Growing complexity of marketing organizations

Marketing organizations have been growing in complexity over the years. When marketing was just an appendage to production, there was no elaborate marketing organization in any enterprise. A skeleton marketing section, by whatever name it was called functioning as a part of the manufacturing outfit was all that was needed. As marketing changed from a job of disposal to one of distribution, the physical distribution functions and the channel functions assumed importance, and the marketing organization grew in that direction. In the era of competition, scoring over competition became the main task of the enterprise and the marketing organization had to cope with this requirements. Personal selling, advertising and sales promotion became important functions. Marketing intelligence and research functions too became important; pricing decisions also became more crucial. With these developments, the Marketing function had to be organized into a full fledged department, distinct from the manufacturing part of the business. Separate departments for service, customer relations, dealer development, sales promotion, brand management, marketing information service and credit control had to be created. Today, most business firms have organized their marketing organization into full-fledged divisions vast and self contained with their own departments for the various functions like personnel, training, accounts, legal advice, systems development, etc. Bigger firms dealing in a large variety of products/services over large territories have several marketing divisions.

Alternative Patterns of Marketing Organization:

Broadly speaking, the marketing organization of a business can be structured in one of the following patterns:

1. Simple ‘line and staff’ organization.
2. Product-oriented organization
3. Territory-oriented organization
4. Organization with a complex structure.

Line and Staff Organization:

In most business firms, especially medium sized ones, the marketing job is structured around a few line functions and a few staff functions. In a line and staff type of organization, each of the major staff functions is organized into a separate department and the line function is entrusted to the sales department. The required coordination between the line and staff functions is entrusted with an executive at a sufficiently high level.

Product based Organization:

Large business firms dealing with a multitude of products often find the simple line and staff type of marketing organization inadequate to meet their needs. These firms usually appoint individual managers to take care of each product or brand. They may be designated as brand managers or product managers. Wherever a single product does not justify the establishment of a separate product manger, the products are suitably grouped and product group managers appointed for managing each group of related products. By creating a product structured marketing organization; the firm may not eliminate the line and staff departments. The product based departments add a further dimension to the line and staff marketing organization structure. The product managers are primarily responsible for the welfare of the product or brand entrusted to them. They have to ensure the acceptance and standing of the brands in the market, and their growth and welfare. They have overall responsibility for the product policy, product strategy and detailed product plan in respect of the products/brands entrusted to them. They coordinate the advertising, distribution, merchandising and sales promotion in respect of these products.

Territory oriented Organization:

In a territory marketing organization, the responsibility for marketing the various products rests almost entirely with the line executives. The staff departments continue to function but the brunt of the marketing job is borne by the line managers in charge of territorial units. Depending on the extent of the marketing territory and the intensity of market coverage, a two-tier, or three tiers, or four tier field organization is created. The territory managers are given varying nomenclatures depot managers, district managers, area managers, regional managers, zonal managers and divisional managers.

Complex Organization:

There are some business firms that incorporate in their marketing organizations a combination of line staff organization, a product structured outfit and an extensive territory based organization. Usually, such firms are multi-product, multi market firms. At the head office level, they have a number of staff department to take care of each of the specialized functions of marketing. In addition, they have a number of product managers. Again, they have in their head office, managers who control the line organization. In the field outfit also, these firms have both line and staff managers to take care of the selling and staff functions, respectively in the specified territories.