An excerpt from the white paper entitled “Business Anthropology and the Culture of Product Managers.”
Brand or product management was born from intense, sustained and rigorous trial and error in the market research department at the giant consumer packaged goods company, Procter & Gamble. In 1931, D. Paul “Doc” Smelser, a PhD economist from Johns Hopkins University and the head of the new unit at Procter & Gamble, called the Market Research Department, hired female college graduates to conduct fieldwork. He sent them door to door to survey homemakers about their use of all kinds of household products and their usage patterns in a method akin to anthropological customer ethnography. Within several years, the size of the department’s staff grew to around 34 with dozens of field researchers. The first brand to incorporate these market research methods in the product design process was Camay soap (Dyer et al. 2004).
Camay soap would be the catalyst and Neil McElroy would lead the charge, in defining brand management. Procter & Gamble’s perfumed beauty bar, Camay soap, challenged the purity positioning of P&G’s own product, Ivory soap. The two products targeted very different markets and were in competition for resources within P&G. This convinced McElroy, then a young advertising manager, of the need to establish assignments for its marketers in brand-specific teams to allow those teams a measure of autonomy in running marketing campaigns (Dyer et al. 2004).
In a P&G company memo written by McElroy on May 13, 1931 (McElroy, 1931) he outlined what he felt the duties and responsibilities of the “brand men” should be. He assigned them the task of studying and analyzing the brand history and instructed them to “study the territory personally,” both the dealers and the customers.
McElroy’s (McElroy, 1931) memo laid the groundwork for a reorganization and shift from a geographically aligned sales perspective to one oriented around the brands. This resulted in a fundamental restructuring of P&G to its core (Dyer et al, 2004). John Pepper (Pepper 2005), former P&G chairman of the board, president and CEO, states “responsibility and accountability for discreet business units were assigned to separate organizations” by Neil McElroy, when he helped create the brand management system in the 1930s (p. 305). Procter & Gamble (Dyer et al, 2004) brand managers assumed responsibility for the coordination of all activities and tasks involving their brand. Far more than just marketing, the brand managers would also coordinate product development and field sales.
As a result of this comprehensive training, from McElroy forward, every one of P&G’s chief executives would hold the positions of assistant brand manager and brand manager on their way up the executive ladder. The discipline of brand management forms the very culture of P&G and shapes its landscape. It has has been emulated in a variety of forms within companies from every sector all over the world. In a recent article, Tyagi and Sawhney (2010) state that “product management is the most common organizational mechanism to manage products, relative to other mechanisms like a functional structure or key account management” (Howley, 1988; Skenazy, 1987; Workman, Homburg and Jenson, 2003 as cited in Tyagi & Sawhney, 2010).
In the 1980s (Dyer at al, 2004) P&G discovered a way to improve upon the brand management system. Procter & Gamble sought to redirect the internal competition between brand managers, outward toward competitors and the new focus was on teamwork. David Swanson, the senior vice president of engineering began using cross-functional (read cross-cultural) teams to speed up product development, improve product quality and trim costs. This cross-functional team system set up what would become one of the greatest challenges for brand and product managers.
According to Gemmill and Wilemon (1972) product managers are often assigned profit responsibilities for their product(s) but not given authority over the cross-functional team units on which they depend in order to carry out those responsibilities.
“My goal is to use anthropology to better understand human behavior in all of its settings, whether those settings be an isolated village in the Himalayas or a corporate office in New York City.”
The entire white paper can be accessed at http://www.aipmm.com/html/newsletter/archives/000437.php
Dyer, D., Dalzell, F., Olegario, R., (2004) Rising Tide: Lessons from 165 Years of Brand Building at Procter & Gamble. Boston, MA: Harvard Business School Press
Gemmill, G., & Wilemon, D., (1972) The product manager as an influence agent. Journal of Marketing, Vol. 36 (January 1972).
McElroy, N. (1931) Procter & Gamble company memo, May 13, 1931.
Pepper, J. (2005) What Really Matters. Cincinnati, OH: Procter & Gamble Company.
Tyagi, R., & Sawhney, M. (2010) High-performance product management: The impact of structure, process, competencies and role definition. Journal of Product Innovation Management 2010: 27