Marketing Organization |
Marketing Organization
Thus category managers act as small
businesses, with complete responsibility for the performance of the category and
with a full complement of people to help them plan and implement category
marketing strategies. For companies that sell one product line to many
different types of markets that have different needs and preferences, a market
management organization might be best. Many companies are organized along market
lines. A market management organization is similar to a product management
organization. Market managers are responsible for developing long-range and
annual plans for the sales and profits in their markets. This system's main
advantage is that the company is organized around the needs of specific
customer segments. JFK Gibbs, Unilever's personal care products division, has
scrapped both brand manager and wales development roles. It had many strong
brands, including Pears, Faberge Brut, Signal, and Timotei, but sought to
improve its service to retailers and pay more attention to developing the
brands. To do this it created two new roles: brand development managers and
customer development managers. (Customer development managers work closely with
customers and have also taken over many of the old responsibilities of brand
management. This provides an opportunity for better coordination of sales,
operations, and marketing campaigns. The change leaves brand development
managers with more time to spend on the strategic development of brands and
innovation. They have the authority to pull together technical and managerial
resources to see projects through to their completion. Elida Gibbs'
reorganization goes beyond sales and marketing. Cross-functional teamwork is
central to the approach and this extends to the shop floor. The company is
already benefiting from the change. Customer development managers have
increased the number of correctly completed orders from 72 percent to 90 percent. In addition, brand development managers developed Aqua tonic - an aerosol
deodorant - in six months, less than half the usual time
Marketing Control
Because many surprises occur during the implementation of marketing plans, the marketing department must engage in constant marketing control. Marketing control is the process of measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure the achievement of marketing objectives. It involves the four steps shown in Figure 3.8. Management first sets specific marketing goals. It then measures its performance in the marketplace and evaluates the causes of any differences between expected and actual performance. Finally, management takes corrective action to close the gaps between its goals and its performance. This may require changing the action programs or even changing the goals. Operating control involves checking ongoing performance against the annual plan and taking corrective action when necessary. Its purpose is to ensure that the company achieves the sales, profits, and other goals set out in its annual plan. It also involves determining the profitability of different products, territories, markets, and channels. Strategic control involves looking at whether the company's basic strategies match its opportunities and strengths. Marketing strategies and programs can quickly become outdated and each company should periodically reassess its overall approach to the marketplace. Besides providing the background for marketing planning, a marketing audit can also be a positive tool for strategic control. Sometimes it is conducted by an objective and experienced outside party who is independent of the marketing department. Table 3.2 shows the kind of questions the marketing auditor might ask. The findings may come as a surprise - and sometimes as a shock - to management. Management then decides which actions make sense and how and when to implement them.
Implementing Marketing Many managers think that 'doing things right' (implementation) is as important, or even more important than 'doing the right things'(strategy): A -a surprisingly large number of very successful large companies don't have long-term strategic plans with an obsessive preoccupation on rivalry. They concentrate on operating details and doing things well. Hustle is their style and their strategy. They move fast and they get it right ... Countless companies in all industries, young or old, mature or booming, are finally learning the limits of strategy and concentrating on tactics and execution.19 Implementation is difficult - it is easier to think up good marketing strategies than it is to carry them out. People at all levels of the marketing system must work together to implement marketing plans and strategies. Marketing implementation requires day-to-day decisions and actions by thousands of people both inside and outside the organization. Marketing managers make decisions about target segments, branding, packaging, pricing, promoting, and distributing. They work with people elsewhere in the company to get support for their products and programs. They talk to engineering about product design, manufacturing about production and inventory levels, and finance about funding and cash flows. They also work with outside people. They meet with advertising agencies to plan ad campaigns and with the media to obtain publicity support. The salesforce urges retailers to advertise, say, Nestle products, provide ample shelf space, and use company displays. Successful implementation depends on several key elements. First, it requires an action program that pulls all the people and activities together. The action program shows what must be done, who will do it, and how decisions and actions will be coordinated. Second, the company's formal organizational structure plays an important role in implementing marketing strategy. In their study of successful companies, Peters and Waterman found that these firms tended to have simple, flexible structures that allowed them to adapt quickly to changing conditions. Their structures also tended to be more informal - HewlettPackard's MRWA (management by walking around), 3M's 'clubs' to create small group interaction, and Nokia's youthful, egalitarian culture.21 However, the structures used by these companies may not be right for other types of firms, and many of the study's excellent companies have had to change their structures as their strategies and situations have changed. For example, the same informal structure that made Hewlett-Packard so successful caused problems later. The company has since moved towards a more formal structure (see Marketing Highlight 3.4). Another factor affecting successful implementation is the company's decision-and-reward systems - formal and informal operating procedures that guide planning, budgeting, compensation, and other activities. For example, if a company compensates managers for short-run results, they will have little incentive to work toward long-run objectives. Companies recognizing this are broadening their incentive systems to include more than sales volume. For instance, Xerox's rewards include customer satisfaction and Ferrero's freshness of its chocolates in stores. Effective implementation also requires careful planning. At all levels, the company must fill its structure and systems with people who have the necessary skills, motivation, and personal characteristics. In recent years.
Summary
Strategic planning involves developing a strategy for long-run survival and growth. Marketing helps in strategic planning, and the overall strategic plan defines marketing's role in the company. Not all companies use formal planning or use it well, yet formal planning offers several benefits. Companies develop three kinds of plans: annual plans, long-range plans, and strategic plans. Strategic planning sets the stage for the rest of company planning. The strategic planning process consists of developing the company's mission, understanding a company's strengths and weaknesses, its environment, business portfolio, objectives and goals, and functional plans. Developing a sound mission statement \s a challenging undertaking. The mission statement should be market-oriented, feasible, motivating, and specific if it is to direct the firm to its best opportunities. Companies have plans at many levels: global, regional, national, and so forth. The higher-level plans contain objectives and strategies that become part of subordinate plans. These strategic imperatives are objectives or defined practices. At each level, a strategic audit reviews the company and its environment.
A SWOT analysis summarizes the main elements of this audit into a statement of the company's strengths and weaknesses and the chief threats and opportunities that exist. From here, strategic planning calls for analyzing the company's business portfolio and deciding which businesses should receive more or fewer resources. The company might use a formal portfolio-planning method like the BCG growth-share matrix or the General Electric grid. However, most companies are now designing more customized portfolio-planning approaches that better suit their unique situations. This analysis and mission lead to strategic objectives and goals. Management must decide how to achieve growth and profits objectives. The product/market expansion grid shows four avenues for market growth: market penetration, market development, product development, and diversification. Once strategic objectives and strategies are defined, management must prepare a set of functional plans that coordinate the activities of the marketing, finance, manufacturing, and other departments. Each of the company's junctional departments provides inputs for strategic planning. Each department has a different idea about which objectives and activities are most important. The marketing department stresses the consumer's point of view. Marketing managers must understand the point of view of the company's other functions and work with other functional managers to develop a system of plans that will best accomplish the firm's overall strategic objectives. To fulfill their role in the organization, marketers engage in the marketing process. Consumers are at the center of the marketing process. The company divides the total market into smaller segments and selects the segments it can best serve. It then designs its marketing mix in order to differentiate its marketing offer and to position this offer in selected target segments. To find the best mix and put it into action, the company engages in marketing analysis, marketing planning, marketing implementation, and marketing control. Each business must prepare marketing plans for its products, brands, and markets. The main components of a marketing plan are the executive summary, current marketing situation, threats and opportunities, objectives and issues, marketing strategies, action programs, budgets, and controls. Planning good strategies is often easier than carrying them out. To be successful, companies must implement the strategies effectively. Implementation is the process that turns marketing strategies into marketing actions.
The process consists of five key elements:
1. The action program identifies crucial tasks and decisions needed to implement the marketing plan, assigns them to specific people, and establishes a timetable.
2. The organization structure defines tasks and assignments and coordinates the efforts of the company's people and units.
3. The company's decision-and-reward systems guides activities such as planning, information, budgeting, training, control, and personnel evaluation and rewards. Well-designed action programs, organization structures, and decision-and-reward systems can encourage good implementation.
4. Successful implementation also requires careful human resources planning. The company must recruit, allocate, develop, and maintain good people.
5. The firm's company
culture can also make or break an implementation. Company culture guides people in
the company; good implementation relies on strong, clearly defined cultures
that fit the chosen strategy. Most of the responsibility for implementation
goes to the company's marketing department. Modern marketing activities occur
in a number of ways. The most common form is the functional marketing
organization, in which marketing functions are directed by separate managers
who report to the marketing director. The company might also use a geographic
organization, in which its sales force or other functions specialize by
geographic area. The company may also use the product management organization,
in which products are assigned to product managers who work with functional
specialists to develop and achieve their plans. Another form is the market
management organization, in which main markets are set to market managers
who work with functional specialists. Marketing organizations carry out
marketing control. Operating control involves monitoring results to secure the
achievement of annual sales and profit goals. It also calls for determining the
profitability of the firm's products, territories, market segments, and
channels. Strategic control makes sure that the company's marketing objectives,
strategies, and systems fit with the current and forecast marketing environment.
It uses the marketing audit to determine marketing opportunities and problems and to recommend short-run and long-run actions to improve overall marketing
performance. The company uses these resources to watch and adapt to the
marketing environment.
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