Industry split on impact of P&G's switch from 'marketing' to 'brand' management

Several industry leaders applaud Procter & Gamble's decision to reposition marketing into centralised brand management, yet a former staffer claims it goes against customer centricity and could limit marketing's commercial responsibility

Procter & Gamble brands
Procter & Gamble brands

Several marketing industry leaders have applauded P&G’s decision to reposition marketing leadership into centralised ‘brand’ teams, claiming the move represents a welcome shift towards marketing as the orchestrator of customer experiences.

However, one former P&G staffer and respected Australian marketer has raised concerns that the decision rationalises strategy into global teams, leaves brand managers without commercial responsibility and in product silos, and could stifle local innovation.

Last week, P&G announced all marketing directors and associate directors globally will become ‘brand’ directors as of 1 July. According to AdAge, the move is part of an operational re-design announced in February, in which the marketing organisation becomes ‘brand management’ with “single-point responsibility for the strategies, plans and results for the brands," a P&G spokeswoman stated.

The brand management organisation will be housed entirely within global business units, rather than regional silos, and will cover four areas: Brand management (formerly marketing); communications, consumer and marketing knowledge; and design. The P&G spokesperson added the decision illustrates the broader role marketing directors have today.

Australian Marketing Institute (AMI) board member and founder of Lordsmith & Co consultancy group, Tara Lordsmith, saw the ‘brand’ director title as indicative of the growing trend for marketers to have clear accountability and ownership.

“No one else in the business can be responsible for the brand asset metric. Whereas digital, product development, pricing, portfolio management are often times shared with other parts of the business,” she told CMO.

“However, marketing is about shaping the future, not recording the past. So with that as a guiding light, marketers should be driving the health of the brands and the business.

“In my view, the title change is a reflection of the change marketing is going through and ambiguity about accountabilities.”

For CMO Council senior vice-president, Liz Miller, the changes say very little about the role of the marketing leader, and “more about a broken marketing machine trying to rebrand itself”. She was supportive of the decision, suggesting it reflected P&G’s attempts to centralise the marketing function so it can operate as the primary driver of customer experience.

“It is window dressing; an internal move to rally the troops around a fundamental shift in what marketing means and should mean for the company,” Miller claimed. “It is terrific P&G is getting its marketing in order. Communications, marketing, creative and insights/analytics should be under one roof, and all of the company’s ‘Ps’ – people, processes and platforms – should be connected and aligned under a single banner.

“The irony is that most of us see ‘brand’ as the more narrow narrative. If you look back to 2000, people with ‘marketing’ titles were really just being asked to oversee the brand in the sense of advertising and brand guideline compliance. We chalked customer experience up to a consistent and unified delivery of the logo and tagline. But we marketers have come so far since that limiting and narrow view.”

Miller highlighted the key functions being aligned at P&G -- brand management, consumer and marketing knowledge, communications, and design. “These are the functional groups that fundamentally make up modern marketing, and they are the functional groups working to develop and deliver on a clear customer experience strategy,” she continued.

“This is not reinventing the wheel, this is getting the wheels properly attached to the car. What this really reveals is how fragmented and siloed the ‘old’ system used to be.

“What P&G has done, and hopefully done effectively, has been to issue a customer-centricity rally cry that is being empowered by the very top of the organisation and will hopefully be embraced by groups far beyond ‘marketing’.”

However former Nestle CMO and now marketing consultancy founder, David Morgan, who was with P&G for 11 years globally and witnessed several functional title changes several times during his time with the organisation, disagreed the decision was about consumer centricity and labelled it "regressive".

He saw the change as signalling rationalisation and globalisation of brand development away from local teams and insights, diminishing their strategic role and commercial responsibilities, and leaving them purely in charge of marketing and communications.

Morgan highlighted two main concerns, the first of which is what the ‘brand director’ will be in charge of. In particular, he noted the absence of commercial and corporate marketing responsibilities in the newly defined roles.

“For me, this global ‘one size fits all’ brand development structure is the real philosophical issue,” he said. “It looks good on the balance sheet, as you can significantly reduce the number and quality of the marketing community, and costs of agency support communities, but it flies in the face of the local consumer-focused marketing teams that built P&G a very successful global business for over 150 years, and made P&G a very attractive and great place to work for top quality marketing talent.”

During his time at P&G, Morgan explained marketing teams were previously encouraged to spend as much of their time as possible with local consumers, understanding their behaviours, needs and gaining insight into how to serve them better.

“Great global brands, great global marketing ideas and campaigns were developed from the ‘bottom up’ - the marketers in the local geographies,” he claimed.

Morgan’s second concern was P&G’s focus on brand, rather than the ‘consumer’.

“Brand-focused management encourages vertical structures, divisionalised businesses, introverted thinking, and the complexity and internal politics this breeds. None of this helps the consumer,” he said. "The reason the structure is around brands is because it's a manufacturing capability. This actually creates more silos, and works against having a single view of the consumer, who is buying shampoo, detergent and other products.

“In our revolutionised digital marketing world, a company like P&G should be working through ways to cross sell, upsell and make its portfolio of brands available to delight the individual consumer, rather than build multiple manufacturing and finance-led divisions to all independently talk to the same consumer separately [and fight among themselves for the internal resources to do so].

“The strength of a corporate multinational is its ability to offer the consumer a portfolio of excellent brands and this should be the focus, not building global business units which inadvertently are in direct conflict with holistic consumer success.”

ADMA CEO, Jodie Sangster, said the decision to bring together these disciplines under a single pillar made good business sense, but questioned why newer marketing skills such as content marketing and data analytics weren't included.

“They belong under the same roof," she said. "I also question whether P&G is right to name its marketing organisation ‘brand management’ as it is a bit inward looking. Technically, the focus should be on the customer experience or at least brand experience.This is particularly important for an FMCG – they need to be engaging their customers in everything they communicate.

"The key objective for brands now should be customer satisfaction.”

Unlike Morgan, Branding Strategy Insider columnist, Mark Di Somma, positioned P&G’s decision as a fundamental re-examination of the role of marketing in a blog post.

He also believed it could show P&G’s move away from product-centric marketing to overall perceived value.

“While ‘marketing’ and ‘brand management’ are often treated as synonyms, there is an important distinction between the two terms,” he commented. “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.

“The two are linked – but different. Marketing is the means. Brand management should be the goal.”

Read more: Friday infographic: The not-so-secret formula for the modern CMO

CMO Council’s Miller predicted organisations that understand the need to become more customer-focused will make similar organisational and cultural moves.

“Sadly, I do see other organisations following suit in the name change, but not in what P&G has actually done,” she added.

“P&G has taken a hard look at itself and realised the marketing machine was not running in a manner beneficial to customers and by extension, the business. It takes hard work and commitment to look through that lens and admit you don’t like what you see. And it takes even more commitment to follow through on a reorganisation like this to empower marketing professionals to be just that: marketing professionals.”

Industry comments on P&G changes

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