By Kutler, Jeffrey
American Banker , Vol. 151
ATLANTA -- As part of its assault on the financial industry, Sears, Roebuck and Co. has embraced the latest trend in service marketing, one that remains alien to traditional bankers.
The approach -- product management -- was mastered years ago by consumer goods giants such as Procter & Gamber and General Foods. Although many banks and savings institutions have become interested in the technique, even to the point of hiring talent from those firms, it has yet to find its way into the mainstream of bank marketing culture.
New competitors such as Sears, already accustomed to close monitoring of consumer preferences, are bringing product management expertise with them. They typically assign an individual or small team to research markets and develop products tailored for chosen segments.
According to Sears Savings Bank vice president Rick Wright, failure to adopt product management could be the banks' downfall. He said they need product management if they are to identify their strengths and opportunities in the face of increasingly savvy, market-oriented competition.
Mr. Wright should know. In three and a half years at Glendale, Calif.-based Sears Savings Bank, he has drawn from his own experience working for three paragons of product management: Black & Decker, Pet Inc., and Disneyland.
He is one of a growing number of marketers and consultants with consumer product backgrounds playing a role in the banking industry.
Product management is already well entrenched in banks' corporate cash management business, an outgrowth of the practice at General Electric Co. GE is a product management pioneer and leading provider of cash management networks.
In consumer banking, the product management concept has been promoted with mixed success by consultants such as William Wichman Associates of Cincinnati, Ohio; and Glendenning Associates and Marketing Corp. of America, both of Westport, Conn. All three were organized by former Procter & Gamble people.
Product management proponents are heartened by the fact that Richard S. Braddock, the head of Citicorp's worldwide individual banking activities, previously worked in packaged goods marketing at General Foods.
But product management is still rare enough on the retail side that when Mr. Wright gave a speech on the subject at a recent Consumer Bankers Association Conference in Atlanta, it came as news to most bankers there.
Mr. Wright's most visible accomplishment as marketing director of Sears Savings Bank was its name change within the last two years from Allstate Savings & Loan Association. But behind the scenes, he has instituted product management procedures as advanced as any in the financial services industry.
"Product management is a good idea for our industry because in traditional institutional structures, no one person is responsible for a product. It's amazing what happens when somebody is assigned to be product manager, to 'own' a product and take that kind of close interest in it," he told the Consumer Banker group last week at a conference appropriately titled, "Innovations in Retail Bank Products."
"I wound also recommend that you have a 'product champion' who can seize an idea and carry its energy forward," mr. Wright continued. "It is more likely to be successful under a product champion than under committee direction, where things are managed inefficiently and tend to fall through cracks."
He recalled an example at Pet Inc., whose Laura Scudderhs snack-foods brand grew after a product manager was assigned to some small-selling lines such as pretzels and caramel corn. "Sales were up 10-fold in six months simply because someone cared about those products," Mr. …