Marketing_Management_14th_Edition-min

626 PART 8 CREATING SUCCESSFUL LONG-TERM GROWTH
|Fig. 22.2|
The Product
Manager’s
Interactions
Research and
development
Manufacturing
and
distribution
Advertising
agency
Media
Promotion
services
Legal
Brand/Product
Manager
Packaging
Fiscal
Purchasing
Market
research
Sales force
Publicity
R
PM
APM
PA
(a) Vertical Product Team
PM
(b) Triangular Product Team
PM
R C S D F E
(c) Horizontal Product Team
PM = product manager
APM = associate product manager
PA = product assistant
R = market researcher
C = communication specialist
S = sales manager
D = distribution specialist
F = finance/accounting specialist
E = engineer
|Fig. 22.3|
Three Types of
Product Teams
C
marketplace; it also gives the company’s smaller brands a product advocate. However, it has disadvantages
too:
• Product and brand managers may lack authority to carry out their responsibilities.
• They become experts in their product area but rarely achieve functional expertise.
• The system often proves costly. One person is appointed to manage each major product or
brand, and soon more are appointed to manage even minor products and brands.
• Brand managers normally manage a brand for only a short time. Short-term involvement leads
to short-term planning and fails to build long-term strengths.
• The fragmentation of markets makes it harder to develop a national strategy. Brand managers
must please regional and local sales groups, transferring power from marketing to sales.
• Product and brand managers focus the company on building market share rather than
customer relationships.
A second alternative in a product-management organization is product teams. There are three
types: vertical, triangular, and horizontal (see Figure 22.3). The triangular and horizontal
product-team approaches let each major brand be run by a brand-asset management team (BAMT)
consisting of key representatives from functions that affect the brand’s performance. The company
consists of several BAMTs that periodically report to a BAMT directors committee, which itself
reports to a chief branding officer. This is quite different from the way brands have traditionally
been handled.
A third alternative is to eliminate product manager positions for minor products and assign
two or more products to each remaining manager. This is feasible where two or more products
appeal to a similar set of needs. A cosmetics company doesn’t need product managers for each
product because cosmetics serve one major need—beauty. A toiletries company needs different
managers for headache remedies, toothpaste, soap, and shampoo because these products differ in
use and appeal.
In a fourth alternative, category management, a company focuses on product categories to manage
its brands. Procter & Gamble, a pioneer of the brand-management system, and other top
packaged-goods firms have made a major shift to category management, as have firms outside the
grocery channel. 15 P&G cites a number of advantages. By fostering internal competition among
brand managers, the traditional brand-management system created strong incentives to excel, but
also internal competition for resources and a lack of coordination. The new scheme was designed to
ensure adequate resources for all categories.
Another rationale is the increasing power of the retail trade, which has thought of profitability
in terms of product categories. P&G felt it only made sense to deal along similar lines. Retailers and