How do we move from a purchase-based model to a value-based relationship model?
A seemingly simple piece of news: the change in job titles within P&G's organizational structure. Yes, the marketing team has changed its name. This entire initiative is part of the company's redesign, announced by P&G in February, in which the organization's marketing becomes "Brand Management," with "sole responsibility for the strategies, plans, and results for the Brands," stated a P&G spokesperson. This isn't about abandoning marketing, but rather evolving its role and integrating its responsibilities into management.
Brand management at P&G now encompasses four functions, which include: brand management (formerly known as marketing), market and consumer knowledge (also called market research), communications (called public relations in some companies and external relations until recently at P&G), and design, as the territory where the brand expresses itself.
It may seem like a small thing, but it's not. The 4Ps marketing model has been evolving for a long time. How do you move from a model whose basic premise is the purchase (product, price, promotion, place) to a value-based relationship model where all these aspects have increasingly greater variables? Coming from P&G, this has even more significant force, as it is the largest global advertiser and a company with a portfolio of brands worth billions.
This restructuring movement has been underway for several years, with investments in a strong strategic design team, through an innovative point-of-sale methodology. This is because the maxim of AG Lafley, CEO of P&G, championed throughout his management, is the idea that "the consumer is boss," and his mantra translates to "the best strategy is the one the consumer sees." Therefore, every package, every display at the point of sale, or expression of the brand is designed to build value.
This change in terminology impacts all fronts. First, it begins with the perspective on the consumer – today, they have a role that goes far beyond just buying. They are multi-faceted: they can be a stock market investor who buys shares in your company; they can be a major influencer in the impacted community; they can also be an employee and/or consumer who buys, defends, promotes, and even sells. All in one person!
The second point of change is the perception of value. What is the fair price of a product if it is increasingly susceptible to drastic changes in supply and demand in real time in a digital world? You buy or sell today as if you were in a Persian market. What price am I willing to pay? It might be expensive at the beginning of the day and cheap at the end of the market. It depends on whether there are many people wanting it or if I'm willing to risk a strategy of being the last to arrive. A hotel room, an airline ticket, a sweater. What is the price? It might be based on availability, affiliations, rewards, loyalty programs, and even seem free, like a service that used to be paid for, such as Skype or WhatsApp. It's becoming increasingly difficult to know the value of things because the real and the virtual influence each other with every decision.
The third point that marketing has broadened is the vision of channels. Magazine Luiza didn't just open an online store. That already seems insufficient. It's affiliating its consumers to become salespeople. It's no longer door-to-door. It's profile-to-profile. Where do you need to place your product to sell or buy? Look at the example of large businesses, like Blockbuster, which, 10 years ago, was the retailer with the greatest reach in the United States.
To provide convenience to the consumer, the company had a strategy where every house in the country would have a store within a block. Blockbuster earned millions from late-returned videos, a revenue stream that always annoyed consumers but was the norm for the leader. Then Netflix arrived, with a convenience model – home delivery via mail initially and no late fees – which paved the way for digital streaming and led to the bankruptcy of the giant that refused to prepare for the changes that technology imposed.
This is a major wake-up call for companies. Never before has brand strategy been so closely linked to business strategy. The brand plays a role in preparing your business for increasingly rapid changes. We are in an era where your competitor can come from anywhere, from any segment, regardless of size. Brands that consistently navigate this timeline maintain their Darwinian capacity to evolve. Because in this war, only those who bet on genuine relationships, clear values, real benefits, and engagement with purposes that will truly have a positive impact on people will survive.
The 21st century is full of good challenges, and the good news is that brand management is the key word that encompasses indicators, the work of interdisciplinary teams, and engagement with values – which is much cooler than control, forced sales, and false promises.
It's difficult. But we know that just looking to the side doesn't win the game. It's like in football: artistry alone isn't enough if discipline is needed. Emotion alone overshadows strategy. A star player alone doesn't win the championship. Today, we need a lot of physical and emotional preparation combined with strategy to change the score. Winning the World Cup is no longer the exclusive domain of a few. What we see in this World Cup is that a global playing style is a reality. Nigeria or Costa Rica are underdogs today, but if their management improves, they could be champions one day. Passion is stronger than ever, but it only generates results if it's based on strategy.
This article was originally published in Media & Message.
