Dciore being spun off, DuPoat's (entile libers department consisted of separale product managers tor rayon. aceîatE. nylon, orlon, and dacroti: and séparai? market managers lor menswear, women's wear, home furn ¡sitings, and mtfuslrial marked. The product managers planned me sales and profits for Itieit respective fibers. They asked martel managers to estimate how much of their fiber they could sell in each market gt a proposed price. Militai irtânacers. however, were generally mere interested in meeting lherr markeis needs thin peShlnflâ particular filwr, in preparing the r market plans, ihey asked ea:h prflduct mgneiger about the liter's planned prices and availabilities. The final sales forecast of the market managers and ihe product managers should have adced ■ up to 1-I1& same grand total.
Companies like DuPont can go one step further and view the market managers as iltc main markelers, and their product managers ¡is suppliers, the men swear nifirkel manager, for example, would be empowered lu buy textile fibers I'roni Du Font's product managers or, if Ou l'on ts price is too high, from outsHc suppliers. This system would force Piipoht product managers to become inure efficient. If a Dill'on I product manager could not match the "'¿trtu's-lerigili pricing" level sol'competitive sup pliers, then perhaps Duponi should not continua to produce thai fiber.
A matrix organization would seem desirable in a muliiproduci, multimarket company. The rub is that tliis system is cosily and often creates conflicts, 'I here is ihe cost of supporting all the managers. There are also questions about where authority and responsibility should reside.
Matrix management gain«! advocates because companies provide the context In which a matrix can thrive—flat, lean (earn organizations focused ground business processes thai cut horizontally across functions.1*'
CORPORATE-OIVISIONAt ORGANIZATION As mtiltiproduct. multimarket companies grow, they often convert their larger product or market groups into separate divisions. The divisions set up (heir own departments and services. This raises the question of what mar-
kiting services and activities should be retained at Company headquarters. Divisionalized companies have reached different answers in this question:
a Ai'o Corporate Marketing, some companies lack a corporate marketing staff. They do 1101 sec any useful Function for marketing at the corporate level. Each division has its own market! tig department.
■ Moderate Corporate Marketing. Some companies have a small corporate markeflhg staff that performs a few functions, primarily (t) assisting top management with overall opportunity evaluation, (2) providing divisions with consulting assistance on request, (3) helping ti ivi sions 11 ] at h ave little or l to m arkel i ng, and ) p roi not i ng t he mrtrkel i tig CO n cep11 h rough -tnii l he company.
:.■ Strong Corporate Marketing. Some companies have a corporate marketing stall' that, in addition to the preceding activities, also provides various marketing services to the divisions, such as specialised advertising services, sales promotion services, market!tig research services, and sales administration services.
Ilegaidlessufhow formalized corporate marketing is, certain activities must occur \vh bin the Organisation in a "top-down" fashion. Webster sees the role of marketing at the corporate level as;1"
1. To pro]note a culture of custtimer orientation and to he an advocate for the customer in tile deliberations of top-management strategy for mutators. Z. To assess market attractiveness by analyzing customer needs and wants and competitive ufferings.
3. To develop the firm's overall value proposition, the vision and articulation of how it proposes to deliver superior value to customers.
In principle all business functions should interact harmoniously to pursue the firm's Overall objectives, in practice, however, interdepartmental relations are often characterised by deep rivalries and distrust. Some conflict stems from differences Of opinion as to what is in the Company's best interests, some from real irade-offs between departmental well-being and company well-bg, and some From unfortunate stereotypes and prejudices.
In the typical organization, each business function has a potential impact on customer satisfaction, Under the marketing concept, all departments need to "think customer" and wurk together to satisfy customer needs and expectations. The marketing department must drive this point home, The marketing vice president, nr CMO, has two tasks: (1) to coordinate the company's internal marketing activities and IZ) in coordinate marketing with Finance, operations, and other company functions to serve the customer.
Vet, there is little agreement on hou- much influence and authority marketing ijbouId have over other departments. Typically, the marketing vice president must work through persuasion rather than authority. Other departments often resist changing their ways (if working to fulfill the customer's interests. Inevitably, departments del me company problems and goals from their viewpoint, so conflicts of interest are unavoidable. Breakdowns in communication further exacerbate the problem. Consider the following potential negative reactions thai marketing can receive from different functional groups.
a Engineeringcomes into conflict with marketing executives when the latter want several models produced, often with product features requiring custom components. Engineers Often think of marketing people as inept technically, as continually changing priorities, and as not fully credible or trustworthy.
a i'nrchasiiigExecutives see marketing executives pushing For several models in a product line, which requires purchasing small quantities of many items rather than large quantities of few items. They think that marketing insists on too high a quality for materials and components- T'hey also dislike marketing's forecasting iriELccuracy, which causes them to place rush orders at unfavorable prites or to carry excessive inventories,
.. Financial Executives suspect that marketing forecasts are self-serving, They think marketers are too quick to slash prices to wn orders, instead of pricing to make a profit They claim that marketers "know the value of everything and cost of nothing,"
s Accountants see marketing people as lax in providing sales reports on time. They dislike the special deals salespeople make with customers because these require special accounting
70J PART a creating successful long-term growth procedures. Credit ofiltert evaluate potential customers' credit gliding and deny or limit credit 10 the more doubtrul ones. They think marketers will sell to anyone, including those from whom payment is doubtful.
Companies need to develop a balanced orientation in which marketing and other functions jointly det ermine what is in Lhc company^ Pest in teres ts. Solutions Include joint seminars to understand each others' viewpoints, john commit tecs and liaison personnel, personnel exchange programs, and analytical methods to determine the most profitable cotirsc uf action."'
Perhaps the best solution is for marketing tu periodically proposesfiiticli6thla-fnHciion meeting with departments where greater understanding and collaboration is warranted. Even if each function indulges in stereotypical charges arid complaints about the other, such a meeting can lead to a clearing of die air and a basis for a mote constructive collaboration. Hach department needs to understand the operating Eoglc öf the other departments. When departments work together toward common goals, marketing is more effective.
PROCTER & GAMBLE
Witt) 19 of Iheir 20 largest brands gaining share anu a stock price that doubled, Procter fi Gamble was clearly oa a rait during 2D02-2QD4. Organic growth in core businesses p/m'ided much dl me impetus. F&G's new product hit rate, delincd in terms of when returns exceeded Itie cost ol capilai, wai 70 percent 1o percent. Although Ulis extraordinary performance was dtre to many factors, ctose interactions between marketing and 7,500 personnel worldwide was critical. To facilitate interaction, problems and solutions ate posted an an internal Web sile and "communities of practice" dedicated to particular expertise (e.g., "whinners"} meet frequently, Joint collaboration between tüffererft units of P6£ has produced sucti diverse presorts as frest Whitestrips teem wJiitensrs, lams Denial Defense tartar-ltjhtint; pel food, and Olay Daily facials cleansing Cloths. Mr. Clean AirtoDry carwash system was designed ntitl input from FSD experts who worked on the Slir water * purifrcalion and Cascade automatic dishwasher powder brands.19
Many companies are beginning to realize that they are not really market- and customer-driven—they arc product-and-sales driven. Companies such as Baxter. General Motors, Shell, and i.P, Morgan are attempting to transform themselves into true market-driven companies. This ivill require:
1. Developing compiiny-vvide passion for customers.
2. Organising around customer segments Instead Of around products,
3. Developing a deep und ersinn ding of customers through qualitative and quantitative research,
The payoffs are considerable. Twq researchers recently concluded; "We found that the more aggressive a company's cus tu in er-focused strategy, the higher its productivity. Those with a customer focus were almost 7 percent more productive titan their competitors."30
The task is not easy, It will not happen as a result of the CüO making speeches and urging every employee to "think customer." The change will require a change In job and department definitions, responsibilities, incentives, arid relationships. See "Marketing Insight The Marketing Cl:0" for actions a Cl!0 can take to improve marketing capabilities.
Although it is necessary in a hyperconipotiiive economy that an organization be customer-oriented, it is not enough. The organization must also be creative. Companies today coi?y eath others' advantages and strategies with increasing speed. Differentiation gets harder to ac hieve, let alone maintain. Margins fall when firms become en ore alike, The only answer is for the firm to build it capability in strategic innovation and imagination (sec "Marketing Insight; Fueling Strategic innovation"). This capability comes from assembling tools, processes, skills, and measures that will enable the firm to generate more and better new ideas than its competitors.^1
Companies must watdi trends and lie ready to capitalize on ihem. Motorola was 1» months Eate in moving from analog to digital cellular phones, giving N'okia and Ericsson a big lead. Harries & Noble teas late in recognizing online Ordering of bonks and music, giving Amazon the lead. Nestl£ was late in recognizing the trend toward coffeehouses such as Starbucks, Coca-Cola was slow in recognizing beverage trends toward fruit-flavored drinks such as Sttapple, energy drinks si!eh as Calorade, and designer water
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