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Marketing Organisation Structures


MARKETING ORGANISATION STRUCTURES

Organisation is not an end in itself, but a means to the end of business performance and business results (Peter Drucker), organisation structure is an indispensable means for good business performance. The structure must be so set up as to make it possible to attain the business objectives.

Planning is followed by organisation. Before a company can put its marketing strategies into operation, it must establish an organisation structure, that is, a set of relationship among individuals with different responsibilities. The way a company organizes its marketing activities depends on the emphasis placed on marketing in the company, which in turn, depends to a large extent on whether the company is production, sales or marketing oriented.

There is no one organisation structure that meet the divergent needs and pressures of all company’s marketing function it would often depend on the following factors:

a.   The quantity of sales,

b.   Different products or product lines produced and marketed;

c.   Different kinds of customers served,

d.   The wide geographic areas covered by the salesmen. Sometimes   peculiar   organisational   arrangements   exist which are focus towards the unique needs of the company.

Types of Marketing Organisation Structures

The   marketing   department   or   structure   could organised as follows:

1.   Function oriented structure.

2.   Product oriented structure

3.   Market oriented structure

4.   Regional or geographically oriented structure

5.   Combined type structure.

Function Oriented Structure

Under this type of structure, the activities are grouped on the basis of function to be done as product planning, marketing research, advertising, sales, physical distribution, and customer service. This is the most simple and common type of basic organisation structure of marketing tasks. The work of the marketing department is divided according to activities or functions, and the managers assigned report to a marketing director who in turn reports to the company’s managing director. The number of sub functions varies from organisation to organisation taking into account its nature, size, and area of its operation.

The function oriented marketing structure is appropriate when a company’s products, territories and customers are quite similar.

The marketing director is a member of .the company top management team and is responsible for all aspect of the company’s marketing operations. The product planning manager is responsible for new product development and planning. The marketing research manager is responsible for research related to the company’s market, and for sales forecasting. The sale manager is concerned with all sales operations. The physical movement of goods, whereas the customer service manager is responsible to the customers and handles complaints, orders and other customer related matters.

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Advantages of Function Oriented Structure

i. Because the marketing function is divided into various sub functions and each sub function is performed and controlled by an efficient manager, various activities are carried on efficiently.

ii. There is elasticity in the organisation. The sub -activities may further be divided with the increase in size of the organisation.

iii. It is simple to administer

Disadvantages of Function Oriented Structure

i.         Less attention is given to the product and the market.

Functional specialists tend to give little or no attention to slow moving products. Sometimes  functional   specialists  concentrate  on   the development of his function to the detriment of other functions. Conflicts may arise, which at times becomes difficult to resolve.

Product Oriented Structure

When a company’s products are quite numerous or very different the product oriented marketing structure may be suitable. This structure is viable when each product or product group is able to generate sufficient sales revenue to neutralise the duplication of the product oriented structure. Involves designating a manager to take charge of each of the company’s products or groups of products. This type of structure with product manager enable concentration of attention on the performance of a particular brand.

The product oriented marketing structure is not a substitute to functional specialists to perform some of the line functions like advertising, sales promotion, marketing research which the product manager may not have authority for. The product manager takes and executes decisions regarding matters like advertising and sales promotion after taking necessary “‘ suggestions from the advertising manager and sales promotion manager respectively.

Advantages of the Product Oriented Structure

(i)     This   type  of  structure  is   best  suited  to  industries producing different products or brands, (ii)   Every department can be controlled efficiently by the department in charge, (iii)  The  performance   of  different   departments   may   be evaluated and compared, (iv)   It stresses on specialization and helps in increasing the efficiency of the personnel.

Disadvantages of the Product Oriented Structure

(i) It may be a source of conflict, particularly between the personalities of the product managers and other managers in the marketing team.

(ii) Where the product manager is not given authority commensurate with the responsibilities expected of him, frustration and disillusionment will result.

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(iii) The product oriented marketing structure may be unable to justify the costs of its implementation.

(iv) The product manager is sometimes confused with as how to be familiar with different jobs.

Market Oriented Structure

The market-oriented structure is the same as a customer oriented marketing structure. Under this type of structure, concentration is on the types of customers which fall into different groups in terms; of buying practice’s or product preference. Thus customers or markets can be grouped as consumer, industrial or government markets. Figure 4.3 depicts the form’of a market oriented structure.

Advantages of Market Oriented Structure

(i) A .company that adopts market oriented structure is better dispose to satisfy the needs of its customers.

(ri) A market manager, just like his product manager counterpart becomes expert about his market-, thus promoting greater efficiency and effectiveness in that market segment.

The market oriented structure enable the company to give full attention to each class of customers and their problems can be well understood by the organisation. The organisation comes in contact with the customers regularly. It then becomes easier to the organisation to estimate their demands and satisfy them.

Disadvantages of Market Oriented Structure

(i) The market managers may so concentrate on achieving success for their different markets to the expense of the overall company objective.

(ii) There is the likelihood, for conflict among the different manager who may be pursing their short-term objectives.

Regional or Geographically Oriented Structure

This type of structure is used by big companies who serve large number of customers spread over large territory. The markets of such companies are usually large enough to be capable of being sub-divided into distinct geographical units. The structure is based on regional basis duties and specific areas are assigned to different persons.

Each region is sub-divided under the sale supervisor. Their numbers depend upon the characteristics and requirements of the particular region. Each supervisor is given some salesmen who are under his direct control. In this way the market is fragmented into sale territories, which may be a district, division or region.

Advantages of Regional or Geographically Oriented Structure

1.   This types of structure is suitable for big organisations having their sales net throughout the country.

2.   There is efficiency and effectiveness in the discharge of duties.

3.   It   enjoys   all   the   advantages   of   functional   type organisation.

4.   The   organisation   regularly   is   in   touch   with   the customers.     It comes to know the changing habits, fashion and needs of the customers of every region and therefore, can make necessary change in its product within a short span of time.

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Disadvantages of the Regional or Geographically Oriented Structure

1.  It is not suitable for small organisations, as it is much expensive.

2.   Communication gaps and bottlenecks may develop.

3.   Co-ordination of the activities of the various regions may pose a problem.

4.   The different regional set-ups may begin to work against each other, thus resulting to outright conflict.

5.   Each division has its separate entity for marketing the product in its area.

Combine Type Structure

The above four types of marketing organisation structures are basic concepts regarding organisation structures. Rarely do we find marketing organisation structures in its original form in an organisation. In practice, a combination is normally in use. The combinations can be as follows:

1.   Functional  oriented  structure   with  regional  oriented structure

2.   Functional oriented structure with the product oriented structure

3.   Market oriented structure with  the product-oriented structure.

Suitability of the Marketing Organisation Structure

We have discussed the four basic concepts of marketing organisation structure, including the combine type of marketing organisation structure. The type of structure that is suitable to a company depends very much on the size of the business, the nature of the business and its customers. We can match the suitability as follows:

1.   The functional oriented marketing organisation structure is suitable for small enterprise, which produces only one type of product.

2.   The product or market oriented marketing organisation structure is suitable for a big business having its sales-net throughout the country.

3.   The customer oriented marketing organisation structure is suitable for an organisation that have different types of customers.


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