Marketing Organization Structure

8/6/2019 Marketing Organization Structure

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Marketing organization andMarketing organization andcontrolcontrol


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Types of Marketing organizationTypes of Marketing organization

StructuresStructures Functional organizationFunctional organization

Geographic organizationGeographic organization

Product/Brand management organizationProduct/Brand management organization

Category management organizationCategory management organization

Market management organizationMarket management organization

Matrix organizationMatrix organization


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Marketing controlMarketing control

Marketing control is the process ofMarketing control is the process ofmeasuring and evaluating the results ofmeasuring and evaluating the results of

marketing strategies and plans and takingmarketing strategies and plans and takingcorrective actions to ensure thecorrective actions to ensure theachievement of marketing objectivesachievement of marketing objectives


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Marketing control process :Marketing control process :

Establishing performance standardsEstablishing performance standards

Appraising the performanceAppraising the performance

Correcting deviationCorrecting deviation

Reforming the planReforming the plan


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Types of Marketing ControlTypes of Marketing Control

Annual planAnnual plan

Profitability controlProfitability control

Efficiency controlEfficiency control

Strategic controlStrategic control

Marketing auditMarketing audit


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Annual plan :Annual plan :

Annual plan Annual plan control ensures the companyAnnual plan Annual plan control ensures the companyachieves the sales, profits and other goals established inachieves the sales, profits and other goals established inits annual plan. There are four steps in this process.its annual plan. There are four steps in this process.

What is happeningWhat is happening

Why is ithappeningWhy is ithappening What should we do about itWhat should we do about it what do we want to achievewhat do we want to achieve

Sales analysis :Sales analysis :

Sales analysis Sales analysis measures and evaluatesSales analysis Sales analysis measures and evaluatesactual sales in relationship to goals. Two specific toolsactual sales in relationship to goals. Two specific toolsmake it work.make it work.

Sales variance analysisSales variance analysis

Micro sales analysisMicro sales analysis


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Market share analysis :Market share analysis :

Market share analysis Company sales dont reveal how well theMarket share analysis Company sales dont reveal how well thecompany is performing relative to competitors. For this purpose,company is performing relative to competitors. For this purpose,management needs to track its market share in one of three ways.management needs to track its market share in one of three ways.

Overall market shareOverall market share Served market shareServed market share Relative market shareRelative market share

overall market share = customer penetration * customeroverall market share = customer penetration * customerloyalty*customer selectivity*price selectivityloyalty*customer selectivity*price selectivity


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Marketing expense toMarketing expense to--salesale--analysis :analysis :

Marketing expense toMarketing expense to--salesale--analysis Annual plananalysis Annual plancontrol requires making sure the company is notcontrol requires making sure the company is notoverspending to achieve sales goals. The keyoverspending to achieve sales goals. The key

ratio to watch is marketing expenseratio to watch is marketing expense--toto--sales. Insales. Ina company this ratio was 30% and consisted ofa company this ratio was 30% and consisted offive component expensefive component expense--toto--sale ratios: salessale ratios: salesforceforce--toto--sales(15%); advertisingsales(15%); advertising--toto--sale(5%);sale(5%);

sales promotionsales promotion--toto--sale(6%); marketingsale(6%); marketingresearchresearch--toto--sale(1%); and sales advertisementsale(1%); and sales advertisement--toto--sale(3%).sale(3%).


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Financial analysis :Financial analysis :

Financial analysis Management uses financialFinancial analysis Management uses financialanalysis to identify factors that affect theanalysis to identify factors that affect thecompanys rate of return on net worth.companys rate of return on net worth.

To improve its return on net worth, the companyTo improve its return on net worth, the companymust increase its ratio of netprofits to assets, ormust increase its ratio of netprofits to assets, orincrease the ratio of assets to net worth.increase the ratio of assets to net worth.

The company should analysis the compositionThe company should analysis the compositionof its assets (cash, account receivable, inventoryof its assets (cash, account receivable, inventory

and plant & equipment) and see whether it canand plant & equipment) and see whether it canimprove its assets management.improve its assets management.


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Profitability control :Profitability control :

Companies can benefit from deeper financialCompanies can benefit from deeper financialanalysis and should measure the profitability ofanalysis and should measure the profitability of

their products, territories, customer groups,their products, territories, customer groups,segments, trade channels, and order size. Thissegments, trade channels, and order size. Thisinformation can help management determineinformation can help management determinewhether to expend, reduce or eliminate anywhether to expend, reduce or eliminate any

products or marketing activities.products or marketing activities.


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Process of profitability controlProcess of profitability control

analysisanalysis Identifying functional expensesIdentifying functional expenses

Assigning functional expenses to marketingAssigning functional expenses to marketingentitiesentities

Preparing a profit and loss statement for eachPreparing a profit and loss statement for each

marketing entitiesmarketing entities


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Efficiency control :Efficiency control :

Efficiency control involves microEfficiency control involves micro--level analysis of the variouslevel analysis of the variouselements of the marketing mix, including sales force, advertising,elements of the marketing mix, including sales force, advertising,sales promotion, and distribution. For example, to understand itssales promotion, and distribution. For example, to understand itssalessales--force efficiency, a company may keep track ofhow many salesforce efficiency, a company may keep track ofhow many salescalls a representative makes each day, how long each call lasts, andcalls a representative makes each day, how long each call lasts, andhow much each call costs and generates in revenue.how much each call costs and generates in revenue.

For example assessing channel efficiency, management needs toFor example assessing channel efficiency, management needs tosearch for distribution economies in inventory control, warehousesearch for distribution economies in inventory control, warehouselocation and transportation mode. It should track such measures as:location and transportation mode. It should track such measures as:

Logistic cost as a percentage of salesLogistic cost as a percentage of sales Percentage of order filled correctlyPercentage of order filled correctly Percentage of onPercentage of on--time deliverytime delivery Number of billing errorsNumber of billing errors


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Customer penetrationCustomer penetration is the percentage of allis the percentage of allcustomers who buy from the company.customers who buy from the company.

Customer loyaltyCustomer loyalty is the purchases from the companyis the purchases from the company

by its customers expressed as a percentage of their totalby its customers expressed as a percentage of their totalpurchases from all suppliers of the same products.purchases from all suppliers of the same products.

Customer selectivityCustomer selectivity is the size of the averageis the size of the averagecustomer purchase from the company expressed as acustomer purchase from the company expressed as apercentage of the size of the average customer purchasepercentage of the size of the average customer purchase

from an average company.from an average company. Price selectivityPrice selectivity is the average price charged by theis the average price charged by the

company expressed as a percentage of the average pricecompany expressed as a percentage of the average pricecharged by all companies.charged by all companies.


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Strategic control :Strategic control :

Strategic control Each company shouldStrategic control Each company shouldperiodically reassess its strategic approachperiodically reassess its strategic approachto the marketplace with a good marketingto the marketplace with a good marketingaudit. Companies can also performaudit. Companies can also performmarketing excellence reviews andmarketing excellence reviews andethical/social responsibility reviews.ethical/social responsibility reviews.


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Marketing auditMarketing audit

Marketing audit Marketing audit is aMarketing audit Marketing audit is acomprehensive, systematic, independent andcomprehensive, systematic, independent andperiodic examination of a companys marketingperiodic examination of a companys marketing

environment, objectives, strategies andenvironment, objectives, strategies andactivities, with a view to determine problemactivities, with a view to determine problemareas and opportunities and recommending aareas and opportunities and recommending aplan of action to improve the companysplan of action to improve the companys

marketing performance.marketing performance.


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Features of marketing audit :Features of marketing audit :

ComprehensiveComprehensive

SystematicSystematic IndependentIndependent

PeriodicPeriodic


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Factors affecting Global MarketingFactors affecting Global Marketing

Documents

Marketing Organization Structure