Function and effectiveness of product management institution in Indian consumer goods industry

Abstract

The Product Management Institution (PMI), a comparatively new organizational approach is gaining popularity among the Indian consumer goods manufacturing during the last decade and half. In this system, an individual is given the full responsibility for planning and implementing the marketing efforts product wise, cutting across the traditional functions like manufacturing, R&D, etc. As far as the researcher knows, no previous Indian study is available on PMI. This study is a maiden attempt to fill this gap in the marketing management. In order to sharpen our research focus, 40 executives were interviewed in 19 firms in an experience survey. Based on the experience survey and literature on PMI, three important research questions were developed. This study mainly focuses on these research questions: 1. What are the reasons for the introduction of PMI? 2. What are the problems while introducing and practicing the PMI? 3. What are the contributions of PMI to the overall organizational objectives? A semi-structured personal interview method was developed. In addition, detailed structured questionnaire focusing on what the product manager does and his influence on various activities was developed. Also, factual data were solicited. On the whole, the above three instruments focused on the three research questions. Nine firms representing pharmaceutical, cosmetics and food industries within consumer nondurable industry were chosen on convenient basis for the in-depth study. In total, 75 personal interviews were conducted with 20 top management executives, 15 marketing, 11 manufacturing and 29 product managers. Also, 60 usable questionnaires were obtained from the same respondents. The conclusions and recommendations of this research are based on the experience survey interviews (n=40); in depth interviews in nine consumer nondurable goods firms (n=75); structured questionnaire reponses from the same respondents (n=60); and factual data from the individual firms, productive managers, job descriptions, recruitment policies and training programme. The analysis of all the data indicates that the product management institution is an outcome of the organizational need to coordinate marketing effort especially in consumer goods where the field sales is supported by sales promotion and advertising. This structural change to some extent, can be theoretically explained by contingency model developed by Lawrence and Lorsch, the top management expects product managers to provide centralized information and to effect alternative solutions for the marketing problems; the product managers are mostly sales-oriented; they are not held responsible for profits by the top management in absolute terms; their decision making authority is not adequate with their responsibility; the product managers are mostly recruited from internal functions like sales; the training of the product manager is inadequate; in practicing PMI, the product managers face inadequate information, authority responsibility gap, planning problems, and these problems are related to inadequate training. Their first contribution is in coordinating marketing effect, especially sales promotion; the second contribution is in reducing packaging costs and the third contribution is in the introduction of new products, and their least contribution is in the area of manufacturing and distribution costs. From the above conclusions, fifteen recommendations were developed. It is sincerely hoped that these recommendations will throw deeper insights in practicing PMI in the consumer goods firms; that the firms contemplating the introduction of PMI will find them useful; and those firms practicing PMI will find ways to refine their practice for better contributions from the Product Management Institution.