MARKETING ORGANIZATION

An organisation is defined as a ''Group of people working together to achieve certain objectives". It established a set of
relationships among the various functionaries and also helps in coordinating the activities. The organization comes into
existence depending upon the activities to be per-formed for a particular objective. There are usually a variety of activities to
be undertaken for achieving the objectives. The activities are grouped into particular groups depending upon the convenience
headed by someone at the proper level. While undertaking the grouping of activities, the responsibilities as well as the
relationships of each functionary and functions are clearly stated in addition to proper coordination methods.

The marketing functions however are unique in nature as compared to other functions because of its dynamic and
strategic importance to the organisaton. The marketing objectives will decide the nature of the mar keting functions and the
structure of the marketing organization. The structure or composition of' the marketing organization is thus decided on the
basis of the various functions to be carried out in order to achieve the marketing objectives, which ultimately decides the
company objectives.

The evolution of marketing organization took place hand-in-hand with the changes in the marketing concept. As we have
seen earlier the marketing concept also underwent several changes and the marketing organisation also kept pace with the
changes. However, there are still a few companies which do not understand the difference between the. selling and
marketing. Such companies have sales department and concentrate on compelling the customers to buy their products and
arranges to deliver the same to the customer.

Most of the organizations have realised the need for having separate marketing department with the on set of competition
in the market. The modern marketing organization can be traced to five stages of its development

(1) Sales department with purchasing function:

All companies have four basic functions. They are managing finance personnel, production and sales. The sales activities
were looked after by the Sales Manager,
In certain cases the Sales Manager was also entrusted with the task of purchasing, especially in small firms

(2) Sales Department:

The growth of market made it necessary to bifurcate purchase and sales, and a separate sales department was created. The
sales manager looked after the sales management. He also undertook other activities needed for the market such as market
research, advertising etc. with the help o: experts in the field

(3) Emergence of marketing department:

The growth of the market and the competition faced by the companies compelled the companies to go in for other
marketing functions such as sales promotion, product development, distribution innovations etc. These activities required a
full fledged marketing department to look after all activities connected with marketing. The marketing manager functioned by
coordinating the activities of marketing along with the sales manager.

(4) Modern marketing department:

The creation of additional marketing department and sales department created problems in the smooth functioning and
coordination of activities. The sales manager wanted more resources for sales and the marketing manager wanted equal
treatment to all ingredients of marketing. This led to the creation of a marketing department headed by a senior marketing
executive, under whom the sales department also functioned.

(5) Marketing philosophy:

The creation of a marketing department did not guarantee the development of a marketing culture by all departments and
people in the company. When all departments'. objectives become the service to the customer and marketing is treated as a
philosophy of the company, then the entire company can be considered as a modem marketing company. All business
enterprises, whether in production or in service, now aim at this philosophy. The case of IBM is considered as an ideal
example for this.

Decision Variables:

There are many issues to be considered for deciding the type of marketing organization required for a particular company.
Some of them are indicated below:
 The nature of the company i.e. whether it is a manufacturing company, marketing company or both.
 The nature of marketing - whether the company is marketing directly or it is marketing through selling agents.
 The nature of area coverage - whether the company cover only territory, nation etc.
 'The nature of the products and their range.
 The nature of customer service and its coverage.

4 Marketing Organisation Set-up

  The nature of physical distribution activity required to be taken by the firm i.e. transportation, warehousing etc.

After considering the above issues, the management has to consider the methods on which the marketing organization can
be built up in a company. The following methods are often adopted for setting up marketing organizations. These are based
on the marketing activity of the company.
They are:
(1} Functional organization.
(2) Geographical organization
(3) Product management organization.
(4) Market management organization.
(5) Product / Market management organization
(6) Divisional organization.

(1) Functional organization:

Under this method, each function is looked after by a specialist and report to the marketing manager. The functions are
administration, advertising and sales promotion, sales, marketing research, new products, custom service, distribution,
planning, etc. If the number of such direct reporting persons is more, then interrelated activities are grouped into a single
function under a senior management. For example, the service function may include activities such as sales, advertising, sales
promotion, customer service, etc.

This set up is very simple in administration, but becomes less effective from the marketing point of view, when products
and markets grow. Clear cut responsibility for any product or marketing is absent. This will lead to such a situation that those
products which are not favourable with the specialist may get discarded. There can be many such type of bottlenecks in the
proper coordination and fallow up of activities of each functionaries.

(2) Geographical organisation:

Under this method, a problem market is divided into national regions states, districts and local/village level markets,
under each person. : Number of persons to be supervised and controlled increases as the number of unit` increases.
Besides these units in-charge persons may also need the advice of specialists’ far administration, marketing research
advertisements etc.

If the size of the unit is very small, it may become uneconomical terms of marketing activity and its cost. It may
also become difficult communicate with those at distant locations. If the coverage of territory very big, then there may
be two tier or three tier field, organisations The managers of such territories are known as depot managers, area
managers, regional managers, divisional managers, etc.

(3) Product management organisation:

Companies producing a variety of products and/or brands often set up product or brand management
organizations. The product managers may be assigned for each product or for a group of products. Normally
consumer product managers spend more time with the advertisers and sale promotion, whereas the industrial
product managers spend more time: product design and improvements to meet the consumer needs.
This organization helps in preparing proper marketing mix for each product and also in taking immediate action
for any problem. Under this all products get importance and a competitive atmosphere is created within the
company amongst different products. The young executives get direct market feed back experience of each product
and its product life.
At the same time the product managers become expert only one product and for other work they have to depend
on other departments which r becomes difficult without proper authority.
It may also become uneconomical to have separate organisational set up for minor products. Usually such
marketing persons handling only one product often change their jobs for higher responsibilities, creating problem in
the marketing operations. In order to overcome some of these problems grouping of products under one marketing
organisation is usually done.

(4) Market management organization:

Like product management organization, the market management organization also concentrates on a particular
market. When the customers are of different user groups are of buying preferences a market management
organization is created to look after each such segment. For each market or segment a separate man is appointed.
This is followed by general insurance companies to same extent. Here the market is given importance.

4 Marketing Organisation Set-up

 (5) Product-Market organisation:
When there are many products and several different types of markets then a combination of both products and market
management organization is considered. Under this, there may he one product manager and several market managers. The
product manager looks after the requirements of market managers in the case of a particular product.

(6) Divisional organisation:

When the companies grow with many product lines and also in size, they often resort to grouping of products into
separate divisions. Each division may have its own separate departments for each activity in a sugar factory; there may be
separate divisions for sugar, distillery and paper products.

In the hospitality business organisation, range from the sole trader to the multinational corporation. No one organisational
structure of the marketing function is appropriate for all. The marketing organisation can be defined as the relationship of
functions and authority arranged to accomplish efficiently marketing objectives. As originally remarked by Chandler.
structure follows strategy. The right structure facilitate• the achievement of objectives. Accordingly organisational structures
should change as objectives and strategy change. Unfortunately, in many cases, strategy is imprisoned by structure.

The hospitality industry with some major exceptions such as MacDonalds is --_noted for its marketing orientation.
Consequently responsibility for the various components of strategy are spread wide or may not be recognised at all It has
been noted that:
Depending on the size and structure of the organization, the marketing manager may be dependent on a half-dozen or more
executives. Reservation, reception and registration are traditionally the responsibility of the front office. Baggage, exhibits,
freight and elevator service depend on the service chief. The steward must be relied on to buy. the chef to prepare and the
banquet department to serve. The problems of credit, spotlights and microphones, housekeeping and public safety bring still
others onto the scene. Without line authority, the marketing manager finds it difficult organizationally to demand performance
at the time, place and manner he has promised.

Where identifiable marketing organisations exist, they fall into 5 major categories being arranged around:
1. Functions.
2. Products.
3. Customers/markets.
4. Geographic areas.
5. A mixture of the above.
In a functional marketing organisation the sales or marketing Dir./ president has reporting to him specialists who have
responsibility : promotions and marketing research. One such plan suggests manager should be of the same status as the
operations manager :
In larger, multiproduct companies marketing

FUNCTIONAL - In a functional marketing organisation the sales or marketing Dir./ president has reporting to him
specialists who have responsibility : promotions and marketing research. One such plan suggests manager should be of the
same status as the operations manager:

PRODUCTS - In larger, multiproduct companies marketing products, with a product or brand manager taking
responsibility for the sales of one or more The banqueting manager and Conference manager are product managers.
Companies serving several identifiable Customer groups sometimes organise around markets using the title market manager.
The travel trade sales manager is a market manager.

MARKETS/CUSTOMERS - International hotel companies generally have 3 tiers of marketing organisation-i.e. the head
office region and unit. Corporate marketing executives at head office coordinate marketing planning, develop and buy
advertising, and offer public relations and promotional assistance to unit managers. Marriott Hotels, for example, runs
product planning, market development and marketing services from its Washington, DC, head office. Regional sales offices
prospect for new business and liaise with incentive travel planners and travel agents. Sales directors of individual hotels
follow up sales leads from the regional offices and are responsible for developing local trade. Organisations of this
international kind are both functionally and geographically structured.

Organization is the backbone of management. Without proper organization, no management worth its salt can perform its
functions smoothly. A right organizational structure is necessary for performing all activities competently. Similarly,
marketing organization is also required to perform all functions of the Marketing Department. The structure of marketing
organization is also required to perform all functions of the Marketing Department. The structure of marketing organization
can be studied at various levels, so an organization structure should be developed and customers be given the maximum level
of satisfaction. The following types of organization structure are functionally effective:

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Geographical Organization Structure - The organizations, which are operating in a vast area, can design organization
structure on geographical basis.

Board of Directors
I
Managing Director
I
Director (Marketing)

I I I ! !
Product Product Product Product Marketing
Manager Manager Manager Manager Research
(North) (South) (West) (East) Manager
I
Sales Executive
I
Sales Supervisor ,
I
Sales Representative

Product Manager (South)

I

I I I
Asstt Product Managcr (APM) APM APM

(Tamilnadu) (A P) (Karnataka)
I I
I District Sales Officers District Sales Officers
District Sales Officers
I
Advt.Manager

Relations with other\ departments:

Under the discussion on development of marketing, we have seen' that the whole organization's philosophy is aimed at
marketing and the marketing department alone cannot achieve the marketing objectives of the organisation the marketing
manager has two important tasks. They are:
(1) to coordinate and manage the work of his department and
(2) to coordinate the activities of his department with that of the functions of other department, such as finance
production, personal etc. Here the marketing manager has to exhibit his ability as a leader and also his skill in
persuasion. His authority may not be of great help in these efforts.
Suppose, the marketing manager wants to increase the market share of a particular product la order to gear up his
activities, he will need the finance form the finance department for additional manpower he will need the assistance from
the persona; department for additional promotion activities he will need the support of advertising, public relations and
other professional staff. Thus a marketing manager has to work with all sections/ department in the company. Every
department has their own priorities and plans, and therefore the marketing manager has to coordinate and persuade other
to achieve his goals.

Marketing Implementation:
According to Philip Kotler "Marketing implementation is the process that turns marketing plans into action and ensures
that such action is executed in a manner that accomplishes the plan's objectives." the strategy will give us an idea of our
marketing plans and marketing implementation will make u:; work out details about who would be responsible for what,
where, when and how.
In short this will need minute details of each stages of operation. In order to do this, the marketing manager will need
implementation skills for:

(1) allocating resources, such as time, manpower and finance available in an optimum manner
(2) organising, i.e. specifying the structure of relationship between different functionaries, line and staff members and others
in the deapartment,

4 Marketing Organisation Set-up

(3) Interacting skill in getting things done by influencing and persuading others and finally
(4) Monitoring the manager should develop such a system which would give proper feed back and ensure proper control of
the, implementation.
The overall effectiveness or result of the marketing plan will depend on the ability of the manager in its implementation.
The organizing, as we have seen above, should in addition to establishing relationships between different functionaries,
should ensure proper span of control, clear job specification and effective coordination of all marketing activities at all
levels and at all places / regions / divisions / markets.

4 Marketing Organisation Set-up