Today, brand management rarely takes those tools out of the box. Now, P&G teams spend most of their time focused on the consumer-on advertising, product development and research. In other words, they're back to managing brands.
Information-driven marketing is largely responsible for the change.
Manufacturers and retailers say the new way of doing business is a big win for consumers, putting the power back in their shopping cart. "We're trying to make it a pull marketplace instead of a push marketplace," said Jeff Nedelman, VP-communications and strategic planning for the Grocery Manufacturers of America.
But there's a catch for package-goods marketers and brand teams: Managing brands in an information-rich environment will become harder. In a survival-of-the-fittest world, a higher level of brand fitness will be required.
"Unnecessary duplication and complexity will be visible," said Ralph Drayer, VP-product supply and customer business development at P&G. "Brands without a true consumer equity are going to be challenged."
Mr. Drayer is helping lead P&G toward Efficient Consumer Response (ECR), a strategy pursued by manufacturers and retailers together that involves changing every step in the retail process, from manufacturers' product-supply operations to the checkout register. ECR is information-driven and ultimately will lead to fewer SKUs per category on store shelves.
ECR-still several years away from being fully realized-will kill brands that either aren't market leaders or don't add meaningful choices for consumers.
Likewise, extending product lines with flavors or sizes that don't add real value won't win shelf space because retailers now have much-improved tools for measuring the precise sales and profit impact of the items.
H.E.B. Inc., San Antonio, has dramatically reduced SKUs in many categories-in some cases almost by half. The result? Increased sales and profits in categories such as pet food.
And brands won't be able to survive by periodically lowering their price, ECR proponents say, because retailers won't stock brands that don't deliver consistent and profitable sales.
It is "going back" to the way the grocery business once was, Mr. Drayer said, when corner groceries stocked only what neighborhood customers wanted. "They knew the consumer very well. Over time, we've lost that focus. We've added.....unnecessary complexity and cost to the process. ECR is all about getting rid of the complexity; going back to a focus on the consumer."
Not everyone is convinced information-driven marketing will work to the long-term benefit of brand equities.
David Aaker, professor of marketing strategy at the University of California-Berkeley's Haas School of Business and author of "Managing Brand Equity," believes increased emphasis on scanner data further fuels shortsighted approaches to brand equity. "Long-term strategies are going to be difficult to justify," he warned.
More radical change is anticipated by Don Schultz, professor of integrated marketing communications at Northwestern University: "You're going to see national brands becoming regional brands, or at the least you'll see a new kind of national brand, one that maybe only has 50% distribution nationally.
As retailers and manufacturers convert to ECR and make more use of scanner data, he predicted there will be little incentive for chains to stock all manufacturers' products in a category. "P&G might have a great relationship with Wal-Mart, so it gets control of the shelf," he said. "That will lead Wal-Mart's competitors, like Kmart or Target, to try to build relationships with Colgate-Palmolive or Lever."
Mr. Schultz also believes improvements in information available to consumers will contribute to the downfall of brands. "What's a brand?" he asked. "Really, it's an implied quality. But as consumers learn more about brands, they will learn that most brands, at least in established categories, are barely different from their peers.
"The more information a consumer has," said Mr. Schultz, "the less important brands become."