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 / Summer 2003 / Issue 31(originally published by Booz & Company)


Bring on the Super-CMO

Although unfortunate, the devolution of brand marketing is not irreversible. For decades after Procter & Gamble Company introduced the modern brand management system in 1931, product and brand management were deeply strategic. Under this structure, brands were run as businesses by powerful executives, who competed both with other companies and with other brands in the parent company’s portfolio. They were the “hub of the wheel,” especially inside consumer-product companies, and controlled or influenced all of the elements of the marketing mix, represented famously by Philip Kotler, SC Johnson & Son Distinguished Professor of International Marketing at Northwestern University’s Kellogg School of Management, as the “Four Ps”: Product, Price, Promotion (communications), and Place (channel). Consumer packaged-goods companies such as Procter & Gamble and the General Foods Corporation brought the model to its zenith in the 1960s, using discipline to build leading brands in categories from coffee to detergent.

In the 1980s and 1990s, however, consumer packaged-goods companies took many tools away from the individual brand or product manager. New layers of management were added (typically at the category level) to oversee individual brand decisions and to seek opportunities to extend established brands into new areas. Marketing resources, such as Web programs, databases, and call centers, increasingly were added and shared across brands, further reducing the autonomy of brand managers. As media and marketing costs rose and consolidation at marketing, media, advertising, distribution, and retail companies continued, promotional budgets got tied up in long-term company-to-company marketing alliances, such as the arrangement between Walt Disney Company and the McDonald’s Corporation to use Disney media properties and the McDonald’s retail channel to promote each other’s businesses.

Outside consumer packaged goods, the brand management model never worked very well. Attempts by the financial-services industry to adopt the approach in the late 1980s (led by Citibank under CEO John Reed) and by the automotive industry in the early 1990s (led by the General Motors Corporation under marketing chief Ron Zarella) were notably unsuccessful. In these companies, brand managers were never really more than communications managers, and they had limited influence on company operations, especially when those operations were shared across brands.

The net result is that marketing, in recent years, has not lived up to its full promise. Even as many companies were appointing chief marketing officers for the first time, people pursuing careers in product or brand management were finding their responsibilities, skill sets, and future opportunities narrowing.

The advertising agency business recognized this change at least as long ago as the mid-1980s. Advertising executives then began to publicly decry the encroachment of management consultants upon the agencies’ historic turf: advising companies on marketing strategy. But the reason then, as now, was the evolution of brand management. With clients and agencies focused increasingly on communications activities and tactical program implementation, companies had to turn elsewhere to address more complex strategic marketing issues, especially those in which resources and infrastructures are shared across brands. At the same time, companies learned that consultants could not replicate the implementation expertise that experienced marketers bring to their roles.

“Big M” Marketing
Although the outsourcing of strategic marketing expertise probably made sense during the past two decades of continual, rapid changes in technology, media, markets, and organizational structures, the time has come for companies to bring some of it back in-house. The new class of strategic marketer will own the talents that, in recent years, have resided variously among consultants, agency executives, and senior strategists. In particular, these people — who actually deserve the title of chief marketing officer (CMO) — will require five sets of skills, which cross the traditional barrier between artistry and analytics:

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