yictor P. Buell

The Changing Role of theProduct Manager in ConsumerGoods Companies

A recent study examines the current status of the productmanager s role and the changes it has undergone.

WHAT the proper role of the product orbrand manager should be remains a

troublesome question for the managements ofconsumer goods companies. It is particularly aproblem for packaged goods producers, who arethe most frequent users of this organizational de-vice.

The role of the product manager has undergoneseveral changes since the product managementsystem was first introduced. That these changeshave not produced entirely satisfactory results isevident in the continuing public debate on thistopic. Titles of selected articles and papers illus-trate the situation:

The Product Manager System Is In Trouble'Has the Product Manager Failed? Or the

Folly of Imitation^Product Management—Vision Unfulfilled'Brand Manager VS Creative Man: The Clash of

Two Cultures'*Brand Manager VS Advertising Director—Must

One of Them Go?'Product Managers and Advertising—A Study of

Conflict, Inexperience and Opportunity.*

1, Stephens W, Dietz, Advertising Age, June 2, 1969, pp,43-44,

2, Sales Management, January 1, 1967, pp, 27-29,3, David J, Luck and Theodore Nowak, Harvard Business

Review, Vol, 43 (May-June 1965), p, 143,4, Ralph Leezenbaum, Marketing Communications, April

1970, pp, 40-43,5, Advertising Age, January 27, 1969, p, 53,6, James F, Pomeroy, paper presented to the Association

of National Advertisers Workshop on Development and Ap-proval of Creative Advertising, New York, April 2, 1969,

Journal of Marketing, Vol, 39 (July 1975), pp, 3-11,

The purpose of this article is to review thechanges that have occurred in the product man-agement form of organization since its introduc-tion, to explore the reasons behind the continuingcontroversy, and to examine current changes inmanagement thinking and their implications forthe future. To this end, the author uses materialfrom his recent study of several leading consumergoods manufacturers and major advertisingagencies.

The Study:Background and Approach

Much of the controversy has centered on thedegree of control the product manager exercisesover advertising. Under a grant from the Associa-tion of National Advertisers (ANA), the authorstudied the advertising decision-making processin companies with major advertising expendi-tures.^ Although its overall purpose was broader,the study provided the opportunity to exploremanagement attitudes toward product manage-ment and to gather information on the restructur-ing this system currently is undergoing.

In-depth interviews were held during the sum-mer and fall of 1972 with 63 executives in 20 lead-ing companies which represented ten consumerindustry classifications plus one miscellaneouscategory. Extensive interviews were also heldwith 23 executives in ten major advertising agen-cies.

Sixteen of the companies produced packagedgoods primarily and fotir produced consumerdurables primairily. Product management was the

7, Victor P, Buell, Changing Practices in AdvertisingDecision-Making and Control (New York: Association of Na-tional Advertisers, 1973).

Journal of Marketing, July 1975

predominant form of marketing organization infifteen of the companies; a functional form pre-dominated in five. Some of the companies usedone organizational form in some divisions and theother form in other divisions.

Survey Sample

The combined domestic sales of the 20 com-panies surveyed exceeded $60 billion, and theircombined advertising expendittires were over$1.5 billion. Seventeen were among the 50 largestadvertisers and 10 ranked among the top 20. Theprimary industry classifications of the consumerpackaged goods companies included food; drugsand cosmetics; soaps, cleansers, and allied prod-ucts; soft drinks; tobacco; paper; liquor; and onemiscellaneous category. The consumer durablegoods companies fell under the industry classi-fications of electric appliances, automobiles, andbuilding products.

Participant companies were selected with theassistance of the Management Policy Committeeof the Association of National Advertisers. Selec-tion criteria included: (1) company commitmentto a large advertising budget, (2) recognized lead-ership position in the company's industry, (3)management willingness to participate, and (4)multiple industry representation. Preference wasgiven to companies that had extensive experiencewith product managers. Advertising agencieswere selected from among leading agencies thatserved one or more of the 20 manufacturing com-panies. To encourage participation and frank dis-cussion, participants were asstired that neithercompanies nor individuals would be identified inthe report.

Thirty-one corporate executives were inter-viewed, including chairmen, presidents, execu-tive and group vice-presidents, and staff vice-presidents. Positions occupied by the 32 divisionalexecutives interviewed included presidents, mar-keting vice-presidents, directors of marketing oradvertising, directors of brand management, andgroup product managers.

The 10 advertising agencies in the study wereamong the nation's 20 largest and had combinedU.S. billings in excess of $2 billion. Agency execu-tives interviewed included chairmen, presidents,executive and senior vice-presidents, and vice-presidents.

• ABOUT THE AUTHOR.Victor P, Buell, formerly corporate vice-president ofmarketing for American Standard, Inc, is associateprofessor of marketing in the School of BusinessAdministration, University of Massachusetts, Am-herst.

Data Collection Method

All interviews were conducted by the author.Interviews were open-ended and ranged in lengthfrom one to three hours. Policies, procedures, andfiles were made freely available. Interviews withagency executives provided cross-checks on in-formation developed with their clients.

The ptirpose of the study was to gain under-standing of the reasons behind advertising andmarketing management practices rather thanduplicate the quantitative data developed by themore commonly tised mail questionnaire. Be-cause of the qualitative nature of the study,findings are reported primarily as the author's in-terpretations of prevailing management practices,attitudes, and intentions rather than in the formof statistical summaries. The findings have beenreported to the participating executives and havebeen discussed in depth with several of them.

While the study provides the principal datasource for this article, conclusions are based alsoon interviews with executives during other re-search projects by the author, reviews of productmanagement literature, £ind recent reports ofmail surveys.

Because of the selective sample, the findings £irenot representative of all companies. The findingsare important in that they represent managerialviewpoints in consumer goods companies withleadership positions, most of whom employ largenumbers of product managers.

Historical Developments

The product management system, although in-troduced nearly 50 years ago, did not come intogeneral use until the 1950s. The Association ofNational Advertisers, in a recent study among itsmembers, found that the following percentages ofparticipating companies used product managers:packaged goods—85% (93% of those with annualadvertising expenditures exceeding $10 million);other consumer goods—34%; industrial goods—

Product management is a response to the or-ganizational problem of providing sufficientmanagement attention to individual products andbrands when there are too many for any oneexecutive to coordinate effectively all of theaspects of the marketing mix. Companies, ordivisions of companies, with a limited line ofproducts normally follow a functional plan of or-ganization wherein departments such as sales, ad-vertising and sales promotion, marketing research.

8, Current Advertising Practices: Opinions as to FutureTrends (New York: Association of National Advertisers,1974)

The Changing Role of the Product Manager

product planning, and customer service report to acommon marketing executive. When shifting fromthis purely functional organization, product man-agers are added to assist the chief marketingexecutive by assuming the planning and coordina-tion for individual products or product lines.

Although the product manager has made possi-ble greater management concentration by prod-uct, the position also has created new problems.Responsibility often has been assigned to theproduct manager for achievement of goals such assales volume, share of market, and even profit insome cases; yet the product manager has no lineauthority over the functional departments thatexecute his plans.

Shift of Advertising Responsibilityto the Product i\4anager

A key change in the original concept was madewhen companies shifted the management of ad-vertising fT-om the advertising manager to theproduct manager. In leading packaged goodscompanies that currently use product managers,one rarely finds an advertising department on theorganization chart. If one is there, it is usually atthe group or corporate levej, where it provides ser-vices common to several divisions, such as mediaplanning and coordinating media purchases.

The reasons for phasing out the separate adver-tising function were: (a) to reduce costs, whichrose as the advertising department expanded tomanage the advertising for increasing numbers ofproducts and brands; and (b) to give the productmanager more control over execution of a majormarketing function. Such a move was possiblebecause the advertising agency was available todevelop and place advertising.

Figures 1 and 2 provide examples of typicalfunctional and product management organiza-tions. While details may vary from company to

Sales

Companyor

Division

Mari<eting

MarketingResearch

ProductPlanning Advertising

AdvertisingAgencies

Sales

Companyor

Division

Marketing

MarketingResearch

NewProductPlanning

GroupProduct

Manager(s)

ProductManagers

AdvertisingAgencies

II

I I

FIGURE 1. Functional marketing organization.

I

FIGURE 2. Product management organization.

company, these charts reflect the main differencesthat exist between the two organizational formsin the companies studied by the author.

Companies Assume thePlanning Function

Concurrent with the growth of the productmanagement function, companies began to as-sume the marketing planning and servicefunctions—with the exception of creative andmedia—that had been performed for them bytheir advertising agencies.

As marketing grew in sophistication dtiring the1950s, much of the know-how was centered in theagencies. Gradually, however, companies ex-panded their own supporting service functionsand the responsibility for initiating marketingplans became a key function of the productmanager. This change has been made with littlecriticism. Agencies have accepted the idea thatmarketing planning should originate within thecompany, and they are aware of the growingeffectiveness of the product manager as a planner.

Increases in InterveningManagement Levels

As companies grow, the product manager be-comes further removed from the real decision-making levels of management. When productswere fewer in number product managers reporteddirectly to higher-level executives, who had theauthority to make broad decisions and implementprograms. As product lines proliferated, and thenumbers of product managers grew correspond-ingly, intervening levels of supervision becamenecessary. In large companies today, productmanagers may be anywhere from two to four

6 Journal of Marketing, July 1975

levels below the executive who has the realdecision-making authority and the clout to seethat plans are carried out.

Due to rapid growth, companies also haveshifted to filling product manager positions withyounger, less experienced people. This relative in-experience, plus separation from the key decisionmaker, has increased management concern overthe degree of authority that should be delegatedto the product manager. These concerns are par-ticularly strong with respect to advertising be-cause of the magnitude of advertising costs andthe importance of advertising to product success.

Continued Use ofFunctional Organization

The ANA study of its members found that 34%of the participating larger consumer durablegoods companies used product managers, ascompared with 85% of the packaged goods com-panies. Why do some companies stay with thefunctional form?

Pearson and Wilson believe there may be goodreasons why a company should prefer the func-tional organization.^ In fact, they think somecompanies have made a misteike in switching toproduct management before it was really neces-sary. They maintain that companies with a line ofsimilar products, with one dominant product line,or with several large product lines (sufficient tosupport divisionalization) might be better offavoiding product management. It was not longafter Pearson left McKinsey & Co. to become pres-ident of PepsiCo that the Pepsi-Cola division didaway with product managers.'" This division sellsa related line of soft drinks with one dominantproduct—Pepsi-Cola.

Three of the consumer durable goods com-panies interviewed by the author had functionalmarketing setups. The major appliance group ofan electrical company and the major division ofan automotive manufacturer each had relativelyfew products although they accounted for largedollar sales. Both companies preferred to use ad-vertising to build the overall brand name in addi-tion to promoting individual products; they feltthey could achieve better control through thefunctional advertising manager. The third com-pany, a manufacturer of building products, or-ganized its product divisions by markets andchannels. Historically, the corporate advertisingdepartment has supervised the development of

9, Andrall E, Pearson and Thomas W, Wilson, Jr., MakingYour Marketing Organization Work (New York: Associationof National Advertisers, 1967),

10, "The Brand Manager: No Longer King," BusinessWeek, June 9, 1973, pp, 58-66,

advertising and sales promotion for the variousmarket sales managers, who app>ear to prefer thisarrangement.

While there are good reasons why many com-panies do not use product management, there ap-pears to be no significant defection by currentusers, as was implied in the article that featuredthe PepsiCo story." Of the 211 companies sur-veyed by the ANA, 5% had adopted product man-agement during the preceding three years, ascompared with 1% who had abandoned it.'^Clewett and Stasch, in a survey of 160 productmanagers and other marketing executives, foundless than 1% who felt that product managementwas likely to be discontinued in their divisions.'^In the author's study, none of the fifteen com-panies that used product management planned tochange.

No doubt some companies will shift fi-om prod-uct management from time to time for sound or-ganizational reasons or out of sheer frustration.But there is no evidence of a trend in this direc-tion. If a trend exists it would appear to be in thedirection of continued adoption of product man-agement.

Current Management Attitudes

Executives interviewed by the author were con-cerned about the product management systembut were committed to making it work better.Their attitudes appeared to be changing with re-spect to the question of the product manager'sresponsibility and authority and his role in adver-tising. They also expressed concern over the scar-city of advertising specialists within their com-panies.

Disaffection with theLittle President" Concept

Almost all of the executives interviewed recog-nized that the earlier concept of the productmanager as a "little president" or "little generalmanager," with profit responsibility, was un-realistic. As the manager of a paper productscompany said:

We've gotten away from the concept of theguy who runs his own little company. Wewant our product managers to be profit con-scious, but what we're really talking about issales volume.

11, Same reference as footnote 10,12, Same reference as footnote 8,13, Richard M, Clewett and Stanley F, Stasch, "Product

Managers in Consumer Packaged Goods Companies" (Work-ing paper. Northwestern University Graduate School ofManagement, March 1974).

The Changing Role of the Product Manager

Remnants of the concept persist, however, asillustrated by excerpts from two recruitingbrochures. The brochure of a household productscompany states:

The Product Manager has responsibility forhis brand. He is not only responsible for itsmanagement, he is accountable for its overallp>erformance. . . . The Product Manager is notjust a marketing manager, but in many re-spects a general manager of a good size busi-ness.

When this statement was pointed out to an execu-tive of this company the author was told that itno longer represents management opinion; that,in fact, the company's product managers have nodecision-making authority.

The brochure of a food company, after explain-ing the product manager's role in developingobjectives and strategies, says: "The ProductManager is respn^nsible for the execution andperformance of the brands entrusted to him,"

In describing the position, the marketing direc-tor of another food company probably cameclosest to prevailing management attitudes whenhe avoided mentioning responsibility for execu-tion or performance:

Our product manager's job is planning—objectives and strategy—monitoring prog-ress, coordinating budget development andcontrol, and working with other departments—Home Economics and Manufacturing, forexample—on product cost and quality.

Clarifying the Advertising Role

Packaged goods executives pretty much agreethat the typical product manager has insufficienttrciining, experience, or skill to be entrusted withimportant creative decisions. They tend to sharethe view of the agency vice-president who told theauthor: "Advertising is too important a decisionto be left in the hands of a product manager. Hisrole should be planning and coordination—notadvertising approval,"

Agency critics complain that because of his in-experience the product manager is too cautiousand too meticulous in judging creative work; hedelays the development process and causes dilu-tion of creative copy by requiring repeated re-work; and, to compensate for his insecurity, herelies too heavily on copy testing, which normallyproduces inconclusive data. Company executivesagree. All want the product manager involved inadvertising decision making, but they are de-veloping procedures that get agency recommen-

dations up the line to the final decision maker asquickly as possible. Agencies, it should be noted,are reassigning responsibility for client contact tohigher management levels to correspond with theclient management levels making advertising de-cisions.

Current top management attitudes are reflectedin the following comments. The president of apersonal products company said:

I want the best people in a profit centerworking on, and approving, mairketing deci-sions. We try to set the atmosphere and toneso that our brand manager feels important,yet knows that advertising is too importantto be decided at the bottom level.

The executive vice-president of a drug productscompany explained his company's position thisway:

We give much authority to the product man-ager other than the copy side—sales promo-tion, for example. But we let him know he isnot to be the final authority on advertising.We say the person who knows the most aboutadvertising should make the ultimate deci-sion.

Companies, however, do make a distinctionbetween major and minor advertising decisions.Figure 3 indicates the differences in executive lev-els that deal with decisions of Vcirying impor-tance. Major decisions may include almost any-thing to do with an important product or, for lessimportant products, they may involve only sig-nificcint matters, such as a change in strategy. Theauthor's research showed that advertising deci-sions considered to be major were made mostfrequently at the division manager or divisionmarketing manager levels, with some going to thecorporate level. None of the companies believedmajor creative-type advertising decisions weremade by the product manager. Decisions consid-ered minor, on the other hand, most frequentlywere made at the product manager and divisionmiddle management (group product manager)levels. Understanding this distinction may help toclarify the sometimes confusing results of thosemail surveys that indicate that the product man-ager maikes advertising decisions: he does mcikesome decisions, but usually not the major ones.

Considering the past sharp criticisms by agencyexecutives it is worth noting that these com-plaints have been directed primarily at the prod-uct manager's role in the advertising approvalprocess. In contrast, they agree with his role asthe authoritative source of information and as

8 Journal of Marketing, July 1975

No. ofCompanies

16151413121110987654321

Major Decisions

Minor Decisions

Corp.Executives

DivisionGeneralManagers

DivisionChiefMarketingExecutives

DivisionMiddleManagement

Corp.Adv. orMarketingStaff

ProductManagers

Note: The figures represented by the bars total more than the number of companies because deci-sions may be made jointly by two or more executives, decisions may be made by one executive in theabsence of another, or the decision level may vary by degree of importance vi^ithin the Major or Minorcategories. Source: Adapted from Victor P. Buell, Changing Practices in Advertising Decision-Makingand Control (New York: Association of National Advertisers, 1973), p, 49,

FIGURE 3, Where advertising companies say creative decisions are made.

marketing planner. An agency vice-president whoworks with both functional and product man-agement organizations volunteered this com-ment:

I would rather work with a product managerthan with an advertising manager. The prod-uct manager has all the information, al-though he may be unaware of the broaderstrategies. But in the vertical organization,each person has only a part of the informa-tion we require.

Need for the Advertising Specialist

After several years of operating without adver-tising departments, many company executivesnow wonder whether they have any real advertis-ing expertise left in-house. The normal promotionroute provides added experience in judging ad-vertising, and one learns from his mistakes andsuccesses. But experience does not necessarily de-velop the kind of expertise in judging creativework that comes from long and intensive in-volvement in the development of advertising bytalented people. Some marketing executives seemto have better creative judgment than others, butpromotion up the line from product managerdoes not automatically guarantee success in thisarea.

To replace the skills that were lost with thedemise of the advertising department, three com-panies have created a new position, staff advertis-ing director, to provide creative counsel to prod-uct mcinagers and others concerned with advertis-ing decisions. Whereas the former advertisingmanager made the advertising decision, the newadvertising director provides counsel to thosecharged with the decision-making responsibility.

Where this position has been introduced, it hasusually been placed within the division marketingmanagement organization. Executives report thatproduct and other managers exhibit reluctance toavail themselves of staff counsel when it is lo-cated in corporate headquarters.

How Much Authority?

The jjersistent, unresolved question puzzlingmanagement is how much and what kind of au-thority the product manager needs. Luck, in dis-cussing the many functional areas with which theproduct manager must interact, states: "Productmanagers are seriously hampered by ambiguityof authority in the execution of their plans anddecisions. . . ."'"

A common mzinagement attitude was expressed

14, David J, Luck, "Interfaces of a Product Manager,"JOURNAL OF MARKETING, Vol. 33 (October 1969), pp, 32-36,

The Changing Role of the Product Manager

by the group vice-president of a liquor company,who said: "The brand manager's authority is theauthority of his influence and knowledge." Whiletrue as far as it goes, this conclusion seems over-simplified. Several studies bear on the issue.

Lucas, in a mail survey of 60 product managers,found that four in five believed their degree ofcontrol over the decision areas of advertising,marketing research, and market testing was"adequate for their assigned responsibilities.""Smaller proportions reported that they hadadequate control over the personal selling, pro-duction, and distribution functions and in theareas of legal affairs, advertising expenditures,and pricing. That these product managers did notconsider their responsibilities insignificant is evi-dent in the fact that two-thirds felt that they hadmajor, or even 100%, responsibility for productprofit.

The mail survey of 160 executives, primarilyproduct managers and group product managers,conducted by Clewett and Stasch fotind productmanagers to be "less than major participants" inthe decision areas of advertising, product, packag-ing, pricing, and personal selling.'* They were re-ported to be "major participants" in marketingresearch and promotion. When tasks, as opposedto decision making, were considered this studyreported that product managers had a "majorrole" in planning, budgeting, schedtiling, com-municating plans and mziintaining enthusiasmfor them, monitoring progress, revising plans, andreporting performance. The two studies appear todisagree only in the area of advertising decisionauthority.

Gemmill and Wileman report that in the ab-sence of direct authority, product managersinfluence action by using reward power, coercivepower, expert pxjwer, and referent (i.e., personalrelationships) power.'^ They found that productmanagers who primarily employed expert/referent power were the most effective.

Dietz has identified at least two types of prod-uct managers the brand coordinator, who has noentrepreneurial responsibility; and the brandchampion, who has responsibility for making en-trepreneurial recommendations.'* Common toboth types, he says, are the responsibilities forplanning, securing approval of plans, coordinat-

15, Darrell B, Lucas, "Point of View: Product Managersin Advertising," Journal of Advertising Research, Vol, 12(June 1972), pp, 41-44,

16, Same reference as footnote 13,17, Gary R, Gemmill and David L, Wileman, "The Prod-

uct Manager as an Influence Agent," JOURNAL OF MARKETING,Vol, 36 (January 1972), pp, 26-30,

18, Stephens Dietz, "Get More Out of Your Brand Man-agement," Harvard Business Review, Vol, 51 (July-August1973), p, 127.

ing the execution of plans by functional depart-ments, and evaluating the results of the actionstaken. Dietz suggests that the brand coordinatorneeds little authority to fulfill his responsibilitybut that the more aggressive brand championreaches out for authority in frustration over theslowness with which higher levels of managementarrive at decisions.

As mentioned eeirlier, the author's findings in-dicate that the product manager's authority var-ies with the relative importance of the decisionand that his influence varies with his experienceand competence. As a division president in a foodproducts company said:

The product manager system works well forus, but we don't have a set way of workingwith every product manager. Some are moreexperienced and some are more aggressivethan others.

Consensus appears to exist with respect to theproduct mcinager's responsibility for planning,coordinating, and evaluating. Differences con-tinue with respect to the questions of authorityover execution and the authority to make deci-sions. The present answer for the last two wouldseem to be "it all depends,"

As a result of these changing management at-titudes, all companies interviewed indicated thatthey had made, or were making, changes in theirproduct manager setups with respect to functions,authority, management decision-making levels,staffing, or length of time in the job. Eight indi-cated that they were acting in all of these areas.

Management accepts the system but believes itneeds improvement. The president of a food com-pany expressed the viewpoint of many when hecommented: "There is nothing fundamentallywrong with the product manager system, but Idon't think we operate it as well as we should."

Emphasizing Position Strengths—Deemphasizing Weaknesses

In redefining the job, management is emphasiz-ing the functions that product managers can per-form well and deemphasizing those aspects of theposition with inherent weaknesses. Emphasis isbeing placed on the role of the product manageras the gatherer and synthesizer of all informationabout the product and its markets, as the de-veloper of plans, as the communicator of ap-proved plans, and as the monitor of performance.Management expects the product manager tohave a deep personal commitment to the successof his product, while they recognize that he alonecannot be held responsible for achievement ofsales and profits. Ultimate responsibility, they be-

10 Journal of Marketing, July 1975

lieve, must rest with the executive in a position tocontrol all marketing activities.

The role of the product manager as decisionmaker is being deemphasized. The current trendis for decision-making authority to be given inaccordance with the importance of the decisionarea and to vary with the experience and compe-tence of the individual product manager. Theproduct manager will remziin involved with thedecision-making process, but he will be encour-aged to bring key decisions to his manager's at-tention. As one marketing director said, "Thebrand manager's job is to get good decisionsmade irrespective of who makes them."

Controlling Resource Allocationat Higher Levels

Management not only wants decisions madewhere the most competence exists, but it alsorecognizes the need to control resource alloca-tions among products. The president of a liquorcompany put it this way: "Our brand managersmake many decisions but they don't make the keyones. Someone at a higher level must look at thebroad allocation of expenditures."

Obviously, the product manager is not in a po-sition to see the overall picture. The more effectivean individual product manager is, the better jobhe may do in obtaining a disproportionate shareof functional resources. It is higher management'sjob to see that money and other resources areallocated on the basis of profit potential.

The idea that decision making should be movedup the line rather than down the line does not sitwell with long-term advocates of decentralizedmanagement. However, most executives inter-viewed seemed to have come to terms with thisissue. They recognized that on matters that havea major impact on profit, decisions should bemade where all the necessary information isavailable and where competence exists to makethe best judgment. This means that different deci-sions will be made at different levels, but it doesnot preclude participation by the product man-ager, who shotild have the most informationabout his product and market. Exceptions to thisphilosophy were found at the corporate level inthree companies. Checks at the division levels inthese companies indicate, however, that majoradvertising decisions were, in fact, being made atthe marketing vice-president or division presidentlevels.

Staffing with Marketing Experience

During the 1960s and early 1970s, a number ofcompanies sought out the recent MBA graduate tofill the assistant product manager position. The

graduate schools provided a selective recruitingsource of people with broad management train-ing. Though not unhappy with the quality ofthese recruits, managements have found thattheir limited training in marketing (particularlyin advertising) and the usual absence of market-ing exp>erience are drawbacks for product man-agement. They complain, also, that higher com-petitive compensation levels for the MBA tend toupset established wage patterns.

With the exception of two major packagedgoods producers, the companies interviewed hadreduced their reliance on the graduate businessschool as a primary recruiting source for productmanagement. Five had eliminated this sourceentirely. They were recruiting instead from adver-tising agencies and other companies and weremaking internal transfers from sales, marketingresearch, and the like, in order to obtain peoplewith marketing experience. Some of these peoplemay already have their MBA degree, which isconsidered a plus, but the emphasis is beingplaced on marketing experience.

Slowing Job Turnover

Simultaneously, eight of the companies wereupgrading the position and attempting to holdincumbents in the job for longer periods. This hasnot been easy, since the job attracts high-potential, well-motivated individuals who con-sider product management a stepping stone tohigher management. To attract and hold goodpeople, companies in the past have advancedthem from assistant to associate to product man-ager to group product manager fairly rapidly.Switching to different product groups often oc-curred along the way.

This "churning" is felt to be undesirable. In-cumbents do not stay with a product long enoughto develop the desired product and market exper-tise. Furthermore, short-term assignments do notencourage the long-range planning that can en-hance market position. Through different hiringpractices and by providing incentives to remainwith a product longer, the eight companies hopeto increase product manager effectiveness. Othermanagements that would like to increase longev-ity in the job explain that they have been unableto do so because of rapid company growth.

Future Implications

In summary, over the years the product man-ager system has undergone a number of changesand it is still in the process of change. Because theposition corresponds to none of the classic line,staff, or functional positions it has never fit neatly

The Changing Role of the Product Manager 11

into traditional organizational structure. Yet forcompanies with many products it affords a bettermeans of product-by-product management con-centration than does functional organization. Forthis reason—and despite its acknowledgedproblems—most companies that are using theproduct management system plan to stay with it.

It is too early to tell whether the current trendto emphasize planning and coordination, anddeemphasize decision making, will resolve themajor problems. The same can be said for at-tempts to improve staffing and to lengthen in-cumbent tenure.

In some ways the product manager system ap-pears to be in tune with current organizationalbehavior theory, with its emphasis on groupcooperation and participative decision makingand its deemphasis of hierarchical authority pat-terns. The author found, for example, that thoseorganizations with the longest product manage-ment experience appeared to be most happy with

it, apparently because people throughout theseorganizations better understand the system.People seem to recognize the reasons for cooperat-ing with the product manager in the absence ofany formal authority on his part. The corporateadvertising vice-president of one long-time user ofproduct management emphasized this point:

What makes our system tick is not organiza-tion or who makes the decision, but some-thing more intangible—our people aretrained in the company system and everyoneknows how it works.

No doubt we have not heard the last of theproduct manager problem nor the last of change.Until a better idea comes along, however, we arelikely to see continued tise of the system and con-tinued efforts to improve it. Product managementhas been, and will continue to be, an intriguingsubject for organizational theorists and practicingmanagers alike.

MARKETING MEMO

Some Lessons from the Arts . . .

If, as many have argued, management really is an art, if leadership entails morethan analytic and statistical skills, it would make sense for businessmen to look at thecreative and performing arts to leam something about their own endeavors. Thereare three indispensable aspects of the artistic process—craft, vision, and communi-cation. Just as artists need to master their crafts, business managers need to perfecttheir skills in dealing with people and in expressing themselves verbally; just asartists need visions and passion to realize them, managers need imagination andaudacity to redesign their organizations; and just as great masters communicate theirvisions, great leaders inspire those who work for them. To complete this process,managers as well as artists need constructive criticism and models to emulate. Thusone of the obligations of top management is to teach and guide.

—Henry M. Boettinger, "Is managementreally an art?" Hanard Business Re-view, Vol. 53 (January-February 1975),pp. 54-64, at p. 54.