Multimedia Marketing/Marketing.iso/market/chapter1.7p

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SECTION 1.7 Organizing for Marketing Management

INSTRUCTIONS Try to envision the best way to organize a marketing
             department.

EXAMPLE

Many companies in the U.S. and abroad are now using the team approach
to organizing. They do not want the marketing department to operate
independently from the production, engineering, finance, and other
departments because independent action leads to lack of coordination
and cooperation.

A large producer of industrial valves typifies this
trend. When a new product is being developed, the task is assigned
to a team, made up of members of the marketing, logistics, production,
and finance departments. The job of the team is to work together in
a coordinated fashion such that the new product is developed in
a reasonably short period of time and with the full cooperation of
all departments. This is contrary to the experience of companies
which operate with each department acting as a separate unit. Such
companies often experience inter-departmental infighting, bureaucratic
delays, and failure to develop products that meet the demands of the
company at large.

DETAILS
In a compemporary marketing department all marketing functions are
organized under one head-typically a vice-president of marketing.
Under this individual, the rest of the department can be organized
in several ways: according to the functional tasks to be performed,
around target markets, around products , or through teams.

The term "function" refers to a set of major related activities that
need to be performed, such as advertising or physical distribution.
Accordingly, the simplest and most common marketing structure is to
organize along the various marketing specialties. A common arrangement
is to have a sales manager , an advertising manager, a distribution
manager, and a product manager, each of whom supervise and coordinate
the personnel assigned to his or her respective unit. In turn, the
individual managers all report to the marketing vice president.

The idea behind functional departments is to group specialists
together. Under this arrangement, all of the people that are responsible
for advertising, for example, work together in one work unit. Some
of the personnel specialize in selecting media, others in creative
work, and still others in research. By combining their efforts, they
attempt to produce superior advertising. In turn, their work is
coordinated with other marketing departments by the marketing manager.
It is up to the latter to make sure that all the departments work
together.

Sales representatives can present a special problem. In many companies
they feel that they are the ones that are doing the real work--going
out and closing sales and bringing in revenues as a result. To them,
the work of other personnel may seem to be relatively trivial. The
marketing manager may face a major challenge in convincing the sales
force that they are members of a marketing team that must all work
together.

PROBLEM 1

A manufacturer of screen doors utilizes a functional  organization
plan for the marketing department. This means that the department
is organized by:

A. Major Types of customers.
B. Major product groups.
C. Major georgraphic areas.
D. Activities to be performed.

WORKED

A manufacturer of screen doors utilizes a functional organization
plan for the marketing department. This means that the department
is organized by activities to be performed.

Marketing departments that have a functional organization place
all personnel who are responsible for an activity within one division
of the department. A screen door manufacturer probably would find
sales to be very important, so a sales manager would head up the
sales division. If the firm engaged in substantial advertising, it
probably would have an advertising manager. Since the products are
relatively bulky and are sold to industrial users, intermediaries, and
consumers, distribution would be important and the company probably
would have a distribution manager.

ANSWER  D

INSTRUCTIONS Try to envision the best way to organize a marketing
             department.

EXAMPLE

Many companies in the U.S. and abroad are now using the team approach
to organizing. They do not want the marketing department to operate
independently from the production, engineering, finance, and other
departments because independent action leads to lack of coordination
and cooperation.

A large producer of industrial valves typifies this
trend. When a new product is being developed, the task is assigned
to a team, made up of members of the marketing, logistics, production,
and finance departments. The job of the team is to work together in
a coordinated fashion such that the new product is developed in
a reasonably short period of time and with the full cooperation of
all departments. This is contrary to the experience of companies
which operate with each department acting as a separate unit. Such
companies often experience inter-departmental infighting, bureaucratic
delays, and failure to develop products that meet the demands of the
company at large.

DETAILS

The functional type of organization is the traditional one--for
many years many firms utilized this pattern. Over the past two
decades, however, some companies have discovered that this structure
does not meet their needs. They have discovered that the functional
structure worked  for the firm for a while , but with the
passage of time this arrangement became outmoded.

Functional organizations are relatively uncomplicated. They work well
for small and medium size companies. They nurture the internal
development of experienced specialists and the organization is
structurally straightforward and simplified.

However, the members of each functional group may become myopic
and see themselves in competition with other groups for funds.
Also, adequate management of an extensive product mix can become
difficult because the specialists tend to concentrate their efforts
on high-volume key products , which may lead to neglect of new
products and new markets.

In many companies that are organized among functional lines, members
of each department come to see themselves as the "in group" and
others as "out groups". Sales personnel sometimes view marketing
research operativesd as "number crunchers"--staff personnel who do
not have a real feeling for what really happens in the marketplace.

Advertising people may view themselves as creatives who do not have
to lower themselves to mundane duties such as those performed by
the sales force. If the members of the same department are housed in
adjacent offices, have frequent formal and informal meetings, and
socialize with one another, the "in group" feelings are solidified.

PROBLEM 2
A manufacturer of newsprint is considering the use of a functional
organization plan for the marketing department. A possible
disadvantage for such structures is:

A. They do not work well for small companies.
B. They may lead to excessive competition among divisions.
C. They do not nurture the development of experienced specialists.
D. They are structurally complicated.

WORKED
A manufacturer of newsprint is considering the use of a functional
organization plan for the marketing department. A possible
disadvantage of such structures is that they may lead to
excessive competition among divisions. Each one may view the others
with suspicion and fail to cooperate with them. The divisions may
feel that they must fight for resources, such as employees and budgeted
funds and, as a consequence, attempt to maximize their own goals, at
the expense of other divisions and the well-being of the company.This
organization pattern is simply not designed to foster cooperation
and coordination.

ANSWER B

INSTRUCTIONS Try to envision the best way to organize a marketing
             department.

EXAMPLE

Many companies in the U.S. and abroad are now using the team approach
to organizing. They do not want the marketing department to operate
independently from the production, engineering, finance, and other
departments because independent action leads to lack of coordination
and cooperation.

A large producer of industrial valves typifies this
trend. When a new product is being developed, the task is assigned
to a team, made up of members of the marketing, logistics, production,
and finance departments. The job of the team is to work together in
a coordinated fashion such that the new product is developed in
a reasonably short period of time and with the full cooperation of
all departments. This is contrary to the experience of companies
which operate with each department acting as a separate unit. Such
companies often experience inter-departmental infighting, bureaucratic
delays, and failure to develop products that meet the demands of the
company at large.

DETAILS

Market-structured organizations are set up around the markets
themselves. One division of a telephone equipment company, for
instance might serve nonprofit organizations such as universities ,
another division might serve manufacturers, another might serve
retailers, and so on. Some large producers have as many as 100
divisions. In this type of organization, employees specialize
by market, rather than by function. They become experts in satisfying
the needs of particular customers.

Market managers serve each division. They are responsibility centers
for specific markets. They are charged with developing plans and
strategies, implementing them, and of earning a profit. In short,
this pattern involves marketing personnel who  have the specific
responsibility for developing certain market segments. This makes
assessment of their achievements more effective. If the company is
not effective in penetrating particular segments, there is no
question as to who failed.

This structure has several advantages. It formalizes the process of
fine-tuning marketing activities for a particular market segment,
it makes someone directly responsible for keeping abreast of changing
conditions in a market, and it provides an excellent training ground
for personnel. These individuals are given a variety of responsibilities
in serving the assigned market segment and this promotes effective
training.

Yet there are disadvantages. There is a risk of creating considerable
internal conflict as the various market managers compete for internal
resources while lacking full authority to totally control activities
within their areas. A degree of inefficiency can develop, as efforts
are duplicated by the addition of more managers performing similar
tasks. This can be a special problem if the firm serves a large
number of markets and has a managerial and operating staff that is
charged with the responsibility for each one.

PROBLEM 3

Recently, a large producer of industrial maintenance supplies elected
to structure the marketing department by market. An advantage of this
is:

A. It makes some personnel responsible for staying current on
   changing conditions in a market.
B. There is little or no duplication of managers in the department.
C. This arrangement is not suitable for a large company.
D. This organization plan is complex and difficult for marketing
   personnel to understand.

WORKED

Recently, a large producer of industrial maintenance supplies elected
to structure the marketing department by market. An advantage is:
a market organization might work for this producer because it does
make some individuals responsible for changing conditions in a
market. This is not the case for functional organizations, where
personnel are responsible only for certain activities. The individuals
who work in a market organization become specialists in serving a
particular market. They develop specialized knowledge on that market
and follow its activities carefully, noting trends and new developments
and reacting to these trends. This is an important advantage.

ANSWER  A

INSTRUCTIONS Try to envision the best way to organize a marketing
             department.

EXAMPLE

Many companies in the U.S. and abroad are now using the team approach
to organizing. They do not want the marketing department to operate
independently from the production, engineering, finance, and other
departments because independent action leads to lack of coordination
and cooperation.

A large producer of industrial valves typifies this
trend. When a new product is being developed, the task is assigned
to a team, made up of members of the marketing, logistics, production,
and finance departments. The job of the team is to work together in
a coordinated fashion such that the new product is developed in
a reasonably short period of time and with the full cooperation of
all departments. This is contrary to the experience of companies
which operate with each department acting as a separate unit. Such
companies often experience inter-departmental infighting, bureaucratic
delays, and failure to develop products that meet the demands of the
company at large.

DETAILS
Some companies sell many different products to the same or similar
market segments, such as food processors, that market many processed
foods to consumers. A major management concern is to devote sufficient
attention to each of their products. It would be easy, for instance,
for the sales force to push fast- moving and well-established items
and to forget about slow-moving ones. To prevent this from happening,
many companies have found it advantageous to assign responsibility for
specific products to a particular manager by developing a product-
centered marketing organization. These are similar to market centered
organizations, except that the specialists are responsible for
products and not markets.

These organizations employ product managers (sometimes called brand
managers) to make all of the marketing decisions for a particular
product. These individuals are responsible for product development,
pricing, advertising, other promotion, channels of distribution, and
physical distribution for their assigned product or products.

The advantages and disadvantages of a product centered organization
practically parallel those of a market centered one. A distinct
advantage for some companies is that a product centered organization
fosters product champions--people devoted to mustering internal
support for a product, which helps develop each product to its full
potential. Another advantage is that it helps create intrapreneurship
among large organizations. This means that the large company has an
entrepreneurial spirit, one where individual effort is not stifled
by lengthy lists of rules and procedures. Consequently, products do
not get lost in the crowd amongst the red tape and lack enough
support to gain their potentials.

A disadvantage is that if top management allows product managers to
operate very independently, they may pursue goals contrary to
company objectives. Top management can overcome this, however, through
careful control measures, such as periodic meetings with product
managers to discuss goals and ways to meet them.

PROBLEM 4

A manufacturer of electronic equipment for chemical processors is
considering a product centered organization. A possible disadvantage
of this pattern is:

A. Product mangers tend to be inexperienced
B. Product managers neglect individual products.
C. Product managers may operate too independently.
D. Product managers have little opportunity to learn new skills.

WORKED
A manufacturer of electronic equipment for chemical processors is
considering a product centered organization for the company.
Under a product centered organization plan, product managers focus
their attention on only one or a few closely related products. They
sometimes develop the attitude that their product is all that counts,
and lose sight of overall company objectives, which relate to the
sum total of products and not just one. Hence, these managers may
have little incentive to cooperate with other managers. The results
can harm the overall corporate marketing effort.

ANSWER  C
INSTRUCTIONS Try to envision the best way to organize a marketing
             department.

EXAMPLE

Many companies in the U.S. and abroad are now using the team approach
to organizing. They do not want the marketing department to operate
independently from the production, engineering, finance, and other
departments because independent action leads to lack of coordination
and cooperation.

A large producer of industrial valves typifies this
trend. When a new product is being developed, the task is assigned
to a team, made up of members of the marketing, logistics, production,
and finance departments. The job of the team is to work together in
a coordinated fashion such that the new product is developed in
a reasonably short period of time and with the full cooperation of
all departments. This is contrary to the experience of companies
which operate with each department acting as a separate unit. Such
companies often experience inter-departmental infighting, bureaucratic
delays, and failure to develop products that meet the demands of the
company at large.

DETAILS
Some organizations have moved away from functional,market centered,
and product centered organizations and have developed a team approach.
Here, individuals from different departments, such as marketing,
production, engineering, and finance work together as a team for a
particular market or product. The team assignment may be permanent
or temporary.

This method has major advantages. Members of different departments
work together rather than at cross purposes. Bureaucracy and red
tape are minimized. Often the team can bring new products to market
faster than is possible under the other approaches. Different members
of the team are able to provide insights to other members that would
not otherwise be possible. The major disadvantage is that some
personnel would prefer working with others with the same specialty.

PROBLEM 5

A producer of pulpboard uses a team approach in the marketing
department, whereby personnel from different departments are
assigned to a new product. A possible advantage is:

A. Bureaucracy and red tape are minimized.
B. The team members are more specialized than is the case for
   a functional organization.
C. Fewer numbers of managers need to be hired by the company.
D. New product success will be more carefully studied by management.

WORKED
A producer of pulpboard uses a team approach in the marketing
department, whereby personnel from different departments are
assigned to a new product, rather than a function of the company.
A manufacturer of pulpboard probably would find that a team approach
to organizing the marketing department is advantageous because
bureaucracy and red tape are minimized. The team members work together
on a day-to-day basis, at the same setting. They can discuss issues
on a face-to-face basis, rather than having to go through the chains
of command. Often informal discussions will provide solutions to
problems. The team members will get to know each other over time
and learn how to work with other team members.

ANSWER  A