The Organization Of Marketing Department

We are going to explore in details the topic “The Organization Of Marketing Department”. But before we commence, let’s define the term “organization”.

What is an organization?

An organization is a formalized intentional structure of roles or positions. There are two types of organizations: formal and informal organization. According to Koontz et. Al (1976), an organization is formal when the activities of two or more persons were consciously coordinated towards a given objective. An organization structure is effective if it facilitates the contribution of individuals in the attainment of enterprise objectives, and this, was referred to as “principle of unity of objectives” by Urwick (1963).

There is also “the Principe of efficiency“ which states that an organization is efficient if it facilitates accomplishment of objectives by people with the minimum unsought consequences of costs.

An informal organization is one that exists outside the formal organization, but which management must recognize in reaching certain decisions. For example, the labor association of company XYZ is not listed in the formal organization structure, but it nevertheless, affects management decisions.

Marketing Organization

Marketing organization is the company’s structural arrangement used for directing and controlling the marketing functions. The establishment of such a structure outlines the authority responsibility and tasks to be performed. It also makes for the equitable assignment of functions to organization members as well as proper coordination. A marketing organization may be functional, product-oriented or market-oriented, or a combination of both.

i) Functional Marketing Organization 

The functional marketing organization is designed in such a way that responsibilities are assigned on the basis of buying, promotion, selling, distribution, and other activities. Advantages and Disadvantages of the Functional Organization Structure.

The advantages of the functional organization structure include:

1. It represent a logical reflection of functions
2. It follows the principle of occupational specialization.
3. It ensures the power and prestige of major functions.
4. It simplifies training
5. It makes for a tight control at the top.

The disadvantages are:

1. The responsibility for generating profits is at the top only
2. It makes for over-specialization and narrows the viewpoint of key personnel.
3. It limits the development of general managers.
4. It reduces coordination between the functions.
5. It makes the economic growth of the company as a system difficult.

ii)Product or Brand Organization

The grouping of activities on the basis of product or product lines is of great importance to multiline, large-scale enterprises. This type of organization permits top management to delegate authority concerning a given product(s) to a division executive. In return, management imposes a considerable degree of profit responsibility on each of these managers.

The product organization is designed in such a way that product managers are responsible for each product group while brand managers are responsible for individual brands. 

Advantages and Disadvantages

The advantages associated with product organization include:

1. It places attention and effort on product line.
2. It places responsibility for profit at the division level
3. It improves coordination of functional areas.
4. It provides measurable training grounds for general managers
5. It permits growth and diversity of products and services

The Disadvantages include the following:

1. It requires more persons with general manager abilities
2. It tends to make maintenance of economic central services difficult
3. It presents increased problems of tops management control

(iii)  Market-Oriented Organization

This type of organization is attractive to large-scale firms or other enterprises whose activities are physically or geographically spread. The underlying principle is that all activities in a given area or territory or market should be grouped and assigned to a manager. Under the market-oriented organization, managers are assigned on the basis of geographic markets and customer type in addition to the other functional categories.

Advantages and Disadvantages

Typical market-oriented organization has the following advantages:

1. Places responsibilities at a lower level
2. Furnishes measurable training grounds for general managers
3. Places emphasis on local markets and problems
4. Makes for better face-to-face communication with local interests

The Disadvantages include:

1. It requires more persons with general manager ability
2. It tends to make maintenance of economic central services difficult
3. It increases problems for top management control

It must be noted that a firm may decide to combine the structures in such a manner that will enable it realize its objectives.

Influence Of External Factors On Marketing Organization

These external factors can be grouped into three broad categories namely – Business Environment, Markets, and Customer Requirements.

(A) Business Environment: The environment influences the types of marketing objectives and strategies and consequently the type of organization that will seek to implement them. If the products are marketed to individual consumers, advertising and sales promotion will be emphasized, and the functional organization structure may be adopted. In the case of industrial products where the buyers are concentrated, the level of service is often more important. This may call for a combination of product and market-oriented structure. Managers who have adequate knowledge of the products will be assigned to designated markets to cater for the personal and service needs of the company customers.

Other environmental factors that may affect the organization structure include the rate of change within the industries, the nature and lengths of the channels of distribution, and the competitive structure of the industries.

(B) Markets: Markets are considered here in terms of size, scope, nature, and location. Markets covering a wide expanse of a geographical area will require market-oriented or territorial organization. This is necessary for effective covering and handing of complaints within the shortest possible time. a relatively few markets will facilitate the use of product or brand organization.

(C) Customer Requirements: Most large scale manufacturing and commercial firms are now conscious of costs, and make efforts at cost reductions. This has to a reasonable extent altered such firm’s buying practices. Such practices include:

a) Increasing the central control of the purchasing function.

b) Award of annual contracts and blanket orders

c) Pressures for special deals and services

d) Government purchases which may involve tenders and contractors

e) Customers’ increasing interest in having the sellers’ sales men deal with their problems.

All these requirements call for interactions between the company and the buyers. This can better be handled through the market-oriented organizational structure.

In our next publication, we will look in-depth at “Corporate And Divisional Responsibilities”. Meanwhile if you missed the post on Marketing System, Marketing, and Management Process, read it here.It will help you better understand the marketing and management process in an organization, and also prepare you for the next topic.

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