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Brand Management

The Birth Of Brand Management

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Happy birthday reader! Yes, I know you weren’t born on this date. I am referring to a professional anniversary not a personal one. May 13th is a very auspicious date for all of you who manage brands because it’s the day that our profession, brand management, was born.

To understand the importance of today’s date we must travel back in time. Past the first Interbrand valuation in 1988, beyond the early branding research of Professor David Aaker in 1970, beyond Al Ries and Jack Trout’s  introduction of the ‘Positioning’ concept in 1969 and back to 1931 and a beautiful Spring morning in Cincinnati, Ohio. Specifically, we need to head over to the corner of Sixth and Main Street and into the office of a tall, twenty seven year old promotions manager by the name of Neil McElroy. (Pictured in the center, later in life as U.S. Secretary of Defense)

As we watch him at his desk, typing furiously, he looks like any other young manager. But McElroy is a rising star at P&G. It’s only been six years since he joined the company as a summer intern. In that time he has risen from a job in the mail room to become a key member of P&G’s advertising team. His boss, R. R. Deupree the President of P&G, is already keen on the idea of developing separate branding teams within the P&G portfolio. But he has asked McElroy, who is seen as one of the best marketing minds in the company, to flesh out the idea and formalize it. It is this task that now occupies McElroy and his trusty typewriter. The memo now emerging before our eyes is about to initiate a completely new organizational role and signal a revolution in marketing management. Neil McElroy is about to invent brand managers.

His memo actually proposes “brand men”. But the seven point description of the proposed duties for this new role that follows is unmistakably that of a brand manager. McElroy suggest that the new role includes full responsibility for packaging and advertising decisions. Equally important, “brand men” should also meet with regional sales teams and work with them to ensure the marketing plan for a brand is executed correctly in the field. Brand managers should also analyze sales and develop marketing plans and then monitor their progress using appropriate research methods. And they should not do all this alone – but with the support of a team of market researchers and assistants also dedicated to a specific brand.

Perhaps most radical of all, the memo also recommends that each brand team should have the independence to openly compete with other P&G brands in the same category.

McElroy had already witnessed first-hand how bigger brands at P&G would often take all the resources and focus away from smaller, new launches and he was concerned this would eventually render P&G vulnerable to other competitors. As a result of his memo, P&G brands would learn to compete just as voraciously with each other as with external threats – thus protecting the long term health of the company as a whole.

It was a memo that would eventually change P&G, then its competitors, and eventually the whole field of marketing. And yet, for many organizations, the principles laid out in the McElroy memo would be as challenging and inconceivable today as they were seventy-eight years ago when they were first aired. Lets be honest about the state of modern brand management. For every well-managed brand, there are at least half a dozen that fail to meet their potential because of shoddy brand management.

There are the brands being managed by sales-oriented managers who do not understand the difference between marketing and sales and who are making short-term profits at the expense of the longer term success of their brand. There are the brands struggling to survive because there are simply too many within the portfolio and not enough distinct, dedicated brand managers around to manage each brand properly. And perhaps saddest of all, there are the brands whose management has been outsourced to an ad agency because the owners simply do not have the knowledge to build brand or the resources to hire someone who can. Instead of a full spectrum of brand management – these brands will be given plenty of communications strategy but little else.

The McElroy Memo is now a priceless antique in P&G’s corporate archive. But for lesser firms still unaccustomed to proper brand management the memo represents three pages of valid strategic advice that is as vibrant now as it was back in 1931.

30 Seconds On…Neil McElroy, Father of Modern Brand Management

Having drafted his memo, McElroy spent the ensuing years helping to establish his “brand men” within P&G. One of the major obstacles was the sales force at P&G who “looked at the brand men as a bunch of young college boys who were just fiddling around”. McElroy helped train his teams to ‘market’ their ideas to the sales force.

Seventeen years after writing his famous memo, and aged only 43, McElroy replaced his boss Deupree as President of P&G in 1948. Under McElroy’s leadership many of the characteristic strategic traits of P&G took shape including an overt focus on market research and a growing interest in expansion into international markets.

In 1957 McElroy left P&G to become Secretary of Defense in the US Government at the request of President Eisenhower. Six days after taking the post the Soviets launched Sputnik and McElory spent most of his term allaying the threat of Soviet superiority. This was partly achieved with the foundation of NASA to which McElroy was a guiding force.

After completing his service to the country he was awarded the Medal of Freedom and returned to his beloved P&G, this time as Chairman of the Board.

The McElroy Memo

Brand Man

1. Study carefully shipments of his brands by units.

2. Where brand development is heavy and where it is progressive, examine carefully the combination of effort that seems to be clicking and try to appeal this same treatment to other territories that are comparable.

3. Where brand development is light:
a. Study past advertising and promotional history of the brand: study the territory personality at first hand–both dealers and consumers–in order to find out the trouble.
b. After uncovering our weakness, develop a plan that can be applied to this local sore spot. It is necessary, of course not simply to work out the plan but also to be sure that the amount of money proposed can be expected to produce results at a reasonable cost per case.
c. Outline this plan in detail to the Division Manager under whose jurisdiction the weak territory is, obtain his authority and support for the corrective action.
d. Prepare sales helps and all other necessary material for carrying out the plan. Pass is on the districts. Work with salesmen while they are getting started. Follow through to the very finish to be sure that there is no letdown in sales operation of the plan.
e. Keep whatever records are necessary, and make whatever field studies are necessary to determine whether the plan has produced the expected results.

4. Take full responsibility, not simply for criticizing individual pieces of printed word copy, but also for the general printed word plans for his brands.

5. Take full responsibility for all other advertising expenditures on his brands (author’s note – in-store displays and promotions).

6. Experiment with and recommend wrapper (author’s note – packaging) revisions.

7. See each District Manager a number of times a year to discuss with him any possible faults in our promotion plans for that territory.

This thought piece is featured courtesy of Marketing Week, the United Kingdom’s leading marketing publication.

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1 Comment

Ricardo Meirelles on May 13th, 2009 said

Happy Birthday for us!

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