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,

Designing market-driven organizations

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*
*
*
*

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 - worlds 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
* Marketings links to other functions
* Finance/accounting
* Operations
* Sales
* R&D
* Customer service
* Human resource management
* Approaches to achieving effective integration
14-14

Marketing departments
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*
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*

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)

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*

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)

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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