Strategic Marketing
1. Imperatives for Market-Driven Strategy
2. Markets and Competitive Space
3. Strategic Market Segmentation
4. Strategic Customer Relationship Management
5. Capabilities for Learning about Customers and Markets
6. Market Targeting and Strategic Positioning
7. Strategic Relationships
8. Innovation and New Product Strategy
9. Strategic Brand Management
10. Value Chain Strategy
11. Pricing Strategy
12. Promotion, Advertising and Sales Promotion
Strategies
13. Sales Force, Internet, and Direct Marketing Strategies
14. Designing Market-Driven Organizations
15. Marketing Strategy Implementation And Control
Chapter 14
Designing
Market-Driven
Organizations
McGraw-Hill/Irwin
Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
Designing market-driven organizations
*
*
*
*
*
Trends in organization design
Organizing for market-driven strategy
Marketing departments
Structuring marketing resources
Organizing for global marketing and
global customers
14-3
Designing market-driven organizations
* Procter and Gamble
* Global restructuring to improve innovation and
competitiveness
* Global business units for products and market
development units to tackle local market issues
* Change agents appointed to work across
business units
* Virtual innovation teams work through intranet
* Organization design supports clear strategies so
all business disciplines can work together
14-4
Trends in organization design (1)
* The New Organization
* Traditional structures
* Centralized, vertical, “command and control”
* Organizational design shifts
* Innovation
* The knowledge-based worker
* Managing culture
* Collaborative working
* Informal networks
* Organizational diversity and external
relationships
14-5
Organization costs
* Cadbury Schweppes - world’s largest
confectionery business
* Restructuring at cost of $900 million
* Organizational structure has become too
complex with too many overlaps
* Organizational costs account for 20% of
turnover - compared to 12% at competitors
* Reorganization is central to regaining
competitiveness
14-6
Trends in organization design (2)
* Managing organizational processes
* Organizational agility and flexibility
* Zara
* Toyota
* Employee motivation
* “MySpace Generation”
14-7
Alternative Organizational Structures
Traditional
Hierarchy
Process
Overlay
Functional
Structure
Process
Structure
Functional
Overlay
Horizontal
Structure
14-8
Process-based organizational structure
Processes that define value
e.g. knowledge management, CRM
Process
Leadership
Coordination
mechanisms
to link
process and
resource
leadership
Processes that create value
e.g. new product development,
innovation
Processes that deliver value
e.g. logistics, customer service,
value chain relationships
Specialist resource groups support process
Managers e.g. functional departments,
business units, external collaborators
Resource Group Leadership
14-9
The Toyota way
* Pillar I
* Challenge
* Kaizen - continuous improvement
* Genchi Genbutsu - go and see for
yourself
* Pillar II
* Respect
* Teamwork
* EM2 - Everything Matters Exponentially
14-10
The MySpace Generation
* Lives online - social networking sites are a
way of life
* Children of the babyboomers
* Ambitious, demanding and question
everything
* Work/life balance is very important
* Expected to be the highest maintenance
workforce in history and the most highperforming
* “You raised them, now manage them”
14-11
Organizing for market-driven strategy (1)
* Strategic marketing and organization
structure
* Aligning the organization with the market
* Informal lateral integration
* Integrating mechanisms
* Full customer alignment
14-12
Customer-based front-end organization
Senior Management
Mediation
from the
center
Back-end Units
Product customers
Shared planning and metrics
Internal linkages
Customer-based
Front-end Units
Solutions customers
14-13
Organizing for market-driven strategy (2)
* Marketing functions versus marketing processes
* Marketing as cross-functional process
* The challenge of integration
* Marketing’s links to other functions
* Finance/accounting
* Operations
* Sales
* R&D
* Customer service
* Human resource management
* Approaches to achieving effective integration
14-14
Marketing departments
*
*
*
*
Centralization versus decentralization
Integration or diffusion
Contingencies for organizing
Evaluating organizational designs
14-15
Organizing Concepts
Centralized Formalized
Nonspecialized
BUREAUCRATIC
Internal
(hierarchical)
Organization
of Activity
TRANSACTIONAL
External
(market)
Organization
of Activity
ORGANIC
RELATIONAL
Decentralized
Nonformalized
Specialized
14-16
Structuring marketing resources (1)
* Structuring issues
* Functional organizational design
* Product-focused design
* Product/brand management
* Category management
* Venture teams
* New product teams
* Market-focused design
* Matrix design
14-17
Traditional Marketing Organization Designs
Functional
Matrix
TRADITIONAL
DESIGNS
ProductFocused
MarketFocused
14-18
Product-Focused Structure
14-19
Marketing Organization Based on a Combination of Functions and
Products
14-20
Structuring marketing resources (2)
*
*
*
*
*
New marketing roles
New marketing specializations
Venture marketing organizations
Partnering with other organizations
Networked organizations
14-21
New organizational structure for marketing
Vice President
of Marketing
Director of
Product
Management
Chief
Customer
Officer
Customer
Service
Customer
Database
Marketing
Research
14-22
The Marketing Coalition Company
Source: Ravi S Achrol, “Evolution of the Marketing Organization: New Forms for Turbulent
Environments”, Journal of Marketing, October 1991, 88.
14-23
Organizing for global marketing and global customers
* Organizing for global marketing strategies
* Business functions
* Organizational issues
* Coordination and communication
* Organizing for global customers
* The growth in global retailers
* Global account management structures
14-24
Global account management at Microsoft
* Single executive/team in charge of single
customer and all global needs
* Restricted to customers by revenue size but
also willingness/ability to partner
* Senior managers encouraged to develop
relationships with senior managers at global
accounts
* Global business managers work across
business units, functions and organizations
14-25