UNIVERSITY OF BENIN

DEPARTMENT OF BUSINESS ADMINISTRATION

COURSE OF STUDY: BUSINESS MANAGEMENT
(2020/2021)

DAUDU LUCKY OYAREBU

B1194456

COURSE: PRINCIPLE OF MARKETING (BUS: 703)

ASSIGNMENT

WRITE ESSAY ON THE VARIOUS TYPES OF MARKETING

ORGANISATION
 THE VARIOUS TYPES OF ORGANISATION STRUCTURE

INTRODUCTION

Marketing departments of companies and organizations are responsible for

market research, solution development, promotional campaigns and
customer relationship programs. While marketing departments engage in
several different activities, its primary role is to boost revenue for the
business.

Before it implements marketing strategies, a marketing department

develops a marketing plan. This plan sets out marketing objectives that align
with the company’s goal of building brands, attracting customers and
generating revenue. Market research strategies are typically included in the
plan. Market research is used to identify the needs and preferences of
targeted customers. Knowing what customers want or expect in certain
product or service categories improves a company’s ability to develop and
promote valuable solutions.

The solution development element of marketing is aimed at coordinating

with development and production departments to build or enhance
solutions to meet customer needs. Companies may upgrade existing
solutions or develop entirely new ones. Solutions that have unique features
that align with customer demands are ideal.
Advertising and promotion are key roles of marketing. Advertising is the paid
promotional component and uses up much of the department’s budget. A
company has control over advertising messages and placements. Public
relations, which includes free publicity, and personal selling are other
communications strategies managed by marketing departments

Marketing organization structures are a fundamental part of every business

because they clearly define operations and responsibilities for employees.
Choosing a marketing structure that is a good fit for your business can have
a positive impact on your team's ability to meet business goals. In this
article, we explore what a marketing organization structure is, why it is
essential for a business to use a marketing organization structure, what you
should consider while creating one and list seven of the most common
marketing organization structures.

WHAT IS MARKETING ORGANIZATION STRUCTURE?

Marketing organization structures distribute and oversee marketing

operations, procedures and strategies within a business. These structures
define and organize employee job roles, including who they report to, and
outline the processes a business can use to achieve success. An effective
marketing organization structure can support business objectives and give
employees a clear understanding of the objectives they are working to
achieve.

WHY SHOULD BUSINESS MARKETING ORGANIZATION STRUCTURE

Marketing organization structures help employees understand their role

within the company they work for. These structures can also act as a guide
for employees to know what resources are available to them and which
team members handle which responsibilities. Marketing organization
structures also can provide a visual workflow that explains how the business
operates, the job tasks within the business and how they contribute to its
success and where or who makes business decisions. Before constructing a
marketing organization structure, a business should consider:

1. Chain of command: chain of command refers to the hierarchy of

relationships within a business. This means defining who answers to
who within departments while making business-related decisions, and
it maps out who holds authority and who is accountable for the
overseeing, executing and approving of tasks.

2. Span of control: Span of control clearly defines who manages each

department or division and what responsibilities those departments or
divisions handle.
3. Centralization or decentralization: A centralized business allows one
or two individuals to make final decisions, whereas a decentralized
business has a team or department in charge of making final decisions.

TYPES OF MARKETING ORGANIZATION STRUCTURE

Here are seven of the most common types of marketing organization

structures you can use or adapt depending on your business needs

FUNCTIONAL STRUCTURE

Functional structures organize employees into groups based on their job

positions and skillsets. A specialized team or function group is an assortment
of employees with similar job aspects. Team leaders may manage function
groups and report to senior executives when necessary. Specialized
functional groups can promote consistent work and speed up work
performance since they don't involve employees outside of their function.
This structure is easier to manage on a larger scale because it can easily
adjust to changes in the business as it grows.

A functional marketing organizational structure describes a company’s

design and is built around the marketing functions it has to perform. As
detailed in the intro, research by Gartner shows 27 percent of marketers use
this model.

The functional structure allows for clear communication and cooperation

between different departments. It also makes it easy to identify and assign
specific tasks to individual employees.

This type of structure allows for greater specialization and expertise within
the marketing function, leading to improved efficiency and effectiveness in
marketing operations.

Amazon uses this structure for its e-commerce business because it’s well-
suited to the sector. Additionally, the functional marketing organization
structure is favored by larger organizations and is ideal for companies with a
stable environment.
Despite the positives, this structure can lead to communication breakdowns,
decreased creativity, and inflexibility. Additionally, it may be difficult to
move people around within a functional frame, potentially impacting the
company’s ability to respond quickly to market changes.

Finally, functional structures can be difficult to manage when a business

grows too large.

Merits:
1. Greatest use of division of labour is possible.
2. The system is based on expert knowledge.

3. Functional efficiency of the worker can be maintained.

4. Mass production is made by standardization and specialization.

5. Separation of mental and manual functions is possible.

6. Methods and operations can be standardized.

Demerits:
1. Too many experts and bosses (high officials) create confusion in the mind
of the worker.

2. It is difficult to fix responsibility on workers.

3. Discipline and morale of the workers are seriously affected, because of

contradictory orders from different experts.

4. There is heavy overhead expense.

PRODUCT-BASE STRUCTURE

A product-based structure is mostly ideal for a business selling multiple

products or services. This structure separates employees into groups or
divisions that focus on each individual product line. Each division can have
employees from every specialized function, whereas a functional structure
has employees divided into separate groups that focus on one specialized
function. A product-based structure can give each division independence
from one another, which allows employees to focus on their own division-
related tasks since they do not have to communicate with outside groups or
departments.
Product marketing teams have a multitude of tasks, including target
audience research, content marketing, and analytics. Then there are co-
branding partnerships to consider, with research showing 71 percent of
consumers enjoy multiple brands working together to make a unique
product.
With so much going on, what’s the best way to coordinate? By introducing a
product marketing organization structure.

In this model, each group has its team of marketers responsible for
developing and executing the marketing strategy for their specific product
line. A product marketing organizational structure is the preferred model for
businesses with different lines of products/services and looks like this:

MARKETING BASE STRUCTURE

Some businesses focus on certain industries, markets or types of consumers
while creating a marketing organization structure. Industries, markets and
consumer types are division segments that outline an organizational
structure. Focusing on individual segments gives employees the opportunity
to create marketing strategies that appeal to different consumers. These
structures are best for a business that aims to provide services to particular
parts of a market or industry.

GEOGRAPHICAL STRUCTURE

International companies usually are on a much larger scale since they work
in multiple countries and languages. Using a geographical marketing
structure can be helpful for these companies because it divides employees
into teams based on geographical regions or districts. Having teams
dedicated to certain geographical regions can assist employees in designing
local marketing strategies based on their target audience. This structure also
could allow employees in each division to become familiar with their
regions, giving them the ability to connect with their audience on a deeper
level.

When company sells its limited number of products in national market

(sometimes, international market), it organizes its marketing activities
according to geographical areas. National marketing manager (also called
marketing vice president) appoints area managers for different geographical
areas of market (may be zones, states, or specified areas).

He supervises activities of area managers. The area manager is responsible

for his respective territory. Sales and distribution officer, advertising and
sales promotion officer, marketing research officer, and administrative
officers work under the area manager. Number of area managers and
officers in each area depend on size of market, management philosophy, as
well as types of operations.

Area manager is fully responsible for the performance of his territory.

Practically, this form is used only for sales and distribution activities, and
other functional (like research, advertisement, new product development,
etc.) are centrally performed by the parent organization. Figure 6 shows
structure of geographical marketing organization. In the figure, two officers
are place under West Zone Marketing Manager. Under every geographical
(zonal) manager, needed officers can be appointed.

Merits:
1. Geographical type of divisions allow a manager to pay special attention to
the needs and problems of the local markets.
2. Geographic type of organization provide opportunities for local talent to
be utilized.

3. Geographic division helps managers gain extensive knowledge of diverse

activities.

4. This type of organization improve an organization’s relationship with

customers.

Demerits
1. This type of organization require more people to work.

2. There arise communication problems.

3. Cost of operations are high.

4. Top managers at HO find it difficult to control and supervise the activities

in different locations.

MATRIX STRUCTURE

A matrix structure is a combination of a product-based structure and a

functional structure. This is best for arranging employee departments or
teams based on their job roles and the products they are working with
because each department handles one specific product. A marketing
organization structure like this can provide more information at a faster rate
since multiple specialty teams oversee one project. Having a variety of
specialty teams responsible for one project can help employees openly
communicate and provide more resources for other employees to use while
working toward their goals.

Companies producing many products in many markets for different groups

of buyers follow this type of organizational structure. Thus, it is desirable in
multi-product/multi-market/multi-customer companies. One manager has
to take care of many products or many markets. Here, there are some
practical problems to be tackled with care.

There is possibility of conflict and confusion between two position holders

as they have to work jointly. In the same way, it is, compared to other
forms, a complex form. There is a problem of fixing authority and
responsibility.

Marketing vice president is at top of the marketing organization. Under him,

functional heads or specialists (also known as staff managers), and other
managers (known as line managers) are placed. Here, the staff means
experts who extend expert advice to line managers.

The line managers are responsible for specific products, geographical areas,
or customers groups. In short, functional marketing organization is extended
with products, areas, or customer groups. Figure 9 shows matrix of functions
and products. Under marketing vice president, there two types of manages
– three functional managers and three product managers, who work jointly.
All three product managers share resources with other functional managers.

Merits:
1. Specialized product knowledge is acquired.

Z It is economical to draw experts from various sections.

3. Expansion, improvements, diversification etc., are the result.

4. The chances of success of the project are higher.

5. It allows effective use of resources.

Demerits
1. Administrative costs are high.

2. Workers under this type have to report to two bosses.

3. There arise conflicts between functional managers and project managers.

NETWORK STRUCTURE:

A business that intends to work with another, separate business to share

resources may use a network structure, which is helpful for organizations
that want to maintain control and expedite their internal operations. A
business that provides one or two specified goods or services might want to
outsource tasks that are not performed internally, since the business is most
familiar with its internal tasks. For example, a restaurant might want to sell
custom merchandise, but outsourcing the job to a graphic designer could
allow the restaurant to focus on its core operations while expanding its
network with new partnerships.

LINEAR STRUCTURE:

This type of structure refers to the chain of command hierarchy as its

organizational structure. The top employee in the chain of command
oversees the entire business, and the other employees in the chain of
command only oversee one part of the business and refer directly to the
employee above them in the hierarchy. This structure can be best for small
businesses with few job positions.

CUSTOMER ORIENTED STRUCTURE

This type of organization is based on the different types of customers. The

enterprises have adopted customer-oriented marketing and thus there arise
two sets of organizations through which the needs of customers or market
are met; i.e., subdivision of markets on the basis of government and non-
government customers, industrial individual customers, rich and poor
customers and on the basis of sex, income, taste, age etc. A firm may have
different groups of customers, who have different needs and problems.
Thus, each section can look into the needs of each group of consumers and
facilitate their buying-wholesale section, retail section etc.

Some companies organize its marketing activities on the basis of customer

groups. This form makes sense when the company has distinct groups of
buyers (like government, industrial buyers, institutional buyers, retailed
buyers, rural v/s urban buyers, domestic v/s foreign buyers, etc.) and each
group requires different marketing (mix) strategies. Product, price,
promotion, and distribution decisions are taken according to types of
customer groups.

Marketing vice president appoints marketing managers for different groups

of buyers. He supervises performance of all managers. Every manager for
the respective group of buyers takes all relevant decisions like products,
price, promotion, and distribution. The manager for specific segment of
buyers appoints necessary subordinates to assist him.

Number of managers and subordinates under each manager depends on

number of groups, and size and area of operation. Figure 8 shows simple
customer-based marketing organization with four customers groups. Under
manager for industrial buyers, there are four managers. For other groups of
buyers, same type and number or different managers are appointed to take
care of the segment.

Merits:
1. This type of organization can encourage consumers with clearly defined
services.

2. The specialists can understand the needs of a particular segment of

customers.

3. This type of organization is useful to serve different type of customers.

Demerits:
1. Coordination between sales and other functions of marketing is difficult.

2 More man-power is required thus expenditure is high