Implementing business and marketing strategies
In 1931 Neil H. McElroy, a young P&G advertising manager, persuaded his bosses to assign a single marketing “brand man” to each of the company’s products. McElroy, who years later be-came the company’s chairman, argued that the firm’s struggling new Camay soap brand suffered from “too much Ivory thinking.” He pointed out that the firm would grow faster by allowing each of its brands to compete independently in the market. One person should be given full responsibility for evaluating the market, developing marketing plans, and coordinating all the functional activities associated with a given brand.
Some P&G executives at first denounced his idea as “suicide”; but it soon took hold, and the first product management organization was born. The firm assigned young managers with high potential to manage individual brands. Each manager ran the brand as a competitive business. Although the brand managers had little formal authority and their decisions required approval from layers of superiors—often right up to the chief executive—they were the critical starting point for developing marketing and advertising strategy, planning sales promotions, and coordinating package design. Similarly, although the brand managers had no authority over managers in other functional areas, such as R&D and manufacturing, they were responsible for coordinating activities of those functions to ensure consistency with the needs and desires of target customers and with the overall strategy for the brand.
The product management organization developed at P&G proved so successful that many other consumer products and services firms soon adopted it.