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Marketing : UNIT-V MARKETING ORGANIZATION AND CONTROL

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Marketing
Brand Updates;Brand Reviews;Brand Analysis;marketing notes;

MONDAY, JANUARY 3, 2011

UNIT-V MARKETING ORGANIZATION AND CONTROL

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Organization is defined as a group of people working together to achiev e common goals and objectiv es of the business. Marketing organization prov ides a v ehicle for making decisions on products, marketing channels , phy sical distributions, promotions and prices. Marketing Organisation: Marketing organization is the framework for planning and making marketing decision that are essential to marketing success. It is the v ehicle for making decision on all marketing areas such as product, price, place and promotion. Marketing organization is a group of marketing persons working together towards the attainment of certain common objectiv es. Marketing organization prov ides a sy stem of relationships among v arious marketing functions to be performed by coordinating among marketing people. Need for the organization: to be competitiv e in the market where consumer is the king we need to satisfy the consumer. So a good marketing organization is required to satisfy the customers. Marketing organization is the pillar for success for many organizations and prov ides a framework for the following:
a. b. c. d. e. f.

Div ide and fix authority among the sub ordinates To locate responsibility To establish sales routines To enforce proper superv ision of sales force To av oid repetitiv e duties To enable the top ex ecutiv es to dev ote more time for planning policy matters

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FACT ORS AFFECT ING MARKET ING ORGANIZAT ION Factors influencing marketing org can be categorized into internal and ex ternal factors . Internal: 1 . Top Management Philosophy : Organizational planning and its working is greatly influenced by philosophy which can be good or bad eg: Centralization V s Decentralization 2. Product policy : the width of product line of an org determines its size as the product offerings becomes increasingly div erse. Eg: There could be a need to mov e away from straight functional approach to product group approach. 3. People: The size of the organization is not an important factor in terms of number of people but it is important with respect to human v alues which are critical and correct decisions regarding people cannot be made unless taking into consideration Number Qualifications Capabilities Personality Attitude Fear

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Marketing : UNIT-V MARKETING ORGANIZATION AND CONTROL

Are some of the abov e intangible factors which affect the marketing organization? Ex ternal Factors: 1. Business Env ironment: With regards to business env ironment three points are important. 1. The ty pe of env ironment in which the firm is operating in terms of operations and size. 2. The Nature of particular requirement for success in a giv en business which again size. determines the

3. The rate of change in industries being serv ed which again decides on its size and working.
2.

Markets: This is the factor which again affects the marketing organization i.e. one should note about its a. Size b. Scope c. Nature d. Location

Based on the abov e aspects we need to design the size of the organization. 3. Consumer requirements and ex pectations: Consumers hav e their own set of requirements and ex pectations from the organization. The more v aried and v iv id serv ices they ex pect that the usual requirements. as a marketer we need to increase the workload depending upon the consumer requirements and ex pectations 4. Channels of distribution: It is the ty pe of channel of distribution which a marketing firm selects based on its size. Egg : Incase the company opts for indirect channel or channels it depends on outside sales force and hence the organization gets thinner .When the organization selects direct channel its size is increased as it has its own sales force.

T Y PES OF MARKET ING ORGANIZAT ION ST RUCT URES Ty pes of marketing organization structures: The marketing organization of a business can be structured on any of the following basis: a. Line and staff organization b. Functional Organization c. Product oriented marketing organization d. Customer oriented marketing organization e. Geography oriented marketing organization f. Matrix form / Combined base

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UNIT-V MARKETING ORGANIZATION AND CONTROL

1 . Line and Staff Organization: In most business forms especially medium size the marketing job is structured around few line functions and few staff functions i.e. Major staff functions is organized into separate department and the line function is responsible for sales department. The required coordination between the line and staff function is managed by the ex ecutiv e at higher lev el. Merits: 1 . Prov ides ex pert adv ice from specialists 2. Reliv es line ex ecutes of routine, specialize functions 3. Enables y oung sales ex ecutiv e to acquire ex pertise 4. Helps in achiev ing effectiv e coordination 5. Easy to operate 6. Less Ex pensiv e Demerits:
1. 2. 3. 4.

CONSUMER BEHAVIOUR Project Titles For Marketing Marketing Management Important Questions MBA HR PROJECT TITLES

Produce confusions arriv ing from indeterminate authority relationships Curbs the authority of ex perts Too much is ex pected from ex ecutiv es Decision making is taken by top management

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2. Functional: Under the organization the departments are created on the basis of specified functions to be performed i.e. The Activ ities related to marketing, distribution etc Merits: 1 . Div ision of work base on specialization 2. Reliv es line ex ecutiv es of routine and specialized functions 3. Promotes application of ex pert knowledge 4. Helps to increase ov erall efficiency Demerits:
1. 2. 3. 4. 5.

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Leads to complex relationships Makes coordination ineffectiv e Promotes centralization Lack of proper coordination Delay in taking decisions

3. Product Oriented Marketing Organization: Organizations that produce wide v ariety of products often organize marketing, training and promotion with respect to a product. Merits: 1. The salesmen can render better customer serv ice as they possess good knowledge of

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Marketing : UNIT-V MARKETING ORGANIZATION AND CONTROL

product and may hav e close contacts with customers. It makes indiv idual departments responsible for the promotion of specific products. It facilitates effectiv e coordination
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Demerits:
1. 2. 3.

It increases the employ ment of a number of managerial personal Many salesmen of same enterprise attend same customer each representing a separate product which creates confusion in the minds of the customer. There may be duplication of activ ities

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4. Customer Oriented Marketing Organization: When the departmentation of sales organization is done on customer basis it is called customer oriented marketing organization. Deparmtnetation by customer may be done in enterprise engaged in prov iding specialized serv ices to different classes of customers. Merits:
1. 2.

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It takes into account needs of each class of customers. IT prov ides specialization among the enterprise staff

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Demerits:
1. 2. 3. 4.

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It makes coordination difficult It may lead to under utilization of resources in same department There may be duplication of activ ities These ty pes of sales organizations are not suitable for small enterprises.

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5. Geography /Territory : In a territory oriented marketing organization , the responsibilities for marketing of v arious products rests almost entirely with line ex ecutiv es .The territory managers are giv en v ary ing nomenclatures like depot manager, district manager, area manager, zonal manager , div isional manager etc. Merits:
1. 2. 3.

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It leads to economy in terms of times and money It helps in taking knowledge of local customers It helps in effectiv e control

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Demerits:
1. 2.

It requires employ ment of number of managerial personnel. It dilutes control from head quarters

Marketing Control: Marketing control is concerned with analy zing the performance of marketing decision, identify ing the problem/opportunities and taking actions to take adv antage of opportunities and resolv ing problems. It is the sequel to marketing planning. All manager need to ex ercise control ov er their decision and marketing operations. Specifically marketing performance is measured in terms of market share, sales, profits. Hence most control measures are designed with these parameters in mind. But today 's marketing needs to measure the following. a) b) c) d) e) Market share Sales and profits Marketing effectiv eness Customer satisfaction Customer perception of the firms and its brands

There are four ty pes of controls with different objectiv es and tools and ex ist with different lev els of management. 1 ) Annual plan control: It is with top or middle lev el mgmt to ev aluate actual performance with targeted to analy ze differences or gaps. The tools used are sales analy sis, market share analy sis, sales and ex pense ratios, and financial analy sis. 2) Profitability control: It is used by marketing department to ex amine profitability by product, territory , customer segment and trade channel. 3) Efficiency control: It is used to asses the effectiv eness of money spend on sales force, adv ertising, sales promotion and distribution. It is used by both line and staff ex ecutiv es. 4) Strategic control: It is used by the top mgmt to ex amine wether the firm and marketing capable to cope with env ironment or not. The major tool used here is marketing audit. Marketing Control Process: Marketing Control Process includes monitoring, ev aluating and improv ing the performance in each activ ity . There are six steps in this a) Decide the aspect of marketing operation to be ev aluated: The first step in mcp is deciding about the marketing operation to ev aluate. Eg: effectiv eness of media for product adv ertisement, sales person performance, or performance of company product Establish measurement criterion

b)

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Marketing : UNIT-V MARKETING ORGANIZATION AND CONTROL

In this stage performance standards are decided against which actual performance is ev aluated. Eg: control sales person performance, in this one can measure new accounts obtained, call frequency ratio and order per call c) Establishing monitoring mechanism After setting the standards, the nex t step is to dev elop monitoring mechanism tools like marketing information sy stem(MIS). MIS is used to record performance of all marketing areas like monthly sales v olume for products. d) Compare actual results with standards of performance In this stage, results obtained through monitoring process are compared with pre established standards of performance. e) Analy ze performance improv ement If the results/performance are not up to the desired standards, a correctiv e action is to be taken to enhance the performance lev els. For this performance improv ement analy sis is to be done.

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Marketing Audit:
Definition: Marketing audit is sy stematic rev iew and appraisal of the basic objectiv es and policies of marketing function and of the marketing organization methods, procedures and personal employ ed to implement those policies and to achiev e those goals. Marketing audit is one of the important tool to asses the effectiv eness of different marketing mix elements. Ty pes of Marketing Audit: Marketing Env ironment Audit: It is div ided into two groups i.e macro env ironment and task env ironment. Macro env ironment audit includes analy sis of political, economical, technological and cultural aspects. Task env ironment audit cov ers customers,competitors, markets, dealer/distributors, suppliers, marketing firms and public. Marketing Strategy Audit: This audit rev iews firms marketing mission, objectiv es, goals, and strategies and to appraise their adaptability to present and future env ironment. Marketing Organisation Audit: The audit ev aluates the firms capability in implementing necessary strategies for the future env ironment. It also rev iews formal organization structure and efficiency . Marketing Sy stems Audit: It ev aluates the subsy stems of a sy stem such as marketing information sy stem, marketing planning sy stem, marketing control sy stem and new product dev elopment sy stem. Marketing productiv ity Audit: This audit critically ex amines the profitability of different marketing entities and cost effectiv eness of different heads of marketing ex penditure. Marketing Function Audit: It is a functional audit mainly cov ering marketing mix components namely product, price, place and promotion (adv ertising, sales promotion, sales force and publicity ).

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