not have understood the real benefits.
Same with the Personal Video Recorders, they so transform the TV experience that it is difficult to convey the experience. These kinds of breakthroughs depend on passion, intuition and guts on the part of the innovator and on the word of mouth of the early adopters. Research does little here.
Thank you for all your insights!