P&G’s restructure – the ‘end of marketing’ or the beginning of ‘brand asset management’?

P&G Beauty and Science Brands

Proctor & Gamble has recently caused quite a stir in the marketing world with a global restructure that, as reported by the UK’s Marketing Magazine, “abolishes the term ‘marketing director’ and renames the marketing organisation as ‘brand management’”.  As a result of this, its senior marketers across the globe will now be known as brand directors or associate brand directors.

According to Ad Age, “Brand Management at P&G now encompasses four functions – including, of course, brand management (formerly known as marketing), consumer and marketing knowledge (a.k.a. market research), communications (known as public relations at some companies and up until a couple of years ago as external relations at P&G), and design (known as design pretty much everywhere, except where it’s called visual brand identity and such)”.

The stated reason for all this is to create “single-point responsibility for the strategies, plans and results” for each of the company’s brands.

While this could be seen as simply an exercise in semantics, the potential significance of this change from the world’s biggest advertiser led both the above publications to – with a touch of sensationalism – announce “the end of ‘marketing’” at P&G.

Towards a focus on total brand value

What we can learn from cats by David Blackwell, Flickr

This said, the implications of the move may indeed prove to be far reaching.  Especially as it’s coming from an organisation that’s been at the forefront of marketing literally since the discipline came into being, and has ever since been a perennial first mover with new strategic, creative and media initiatives.

So for some P&G’s elevation of ‘brand management’ signals a paradigm shift in the marketing landscape.  While mainstream marketers have mostly held the view that marketing is the umbrella discipline that sits over brand management, over the past decade ‘brand advocates’ have been making the case for an updated and expanded view of brand management to be the master discipline.

A Brand Strategy Insider post on P&G’s moves sums up this argument with the following points:

“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…[with] goals…often measured in volume and sales”.  (This admittedly understates the scope of the discipline – notably omitting portfolio management and product development – but does capture the fact that the focus of marketing has become mainly about selling things; and nowadays typically in short time-frames).

In contrast, it argues that brand management has evolved from a historic focus on identity management to now being “much more concerned with the active management of the market value and competitive strength of a brand as an (intangible) company asset…[with a] focus on how products continue to wrap story and distinction around what they offer to increase competitiveness and build loyalty…for the contribution they make to the balance sheet”.

Or seen another way, the primacy of the new brand management will see “Total value… overtake revenue as a key driver for brand teams…[which] will in turn evolve how brands are strategised and what and where they communicate”.

So where has marketing gone?

Some of this may sound a lot like what marketing is supposed to be about, or more specifically strategic marketing.  But the reality is that under pressure from increasing retailer power, private label, on-line sellers and/or aggregator sites, many marketing departments have been doing far less ‘marketing’.

As no less an observer than Philip Kotler – the man who wrote ‘the’ (text) book on modern marketing – has despondently pointed out:

  • Most marketing departments are engaged in brand‐maintenance instead of brand building.
  • Company marketers spend only 15‐30% of their time doing true marketing activities. The rest of the time is spent on forecasting volume, securing approvals on label artwork, checking manufacturing schedules, and doing routine analysis.
  • Strategic marketing is missing in many marketing departments. Strategic marketing requires taking a 3‐5 year view of the business.

The deep rationale for P&G’s changes is unknown. So they may simply be a grand signal for its marketers to get back to the fundamentals of their discipline.

On the other hand, a new focus on managing the value of brands as key assets is more than likely.

Brand stories as business assets

P&G Thank you Mom 2012

After all, traditional marketing has been struggling in a digitally transparent, post-GFC world of more considered, cautious, cynical and aware consumers.  A world in which – according to various global monitors – our trust in brands has, on the average, been declining for well over a decade.

Also, as outlined in a previous post, we may be reaching a point where the lessons of the GFC lead senior management and shareholders to prioritise medium to long-term business performance over short-term gains.  In this scenario, brand stewardship and investment will be elevated to a new level of corporate importance.

Should this play out, then defining the ‘story’ a brand wants to tell and evolving how it is expressed across every point of contact with customers, and across every aspect of a business, will become paramount.  Rather than seeing brands as things that are tacked onto or wrapped around products, businesses will need to treat them as key intangible assets in their own right, with brand health metrics getting more air play on balanced scorecards and in board rooms.

This is, of course, not to say that there aren’t companies already doing this; at least to a degree and some for a long time. Coca-Cola has long been nurtured as a cultural symbol rather than a product. Apple is as much about human values as it is technology. What would Nike be without its belief system? What about Virgin without its ‘Robin Hood’ attitude? Or Cadbury if it wasn’t the flag bearer for ‘joy’?

Then there’s the raft of entrepreneur driven companies where the brand story has sprung forth at the same time as the product or service offer, and has evolved with it to play a lead role in their business success.  Take The Body Shop, Polo Ralph Lauren, Innocent drinks, Quiksilver, Method cleaning, Calvin Klein, Zappos, Dyson, Help Remedies, Kathmandu, Ben & Jerry’s, and so on.

The birth of brand asset management?

The potential significance in the P&G changes is not that they’re signalling brands should be treated as valuable business assets; as all consumer-centric businesses already know this.  But that one of the world’s marketing pace setters has decided to formally make ‘brand as the asset’ management its primary focus.

That this is the case is supported by the fact that Marc Pritchard, P&G’s top marketer and the man leading the change, now carries the title Global Brand Building Officer.

According to a recent profile, Pritchard is a strong believer in “brand building principles that serve people and make P&G brands indispensible in their lives” and is often quoted as saying “people may not think much about the products we make except the few minutes each day when they wash their hair, do their laundry, brush their teeth or wipe their countertop. But P&G brands are with people throughout their lives, making every day just a little bit better.”

It now remains to be seen if history records this as a watershed moment in the takeover of ‘marketing’ by ‘brand’.

Image Credits: Proctor & Gamble, Caroline, David Blackwell

:Espied | Espied posts are selected news items of particular relevance to brand management today.

Our blog aims to provide thoughts and insights into brand strategy, brand management and brand building for navigating a changing world.

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