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(a) Functional Marketing Structure The organisational chart below shows the functional marketing organisation of a medium-sized company.

Under this structure, personnel are grouped by functional specialism and their activities are coordinated by the Marketing Director (or manager). The system benefits from clearly designated areas of responsibility. On the other hand, it has a rather restricted outlook with each department tending to plough its own furrow. Problems can arise if the organisation grows into a top-heavy hierarchy of specialists, with strictly functional interests.

(b) Regional Marketing Structure Most organisations will be structured at least in part on a regional or geographical basis. This is particularly true of sales forces operating nationally, where the national sales managers supervise regional managers, each of whom may supervise several area managers or field sales people. The structure is typical in the case of multiproduct companies, or companies with large exporting operations. (c) Product Marketing Structure Companies that have broadly differentiated product lines frequently organise their marketing activities on a product or product group basis. The organisation as depicted in Figure 1.5 is only viable where each product/product group generates sufficient sales revenue to offset inevitable duplications of effort. Not surprisingly it was first adopted by the large multinational FMCG (fast moving consumer goods) companies, but has later spread to other sectors including industrial manufacturing and financial services.

When a product group structure is used it is normal to appoint product or brand managers with specific responsibility for the performance of a product in a market. The term "product manager" is usually used in industrial marketing and "brand manager" in consumer marketing. Essentially, the duties of the product or brand manager are to coordinate all activities associated with the marketing of a given product or brand. The product manager prepares a marketing plan for his product and defines the sales volume, market share and profit objectives. Forecasts and budgets are prepared and the resources required for advertising, sales promotion and sales force efforts determined. In addition, the product manager will make recommendations and changes to the offer in terms of product modifications, pricing, and distribution or in terms of deleting or adding new products. Product managers must compete with other product managers for the company's resources. Although they work to guidelines set by top management, who impose ceilings on their expenditure, they have a right of appeal based on the worthiness of their marketing plans and the objectives they seek to achieve. Once the plans are agreed the product manager is responsible for implementing and coordinating all activities. He must liaise with other functional specialists as well as outside agencies in delivering the bottom-line sales and profits included in the plan. As these are the same skills required of top managers, often the product manager's position acts as the proving ground for senior management appointments. The great advantage of the production management structure is that it guarantees a focus and specialisation of management at the product/brand level, so that all the major profit earners of the company get the benefit of a full-time champion dedicated to their well-being. The potential drawbacks to this structure relate to the product

manager having too much responsibility and not enough authority. Problems invariably arise in terms of reporting relationships and decision-making authority, while the healthy rivalry between product managers may develop into unproductive competition and conflict. Customer-based Marketing Structure Market or customer-based structures and the product-based structure are quite similar. In a company like Unilever, which is producing a group of nearly identical products from the same manufacturing facility, all of which are to be sold through the same distribution outlets, the product manager system ensures that the individual brand is given the individual attention it deserves. However, where a company is selling one product or line of products that appeals to different segments of the market, the market or customer approach may make more organisational sense, since it puts appropriate focus on each of the marketing opportunities. The following organisation chart illustrates a customer-based structure for a hypothetical manufacturer of crockery ware.

You could argue that this structure represents the closest means of implementing the marketing concept, for it is implicit that customer requirements will take precedence over all other activities. It is recognition that customers often have needs for a series of related products which may be usefully combined with a company's product offer. For example, IBM do not just sell computers they sell computer systems and software tailor-made to end-user specific requirements. Emphasis only on the product could well result in the employment of salespeople specialising in certain products and missing out on such opportunities. If we were to generalise, then, where a company's product has mass appeal across industry or user categories, then the responsibility for marketing should be vested in product managers. However, where there are marked differences in the needs or buying habits of separate customer groups, then these should be regarded as separate markets and market managers appointed.

(e) Product/Customer Structure Where companies have many products being distributed into many markets they could choose to use either a product or customer-based structure. In an effort to resolve this dilemma, a composite to the two structures has been formed. The textile company Du Pont have chosen a composite-style organisation in employing separate managers for yarns, rayon, acetate, nylon and dacron, and separate market managers for its apparel such as men's wear, women's wear, home furnishings and the industrial market. The grid line structure as illustrated below operates across the dimensions. The product managers plan the sales and profits of their respective fibres and seek information or forecasts of fibre usage from the market manager. The market managers are only interested in meeting the needs of their customer markets rather than pushing a particular fibre and, in preparing their market plans, seek information from the product manager on prices and availability of different fibres. This structure appears to be suited to large, multi-product organisations in terms of greater coordination of activities and faster decision making. Against this is the fact that the system is costly and can lead to interdepartmental conflict.

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