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Brand Management

Why Brand Management Will Replace Marketing

by

P&G Brand Management

P&G’s decision to formally end the era of “marketing” at the company and make the shift  to brand management may accelerate what amounts to much more than a title change for marketers generally. To me, it could point to a fundamental re-examination of the role of the people responsible for brands.

While “marketing” and “brand management” are often treated as synonyms, there is an important distinction between the two terms. Marketing focuses on the activities associated with the promotion and distribution of products and services. Brand management has, for many, been historically focused on identity management but is now much more concerned with the active management of the market value and competitive strength of a brand as an (intangible) company asset.

Marketing is about spending money. It’s how brands accumulate value. Brand management  should focus on how products continue to wrap story and distinction around what they offer to increase competitiveness and build loyalty. The two are linked – but different. Marketing is the means. Brand management should be the goal.

Perhaps we shouldn’t be surprised that the break-away from a pure marketing function should come from the company that pioneered brand management itself. According to Eric Schulz, P&G were the first to recognize, and act on, the cannibalization risk of their own portfolio approach. “By distinguishing the qualities of each brand from all other P&G brands, each would avoid competing with one another by targeting different consumer markets with a different set of benefits,” he explains. “This was especially important in product categories that the company manufactured several competing brands, like laundry detergent.”

P&G is still renowned for its deeply product-centric approach. No surprises. On any given day, around the world, three billion people will interact with a Procter & Gamble brand.

But the decision to now move on from having marketing directors (a term P&G have been using since 1993 and that itself replaced the term “advertising directors”) indicates to me that for a scaled house of brands, the competition to ‘stand for something’ might be increasingly globally rather than regionally driven and that the focus could be shifting away from  promoting products to driving up overall perceived value of the brands individually and as a portfolio.

In time that has the potential to shift the criteria for success. Marketing goals are often measured in volume and sales. When you think about brands as assets however, success becomes a broader idea and the focus is less on how they are being managed and much more on why they are being managed – for the contribution they make to the balance sheet.

To me, a future responsibility of the CMO (and a very good reason to improve relations with the finance team) lies in directing how brand managers help to appreciate these assets; how they lift not just topline value through demand generation but also underlying overall corporate value. According to CoreBrand, companies like P&G are only now starting to realize that they are leaving billions of dollars in potential corporate brand value on the table by not directly linking their corporate brand to the collective brand equity value of their portfolios. CEO James Gregory makes the point that, “When done well, corporate branding and product branding should appear seamless. I predict the next ten years will see spectacular combined campaigns from the leading consumer companies. P&G’s “Thanks Mom” campaign … was just the beginning of this trend.” His opinion reinforces my own view that in order to gain the most value from their brands, companies need to tell all their stories.

All of these motivations are conjecture in the case of P&G. I have no way of knowing if any of these agendas is behind their decision. But there are some things that seem much more certain. Total value will overtake revenue as a key driver for brand teams; advertising is still important, but not as singular to the role as it used to be; and collaboration (even some level of integration) with the data and finance teams seems highly likely. Add in mobility … and things at the bottom of the tea cup really start to cloud over. The ripple effects of those changes, and the many others we haven’t even anticipated yet, will in turn evolve how brands are strategized and what and where they communicate.

Here’s the good news. If your current role is in marketing, there’s probably no huge rush to change your business cards. Brand management may be the emerging black, but it still has some way to go in terms of widespread traction. Observes Ad Age, “P&G seems well out in front of the rest of the marketing world — or what used to be known as the marketing world — on this. A search on LinkedIn shows nearly 73,000 marketing directors and associate marketing directors … but only 1,350 brand directors or associate/assistant brand directors.”

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8 Comments

Hilton Barbour
Twitter: ZimHilton
on July 03rd, 2014 said

I’m heartened by this move which, IMHO, merely codifies a P&G stance they’ve had for several years. The marketing function sadly still reflects a reliance on Communications, versus marketing in its truest/broadest sense. MarComms people are NOT marketing people though, in too many organizations, they’re considered as such.

As you rightly point out, this puts these individuals squarely in the hot seat for genuine, all-encompassing strategic direction. Not just the “deployment” parts of that equation – the 4 P’s. Considering former P&G chairman AG Lafley laid out this imperative in his excellent book “Playing To Win”, I’m very happy to see this put into practise.

Mahdi AlHusseini on July 04th, 2014 said

Great article! and always agreed with the difference between “marketing” and “brand management” which is clear when you compare different companies of different sizes & focuses. P&G created “brand management” from the beginning but didn’t create “marketing” which makes sense to go with this move.

The important restructuring & clarifying needed is to clear out how “brand management/team” interacts with “Trade Marketing” which in some companies “Trade Marketing” reports into “Sales Directors” & some are into “Marketing Directors”. The confusing thing for me is that in P&G currently, most “Assistant/Brand Managers” are considered as “Brand team” while all they do is “trade marketing” activities which leaves real “brand management” to regional/global brand teams.

and of course i agree with the “Cross brand & Cross category” branding & activities which simply builds on the “Power of One” and the basic ECON101 university course of “economies of scale” that not just build on sales KPIs, but also on Brand Equity ones.

Franklin Grippe
Twitter: Grippe_LLC
on July 04th, 2014 said

If it took a company like P&G this long to come to this conclusion, my guess is that it will be another 20 years for others to adopt this thinking.

Especially the companies where the head of “marketing” is some sales guy, engineer or otherwise, tasked with making brand-aware, cross-channel content, and visualization decisions.

Maybe I expect too much, but it seems like it is a rather small step.

The new brand-aware organization is so much more nimble, adaptable, scaleable, configurable, design-thinking aware, and understands the full context of brand thinking into more interesting and relevant packaging, content creation and execution.

Their sheer size definitely stabilizes them. But it also hides a lot of inadequacies.

Who will be the next Google or Amazon of consumer goods at the manufacturer level? Now that, would be a step.

It will be interesting to see what wins out.

Helmer Molenaar
Twitter: Helmer1979
on July 07th, 2014 said

How many brand managers nowadays are actually strategically managing the brand? It’s more a project management function.
There are less and less resources available to invest in the brand as such. Which is not surprising given the fact that people care less about brands every year. Brands are not what people want in the future from companies. People want companies to put their money where their mouth is and start offering them something tangible. Something that makes their lives easier, a service for example.

Glenn Myatt
Twitter: glennmyatt
on July 09th, 2014 said

Exactly why P&G have made this call may not be clear for some time. The reasoning may be no different to why it created ‘brand management’ in the first place – placing a holistic focus on the business’ most important assets. The distinction between marketing and brand management has been driven by increasingly short-term agendas and the demand for immediate sales, and brand managers with increasingly shorter tenures. The change may simply be a concrete signal to think brand value first, marketing second.

David Friedman on July 10th, 2014 said

I was looking forward to reading the article by Mark Di Somma and the comments I read were very positive. After reading the article I have some real concerns and frankly I found the article lacking in perspective in several areas.

Now maybe I should not be surprised. As they say, “to a hammer, everything is a nail.” Mr. Di Somma represents himself as a creative brand strategist and that perspective may color the content and context. That is fine when one recognizes that perspective. Certainly no one can disagree that marketing and brand are linked but aren’t the same. Yet, some of the points raised in the article are potentially erroneous.
First, until we actually see what P&G does, I would be hard pressed to say that they are abandoning marketing. Now, let’s think about where P&G fits into the economy. They are a CPG company yet the economy is (or has already) switched to a tech based company with the likes of Google, Amazon, Netflix, Apple and Facebook being the vanguard of the “new marketing.” So even if P&G changes their approach, I believe that would be interesting but not convincing that brand replaces marketing. In short, both exist and which takes precedence within a company depends on the market in which they compete, the stage of growth of the business, and the strategy that the company pursues.

A couple of points raised stuck in my craw however. The author points out that marketing is about spending money and that marketing “focuses on activities associated with promotion and distribution of products and services. Ok. That is part of it. But this minimizes the importance of marketing. About 20 years ago, marketing was about the 4Ps: product, place, promotion and pricing. So let’s not at least forget about the other two elements. However, the new marketing adds a few other Ps- especially in the tech world and in the service world. These Ps are product development, people (as the front line sales and support people affect the perception of the brand), and process. I raise these points because I find that many people still have a narrow perspective on marketing and I felt obligated to set the record straight- at least looking out from my own rose colored glasses.

Second, while it is true that marketing spends money, the CMOs that I know and who are really good business people, look at that marketing spend as an investment and look at the return of that investment at both the tactical level i.e., marketing program as well as the strategic level i.e. new product revenue, margin and support of the business plan. And in the tech world in which I am familiar, marketing has the role of brand maven as well so accretion of the brand asset value is also within the domain of the CMO. Again, perspective and context need to be considered.

I do believe that there are changes afoot in the marketing and branding world as evidenced by the plethora of articles written lately on the roles and capabilities. Whether brand takes precedence or marketing takes precedence is not the real issue for CMOs. Their task, in my opinion, is to be the linking pin from the outside world of the customer to the inside world of production of goods and services and integrate the various functions and use the correct traditional and digital tools to increase top line revenue, margins, and brand value. That is the real challenge they face and that requires a unique individual. What P&G does will, of course, be important because they are thought leaders of the CPG world. And we should also look at what the leaders of the tech and service sectors do as well because the economy has shifted to a digital and tech economy. One thing is for certain: marketing and branding will change over the next several years and it will be good for business and open up a new horizon for would be brand directors and marketing executives.

team-abr on July 14th, 2014 said

This is definitely a significant change, underlining the essence of brand management even for companies as big as P&G. While marketing was more inward looking, brand management to me would promote responsible marketing to some extent, because there will a brand reputation at stake, which sometimes is more important that the sales charts.

Simon Pearce
Twitter: simonpearcelive
on November 15th, 2014 said

Mark. Thanks for a thoughtful piece on this. I agree with a lot of the trends you are talking about in here. I see them happening too. My take on this is the following: Marketing is an activity, branding (in the form of bankable brand equity) is a goal. Historically, people thought of them as synonymous because marketing was the primary way in which a lot of brands sought to create brand equity. This is now changing in two ways. Firstly, the techniques and skills that constitute marketing are in a state of tremendous flux, so the definition of the activity of marketing has become unstable. Secondly, the importance of marketing as a stand-alone activity towards pursuing the goal of brand equity creation has changed. The lines between marketing activities that build brand value and other corporate activities that build brand value have blurred. In this situation, it makes little sense to organize your company around an activity (marketing); much better to organize around the goal (brand value) and free your people to pursue that brand value creation by any means necessary. Companies that understand this, and do this, sooner will outcompete those who are mired in unhelpful activity based silos where their very job title is driven by the need to pursue that prescribed activity, rather than pursue the broader goal of brand value creation. The shift at P&G is, as you point out, organizational complex, but intellectually simple: they want to focus more on outcomes and not get in their own way in doing so. Smart move, if they can pull it off.

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