The biggest implication for the future of brand management, however, may be how Procter & Gamble Co. is launching Reflect.com, which will custom-develop beauty care products from the inside out using a patent-pending system for mass customization model.
After seeing its sales stagnate in recent years and some initiatives languish for years in development and testing, P&G is trying to capture some of the agility of the dot-com world as hope-in-a-bottle for its own business.
SYSTEM OF FUTURE
In the process, the inventor of the brand management system of the past is taking a step toward what could be the system of the future. P&G Chairman-CEO Durk Jager recently told shareholders, Reflect.com "will have a major influence on the culture we are creating for our future business."
P&G reorganized into global business units earlier this year to solve one dimension of its speed problem in brand management -- the time it takes to get products from one market to global distribution. But global management doesn't necessarily shorten the time it takes to get a product into its first market.
To that end, P&G turned to Institutional Venture Partners as a partner in Reflect.com -- not so much to lend capital but to lend experience in getting projects off the ground as fast as Silicon Valley start-ups.
"We needed their help in showing what Internet speed looks like . . . in benchmarking ourselves against Internet speed," says Nathan Estruth, VP-marketing and team co-leader for Reflect.com and beauty care marketing director for P&G.
By P&G's past standards, Reflect.com has moved at light speed. After getting the initial go-ahead and seed money in January, a Reflect.com team of four expects to start doing business by December. That contrasts sharply with the four years spent in test market alone for Oil of Olay cosmetics before its U.S. launch earlier this year.
"The process for Reflect.com was different from the way things were eight to 12 months ago, but not much different from the way things are done today [at P&G]," Mr. Estruth says.
The team P&G used to launch Reflect.com team resembles those that McKinsey & Co. consultants Nora Aufreiter and Teri Lawver describe as "opportunity-based venture marketing teams" that play a key role in the speed and success of such companies as Starbucks Coffee Co.
P&G's team grew from four initially to 25 within a few months, picking up people from various functional disciplines as needed. Decisions came from within the team, which had ultimate budget authority, rather than through P&G's category management structure.
"There was no gathering every-one in the vice-president's office every time you needed a decision," Mr. Estruth says.
It didn't hurt that the team already included a VP -- team leader Denis Beausejour, P&G's VP-global marketing -- plus input from A.G. Lafley, president-global beauty care and North America, who serves as interim CEO of Reflect.com.
But Mr. Estruth believes the same approach will work -- and already is working -- elsewhere at P&G.
"This proves what P&G is capable of doing -- and doing across a lot of business opportunities," he says.
A similar venture group approach has been incorporated into each of P&G's global business units established this year, plus a corporate new ventures group handling projects that don't fit neatly into P&G's existing businesses.
Soon, some key players on Reflect.com's team, including Messrs. Beausejour and Estruth -- will return to their old jobs and give way to other permanent executives as Reflect.com gets off the ground and establishes permanent head-quarters in San Francisco next year. But some will also be available for future venture projects, too.
Mr. Estruth, who preferred staying in Cincinnati, will work on other e-commerce projects, suc-ceeded by Richard Gerstein, an-other P&G marketing director.
Such a fluid role is another key element in venture marketing organizations, according to McKinsey.
PARADIGMS OUT THE WINDOW
Venture Marketing Organizations, according to McKinsey report authors Nora Aufreiter and Teri Lawver, "toss traditional 'boxes-and-lines' structures out the window. These marketers realize that the value of an effective marketing organization lies in its ability to mobilize quickly when they see new opportunities. Therefore, rather than undertake periodic 'resturcturings,' VMOs continuously evolve their organizations to keep pace with market opportunities."
There is an emphasis on marketing specialists to fill specific roles and work alongside the "integrators" or generalists typified by the P&G brand manager.
The marketing generalist model, however, already is changing within P&G and many other companies that have adopted its brand management system over the last 50 years, says Gary Stibel, consultant with New England Consulting Group.
"Today you have great generalists, but they have lost the art of some of the specialists of yes-teryear in areas like packaging and advertising," he says. "In the future, you're going to find the throwback to marketing specialists who can max out a marketing discipline the way no generalist can."
Brand managers in groups assigned to target African-American, Hispanic and low-income consumers develop marketing programs and even new product and packaging formats specific to their target groups.
For example, the low-income marketing group developed a lower-priced, non-concentrated version of Dawn dishwashing detergent for sale in Dollar General stores.
Realistically, brand managers will continue to use outside experts for specialized skills, too, says Kevin Keller, professor of business at Dartmouth University's Amos Tuck School of Business.
Under McKinsey's VMO plan, sourcing and assembling the teams is approached with a "dream team" philosophy. "Leaders identify the required set of specialized marketing -- and other -- skills, then put together the best team," say Ms. Aufreiter and Ms. Lawver. One company's credit card division deploys dozens of such teams as its primary organizational vehicle for catpuring new market opportunities.
"The company maintains a shared pool of specialized program managers with specialized skills for developing and launching different types of new card products. Specialists with skills in database marketing and direct mail are also available to complement the team leaders' skill set."
With or without internal specialization, more people will participate in brand management, Mr. Keller says, completing an evolution from one manager, one brand to everyone becoming a brand manager.
For instance, more companies are using "internal branding" programs to stress that building brand equity is part of every employee's job, Mr. Keller says. Conversely, he also sees growing movement toward "top-down" branding, in which CEOs become the ultimate arbiters of brand equity.
"One way or another, more people are going to get involved in brand management in some sense," he says. "The challenge will be making sure all the right people