Marketing

Organization
 The Evolution of the
Marketing
Department

Figure- Stages in the

Evolution of the
Marketing Department
 Marketing
Organization
Simple Sales Department
Sales Department With Ancillary
Marketing Functions
Separate Marketing Department
Modern Marketing Department /
Effective Marketing Company
Process-And Outcome-Based Company
Marketing Organisation
Functional
Geographic
Product/Brand management
Market Management
Matrix
 Functional

Combination
Plan Geographic
Ways to Carry
Out Marketing
Activities

Market Product
Management Management
 Marketing Organization
Organizing the Marketing Department
Functional Organization
 Field sales
 Customer service
 Product management

Geographic Organization
 Area market specialist

Figure :
Functional
Organization
Marketing Organization
Product- or Brand-Management Organization
 Product and brand managers have these tasks:
 Develop a long-range and competitive strategy for the product

 Preparing an annual marketing plan and sales forecast

 Working with advertising and merchandising agencies to

develop copy, programs, and campaigns

 Stimulating support of the product among the sales force and

distributors
 Gathering continuous intelligence on the product’s

performance, customer and dealer attitudes, and new problems

and opportunities
 Initiating product improvements to meet changing market

needs
Figure :
The Product Manager’s
Interactions
Marketing Organization
 Pearson and Wilson’s five keys to make the product-
management system work better
 Clearly delineate the limits of manager’s role

 Build a strategy-development-and-review process

 Take into account areas of potential conflict

 Set up a formal process that forces to the

top all conflict-of-interest situations

 Establish a system for measuring results

 Marketing
Organization
 A Second Alternative is to switch from
product managers to product teams
 Vertical product team

 Triangular product team

 Horizontal product team

 Third Alternative: Brand Asset

Management Team (BAMT)

Figure : Three Types

of Product Teams
Figure : Managing Through Teams at Kraft
Marketing Organization
Market-Management/Customer
Management Organization
 Market-management Organization
 Markets manager

 Customer-management Organization

Product-Management/
Market-Management Organization
Figure : Product- / Market-Management Matrix System
Marketing Organization
Corporate-Divisional Organization
 No corporate marketing
 Moderate marketing
 Strong corporate marketing

Marketing Relations With Other Departments

R&D
Engineering and Purchasing
Manufacturing and Operations
Finance
Accounting and Credit
Marketing Organization
Building a Companywide Marketing Orientation
Transforming into a true market-driven
firm requires:
 Developing a companywide passion for customers
 Organizing around customer segments

instead of around products

 Developing a deep understanding of customers through

qualitative and quantitative research

Marketing Organization
 What steps can a CEO take to create a market and customer
focused company?
1. Convince senior management of the need
2. Appoint a senior marketing officer and
a marketing task force
3. Get outside help and guidance
4. Change the company’s reward measurement and system
5. Hire strong marketing talent
6. Develop strong in-house marketing training programs
7. Install a modern marketing planning system
8. Establish an annual marketing
excellence recognition program
9. Shift from a department focus to a
process-outcome focus
10. Empower the employees
Marketing Organization
 Injecting More Creativity
Into the Organization

Strategic innovation
resource: Brighthouse

22-17
 Different Methods of Organizing a Marketing
Department

a. Marketing and promotional mix elements

b. Facilities or services
c. Geography
d. Customer groupings
e. A combination of two of the above four criteria
Marketing Control
Marketing Control involves evaluating the results of
marketing strategies and plans and taking corrective
action to ensure that objectives are attained.
Strategic Control involves looking at whether the
company’s basic strategies are well matched to its
opportunities

Operational Control involves checking ongoing performance

against the annual plan and taking corrective action when
necessary
 Strategic Control - “Doing the right things”

Operational Control - “Doing things right”

 *** PLAN YOUR WORK ***

OPPORTUNITIES THREATS

External

Internal

STRENGTHS WEAKNESSES

*** WORK YOUR PLAN ***

Strategic Control - “Doing the right things”

1. Scan the External Environment

2. Match Strengths to Opportunities
3. Convert Threats to Opportunities
4. Minimize Threats as best you can
Operational Control - “Doing things right”

1. Efficiently Execute your Marketing Plan

2. Convert Weaknesses to Strengths
3. Minimize Weaknesses as best you can
 Set Measure Evaluate Take
Goals Performance Performance Corrective
(what is (Why is it Action (what
(What do happening?)
we want happening?) should we do
to about it?)
achieve?)

25
Marketing Control
Budget
Profitability
Efficiency (Productivity)
Strategic
Budget Control
Measurement of results against monthly/quarterly
budgets (goals)
Reasons for deviations (variances)
Remedial steps to be taken to close the gaps
between performance and goals
Review performance in the next month/quarter and
assess results
Benchmarks for Efficiency
against last year % growths
against budget % variances
against targets % market share
Marketing Expense
Sales Force Sales Administration
Advertising Public Relations
Sales Promotion Direct Marketing
Market Research
Financial Analysis
RONW - Net Profits/Net Worth profit margin *asset
turnover*financial leverage
Increase margins by increase in sales or reduction in
costs or both
Increase asset turnover by increasing sales or
reducing the assets (inventories, debtors) against a
given level of sales
Figure : Financial Model of Return on Net Worth

22-31
Market based scorecard analysis
Customer-performance scorecard
Stakeholder-performance scorecard
 Profitability Control
80 : 20 rule
Product rationalisation
Customer rationalisation
Costing Analysis
Efficiency Control
Sales force efficiency
Advertising efficiency
Sales promotion efficiency
Distribution efficiency
Sales force Efficiency
No. of calls per salesperson per day
Average revenue per sales call
Average cost per call
Average call time per call
No. of new customers per period
Sales force cost per unit sales
Advertising Efficiency
CPT
Before and after measure of attitude towards the
product
No. of enquiries per ad
Cost per enquiry
Sales Promotion Efficiency
% sales sold on ‘promotion’
Display cost per sales rupee
% coupons redeemed
No. of enquiries resulting from a demonstration
Distribution Efficiency
Time taken to execute orders
% order executed
service levels
Figure : Dynamic
Interactions Between Sales
Orders and Distribution
Efficiency
Other Control Measures
Marketing Effectiveness Review
- customer philosophy, integrated marketing organization,
adequate marketing information, strategic orientation and
operational efficiency
Marketing Audit
- comprehensive , systematic, independent and periodic
review of a company’s business environment, objectives,
strategies and activities with an idea to identify areas of
weaknesses and recommend a plan of action to improve
on such areas.
 Control Process for the
Marketing Plan

a. Setting standards based on plans

b. Measuring performance against standards
c. Correcting deviations from standards and plans
Evaluation and Control
The Ethical and Social Responsibility Review