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Term Paper on Marketing Organizations
Term Paper Contents:
- Term Paper on the Meaning and Definitions Marketing Organizations
- Term Paper on the Components of an Organization
- Term Paper on the Principles of Marketing Organization
- Term Paper on the Evolution of Marketing Organization
- Term Paper on the Factors Affecting Marketing Organization Structure
- Term Paper on the Types of Marketing Organization Structure
Term Paper # 1. Meaning and Definitions Marketing Organizations:
Marketing organization is the combination of two words-Marketing and Organization. So to understand the meaning of the term ‘Marketing Organization’, it is necessary that the separate meaning of these two words should be understood.
In the words of American Marketing Association, marketing may be defined as, “The performance of business activities that direct the flow of goods and services from producer to the consumer or user”.
William J. Stanton, “Marketing is a total system of interacting business activities designed to plan, price, promote, and distribute want-satisfying products and services to present and potential customers”.
On the basis of above definitions it is well to conclude that marketing is the entire process of satisfying the needs and wants of customers. It is the creation and delivery of a standard of living to the society. It includes all the activities starting from the search of consumer’s needs and satisfaction till their satisfaction.
Lyndall F. Urwirch defines organization as, “Organization is to determine the achieved activities to accomplished a job and arrange the distribution of activities among the people”.
In the words of R.C. Davis, “An organization may be defined as any group of individuals, large or small, that is co-operating under the direction of executive leadership in the accomplishment of certain common objectives”.
According to Cundiff, Still and Govani, “Marketing Organization provides the vehicle for marketing decisions on products, marketing channels, physical distribution, promotion and prices”.
We can define organization as a group of people who interact with each other with in a deliberately set up and working in an interdependent way to achieve some common objectives. We can conclude that marketing organization is an organizational structure which implements the policies of the enterprise. Under organizational structure various departments are established in the firm, according to the requirements of marketing activities. These departments may be Sales Department, Advertisement Department, and Distribution and Customer Care Department etc.
Term Paper # 2. Components of an Organization:
The basic components of an organization are as follows:
i. Structure:
The coordination of marketing activities requires a structure wherein various individual are having different functions and responsibilities. This structure provides power and authorities which coordinates and control concern efforts of the organization.
ii. Process:
If the members of the organization are to pool their efforts effectively, there must be proper division of the major activities into well-defined jobs. An organization is a process of managerial function. It aims at organization work, managing people and system, efficient flow of marketing communication etc.
iii. Authority and Responsibilities:
An organizational relationship becomes effective with the delegation of authority and extraction of responsibility. An organization structure consists of various positions arranged in hierarchy.
iv. Relationship:
An organization is a group of people with their defined relationship on the basis of various criteria like products, functions, market area, process etc. The relationship is developed in such a way that there is always a scope of adaptability according to environmental change.
v. Group Behaviour:
An organization is a group of people having a common set of culture and behaviour. Group behaviour affects the working culture and employee customer relationship.
Term Paper # 3. Principles of Marketing Organization:
For the success of marketing organization it is essential to follow principles of marketing organization while structuring the organization structure, so that it can contribute towards achievement of pre-defined goals and objectives. The success of firm depends on its marketing organization. So the marketing organization should be based upon certain principles.
These principles are following:
(i) Principle of Objective:
According to this principle the objectives of marketing organization should be similar to the objectives of business firm. There should be proper coordination of organizational goals and marketing goals.
(ii) Principle of Authority:
As per this principle the authority of all the employees working in the marketing organization should be properly defined and it must be in accordance with the duties assigned to them.
(iii) Principal of Specialization:
Marketing originations structure should base on specialization in various fields of marketing like marketing research, product development, marketing finance, advertising etc.
(iv) Principal of Responsibility:
The marketing organization of the enterprise must be determined in the manner that it may specially define and determine the responsibilities of all the employees.
(v) Principal of Span of Control:
According to this principle, the span of control of all departmental heads should be properly defined and it must be limited as well, so that they can handle their respective teams properly.
(vi) Principle of Co-Ordination:
All the departments of enterprise and all the activities of an enterprise must be mutually co-ordinated. Marketing department should co-ordinate with all other departments of organization.
(vii) Assignment of Work:
The assignment of work among various employees must be specific. Each employee must know what he has to do.
(viii) Unity of Command:
As per this principle, each employee should get orders and instructions from one particular executive only so that he may follow the instructions without any confusion.
(ix) Unity of Direction:
According to this principle, the plans of the enterprise must be very clear and all the activities of all the departments of the enterprise must be carried in accordance with these plans.
(x) Principle of Flexibility:
According to this principle, the marketing organization should not be rigid, rather it must be flexible so that it can adjust according to changed situations and circumstances.
(xi) Scalar Principle:
As per scalar principle the marketing structure should define that which employee will work under the supervision of which executive and which executive will supervise which team of subordinates.
(xii) Principle of Continuity:
As the business is started for a longer period of time, similarly the marketing organization must be set up for a longer period.
(xiii) Principle of Leadership:
The marketing organization of the enterprise must provide for effective leadership of the activities of the enterprise so that all the employees of enterprise may contribute in achieving the predetermined objectives under the leadership.
Common success criteria for organizational structures are:
i. Compatibility:
The process of marketing organizations structure must be compatible with its objectives. If the objective of design is a system capable of self-modification, of adapting to change, and of making the most use of the creative capacities of the individual, then a constructively participative organization is needed. A necessary condition for this to occur is that people are given the opportunity to participate in the design of the jobs they are to perform.
ii. Information Flow:
This principle states that information systems should be designed to provide information to the point where action on the basis of it will be needed. Properly directed, sophisticated information systems can supply a work team with exactly the right type and amount of feedback to enable them to learn to control the variances which occur within the scope of their spheres of responsibility and competence and to anticipate events which are likely to have a bearing on their performance.
iii. Support Congruence:
This principle states that the systems of social support should be designed so as to reinforce the behaviours which the organization structure is designed to elicit. For example, the organization is designed on the basis of group or team operation with team responsibility, a payment system incorporating individual members would be incongruent with these objectives.
iv. Design and Human Values:
This principle states that an objective of organizational design should be to provide a high quality of work. We recognize that quality is a subjective phenomenon and that not everyone wants to have responsibility, variety, involvement, growth, etc.
Other factors which contribute to the success for organizational structures are:
(i) Decentralized reporting
(ii) Flat hierarchy
(iii) High transient speed
(iv) High transparency
(v) Regular monitoring
(vi) Prompt response
(vii) Shared reliability
(viii) Matrix hierarchy
Term Paper # 4. Evolution of Marketing Organization:
i. The Manufacturing Era:
Up to the end of 1960s the main focus of marketing organization was manufacturing and profit generation by high sales volume. The firms thought that as long as they manufactured the products, the customer would always buy it as customers did not have any other option. Main functions of a firm were limited to manufacturing, finance, purchasing and selling. Marketing was primarily a distribution function, how to deliver products and service from manufacturer to consumer.
ii. The Sales Era:
In the beginning of 1970s, the marketing scenario start changing, now most of developed economies have started privatization of manufacturing and service sector. The decade of 1970s saw the emergence of educated middle class consumer. Radio and cinema commercials were very popular.
Firms now felt the need to restructure their organization. The marketing activists like new product development, expansion of distribution network advertisement and sales promotion were seen as important factors for high growth and profitability. Sales function was now made independent as its task as to generate sales through promotion. Marketing was still not given a prominent role and was headed by at the middle level managers.
iii. The Era of Technology and Price Competition:
In 1980s, the middle class consumer expanded. Demand for consumer and industrial good have increased. It was characterized by the technology push, people wanted to upgrade their standard of living. High disposable incomes, all of which helped in creating demand and competition in market.
Consumerism was now increasing. Marketing received better treatment and marketing research as well as product management emerged as important functions in marketing organizations. Salesmanship was at top level.
iv. The Information and Marketing Era:
The decade of 1990s was the information era. Due to introduction of Internet, Cable T.V, Satellite T.V network have changed the shape of marketing organization. Now consumers were well aware about international brand, quality and price of products and services. The government opened the doors of the Indian economy to foreign private investment and MNCs.
Business firms are also looking at options like an independent marketing company which will be more responsive to needs of customers and market. Now organizations are having a separate marketing department headed by top managers and sub departments headed by second level managers. There are separate managers for advertising, sales, product management, public relation, and customer sales and services.
Term Paper # 5. Factors Affecting Marketing Organization Structure:
Following are the factors that must be considered while designing marketing organization structure:
(i) Main objectives and Policies of enterprise
(ii) Size of enterprise
(iii) Geographical area of the enterprise
(iv) Organizational policy of the management
(v) Number or lines of product
(vi) Nature of customers
(vii) Organizational structure of similar firms within the same industry
(viii) Sales volume
(ix) Ability of marketing personnel
(x) Marketing strategies.
Term Paper # 6. Types of Marketing Organization Structure:
Marketing organization structure is the structure of organization which is prepared for the efficient and smooth performance of marketing activities so that the pre-determined objectives of the enterprise may be achieved. Depending upon the nature and need of marketing activities, business enterprises can adopt any type of organization structure.
The determination of particular marketing organization structure depends upon the number of products, nature of products, quantity of production, area of marketing, channels of distribution, types and nature of consumers and last but not the least the financial resources of organization.
Following may be the marketing organization structures:
1. Function-Oriented Marketing Organization:
It is the simple and efficient form of organizing marketing activities in functional form. Under this type of marketing organization structure the activities of the enterprise are divided on the basis of functions to be performed. All the activities of an enterprise are divided into four main departments namely, marketing, finance, production and personnel. Equal importance is given to each department, so there are less possibilities of conflict among departments.
Profits are considered on aggregate basis. Separate managers are appointed to manage the affairs of these departments. Then the departmental managers appoint different managers for different activities to be performed by that department, for example, the activities of marketing department of an enterprise may be sub-divided into activities like- Marketing research, Product Planning, Product Development, Advertisement, Sales Promotion, Physical distribution and Customer care etc. This form of organization ignores the possibilities of the market segments emerging as profit centers.
2. Product-Oriented Marketing Organization:
This type of marketing organization structure is more suitable when there is large number of products of different types and nature requiring different marketing strategies. Under this type of marketing organization, the departments of Marketing Research, Product Planning and Development, Advertisement and Sales Promotion, Physical Distribution etc. are established as central departments and separate managers are appointed for selling different types of products.
All the managers work under the supervision and control of marketing manager. This type of organization structure can be explained with the help of the fig. 13.2.
3. Market-Oriented Marketing Organization:
This type of marketing organization structure is suitable for the companies whose customer base is large enough and it is geographically scattered. Each division within a divisional structure contains all the necessary resources and functions within it. Divisions can be categorized from different points of view. There can be made a distinction on geographical basis or on product/service basis like products for different customers, households or companies.
The whole market is divided into several selling regions and separate managers are appointed for each region and the Regional Managers work under the supervision of Sales Manager. Each region is sub-divided under the supervision of sales supervisors.
The number of sales supervisors depends upon the nature and requirements of particular region. Each supervisor is given a number of sales executives, who work under his control to achieve the goal. All the sales supervisors of a region work under the control of Regional Manager of a particular region. In this way the whole market is divided into Sales Territories.
This type of organization structure can be explained with the help of following sketch:
4. Matrix Form of Marketing Organization:
In the matrix form, products are the profit centers and each product manager relates with each zonal sales manager. This helps in pushing each product across the country and also in evolving products strategies for different geographic areas. This form generates completion among product managers. The matrix structure groups employees by both function and product.
This structure can combine the best of both separate structures. A matrix organization frequently uses teams of employees to accomplish work, in order to take advantage of the strengths, as well as make up for the weaknesses, of functional and decentralized forms. It has drawback that it is difficult to reconcile objectives like profit across products, territories, division areas. It may dilute the principle of accountability in management hierarchy.
