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A CEO's role in brand building.

These seven guidelines for product development at The Dial Corp. show how the CEO can be a catalyst for vigorous brand management.

The brand manager holding sway as the ultimate decisionmaker on product and marketing decisions is a familiar scenario at many consumer companies. Not at The Dial Corp! Until seven years ago, at Dial, it was traditional for brand managers to present a finished product to the CEO after all the tests were done, the pricing and packaging completed, and the advertising and promotions schedules set. All that was needed was for the CEO to give approval to launch the product.

Today, that process has been altered.

The tremendous cost of creating and testing new products, the length of time it takes to develop these products, along with the limited success ratio of new introductions caused a change in my philosophy of product development and personal involvement.

At Dial, we have business teams, each one with its own marketing niche; advertising, marketing, manufacturing, and packaging experts; and support staff. Every unit's mandate is to increase profits. Sales and market share are secondary in importance, and not emphasized in the total aggregate if they don't contribute to the profit picture.

As the chief executive officer, I'm involved in the development of most of our new products. My position, as I see it, is to double-check the system, to make sure the "team" is on track, and to play the devil's advocate.

My first source of information has always been the world around me. I stay close to the market. I regularly visit grocery stores, drug stores, and mass merchandisers to check out the competition. I shop for products in our categories. I use a variety of new and existing products on a regular basis and compare them to other top products on the market -- along with my family, who constantly provides me with direct feedback.

I continue to raise the level of expectation for the brand teams to a higher level than they thought possible. To challenge them to do the impossible, or what they thought was impossible. To create an atmosphere where they never stop learning, where attention to detail can make or break a product. For example, one or two wrong words on a label can cause problems in the marketplace, even failure. And the opposite of that -- omission of the right words -- can also be


But, after all is said and done, the details of developing products and packaging gets down to a series of judgment calls. You can conduct all the surveys and tests in the world, but the final yea-or-nay decision gets down to your experience and basic instincts. Nobody is going to be right 100% of the time. But your successes had better outweigh your failures.

Dial's Product Development Guidelines

Here is a list of seven guidelines that we use in product development at Dial:

1. Schedule three types of meetings. These are operational reviews, technical development meetings, and one-on-one meetings for products.

Dial's operational review meetings are held quarterly at the Phoenix, Ariz., headquarters and are informational presentations by the company's three consumer products divisions: personal care, household and laundry, and food. Approximately 80 staff members attend -- myself, along with division general managers, brand managers, plant managers, research and development, packaging, distribution, and consumer information representatives. Two days of intense meetings provide all teams with enough information to keep everyone on track and with an updated business plan.

Technical development meetings are held twice a year at Dial's research and development center in Scottsdale, Ariz. These are specific presentations of new products or reformulations of established products. Presentations are made to me by the research and development staffs of Dial's three divisions. Approximately 20 persons attend, including brand managers, business managers, scientists, perfumers, and packaging and advertising experts.

One-on-one meetings are held as needed, with me and the business teams, as crucial benchmarks in development are reached. These meetings are often attended by the division general manager and about three to five members of the marketing team. I've found working with a small group allows for immediate decisionmaking and moves the project forward quickly. There are no layers of management to contend with and, therefore, no place to hide.

2. Develop and encourage the teams and listen to all their ideas. It is crucial during the early stages of development that every member of the team feels confident that he or she can present ideas in an open and unbiased forum. Many ideas are "off the wall," but from some of these crazy thoughts the creative winnowing process often develops a good, marketable idea.

3. Test products on a blind basis. We used to develop a concept, find out what consumers would say about it, develop the product, and then check with consumers to see whether the product fits with that concept. Today, we work diligently to first find out what consumers are thinking and what they need and want, then we try to create that product. We test those products with no promoting or "leading," to determine what consumers really think of our concept or prototype product. And we also match test against the best products in the marketplace.

4. Develop gold standards and then test your products against them. When we are entering a new category or introducing a new line, we first set up a gold standard for each item -- what the best elements are that would make up the "perfect" product. Then we attempt to build a product to fulfill those requirements. This establishes us on an unwavering course to maintain our high standard of quality products rather than waste time with issues which take time and money and impact the overall quality of the product.

5. Maintain flexibility to handle change. We have our antennas up constantly as to what is happening, what is changing in the marketplace. What was true three years ago is not true today, and won't be true next year. Change is accelerating so fast that what I've said at the beginning of this article has probably changed by the time you have read this far. Shifts in distribution have been dramatic, and the types of markets we sell to today were unheard of five years ago. We have a very flexible management style at Dial and feel we can respond to changes quicker than most big corporations. Our flat organization with only three layers of management allows us to be nimble and make decisions immediately. It's not a matter of committee meetings. We have an immediate response time.

6. Keep it simple. It's a common problem that everyone tries to get too fancy with products and thereby make them too different from what the public recognizes. When we develop recipes we stick to the tried-and-true and don't get exotic. Fancy ingredients are not only costly but consumers don't care about them. Just give the consumers entrees they know, love, and recognize. They should not have to guess what a name means or what they are getting for their money. In other words, no gimmicks.

7. Improve your quality and lower your costs. Over the past five years, we have steadily improved the quality of our household and laundry price/value products, like Purex detergents, narrowing the gap between our products and the market leaders. Before, we didn't even bother to test against the leaders. With our stable of price/value brands, there were people who thought we couldn't offer the same performance. Today, we provide parity performance by using technology and by giving consumers the things that they need and want yet still offering them at price/value. So, we have increased the quality while lowering the cost at the same time. That's not easy to do, but I'm proud to say we have done it time and again, and will continue to maintain this program.

It also should not be overlooked that I do have the final approval on all plans and dollars to be spent. We are intense in our desire to make sure that the marketing dollars spent give us a payback.

Each quarter, we tear the P&Ls apart and where there are weaknesses, we correct them. I call it peeling back the onion. With each peel, you learn something. And we keep peeling until we are satisfied that we have all the facts needed to make a proper marketing decision.

No System Is Perfect

Even with all of our controls, with all of the attention to detail, we still make mistakes. No one or no system is perfect, and the old adage that "if something can go wrong it will" still happens too often. But the key is to keep striving to make the program as error-free as humanly possible.

Business is a risk, and either you enjoy taking risks or you don't. I believe in what Theodore Roosevelt said: "Our country calls not for a life of ease but for a life of strenuous endeavor."

John W. Teets is Chairman, President, and Chief Executive Officer of The Dial Corp. With annual revenues in 1992 of $3.4 billion, the company operates in a wide range of consumer products (in the personal care, household and laundry, and food categories) and services businesses. Teets first joined the company in 1963, rejoined it in 1975 after seven years in other food service industry posts, and became CEO in 1981 and chairman the following year. Formerly known as The Greyhound Corp., the company has undergone significant restructuring throughout the 1980s and early '90s, and was named The Dial Corp. in February 1991.
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Title Annotation:Building Brand Strength
Author:Teets, John W.
Publication:Directors & Boards
Date:Jun 22, 1993
Previous Article:The challenge for brands.
Next Article:Best practices in brand management.

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