LEAD college of management

1. Unit -5
Marketing organisation and control
Types of marketing organisation structures
Organisation is the vehicle for achieving the goals and
aims of the business. Organisation is formed whenever the
human beings gather together collectively for achieving the
common purpose.
1. Line and staff organisation
2. Product – oriented organisation
3. Territory – oriented organisation
4. Organisation with a complex structure.

2. 1. Line and staff organisation
In many firms the marketing job is structured consisting of
some line and some staff functions. Basically the line functions and
staff functions are organized into separate departments. There
should be coordination between the line and the staff functions at
high level. It is mostly suited for small and medium sized
businesses.
2. Product – based organisation
The line and staff organization could not serve the purpose
of large scale businesses, so the emergence of product based
organisation came into picture. Usually these companies produce
more than one product and they appoint the managers to take care
of the products individually.

3. 3. Territory – oriented organization
Unlike in the earlier organisation structure wherein the
product manager is being responsible for the product welfare it lies
with the line executives in the territory-oriented organisation. The
marketing job is the responsibility of line managers in charge of
territory unit.
4.Complex organisation
Complex organizations are those organizations which
are a mixture of line and staff organization, product based
organization, territory based organization. These types of
organization can also be called as multi product or multi-market
firms. They have the head offices which have many staff
departments which deals with specialized functions of
marketing.

4. Factors affecting marketing organisations
The marketing organisations of different firms are found to
vary from one another due to various factors such as,
1. Relationship between line and staff function
2. Careful planning of levels and spans
3. Effective coordination
4. Unambiguous job specifications
Relationship between line and staff function
There must exists a good relationship between the line and
the staff functions while structuring and developing a marketing
organization. No organization is free from the conflicts of the line
and the staff functions. The source of friction and the consequent
inefficiency can be abolished by proper integration between the line
and staff function.

5. Careful planning of levels and spans
The various levels in an organization and the span of
control must be properly planned and built in. the modern
organization aims at reducing the levels in an organization to make
the information accessible to all quicker and faster rate leading to
effective communication and good control, because if there are too
many levels in an organization then there are the chances of
information getting delayed leading to ineffective communication,
dilution of responsibility and poor control.
Effective Coordination
The marketing organizations should also provide for
effective coordination among the different levels within
marketing. There must be effective coordination between the
marketing departments and other departments like production,
finance, personnel, etc.,

6. Unambiguous job specifications
The integral part of creating a marketing organization
is defining clear job specifications with respect to each
executive position in marketing organization. It helps in the
removal of the ambiguities and provides role clarity. It also
reduces friction in an organization.

7. Annual plan control
Annual plan control consists of many tools, all of which
are used to establish whether the targets set in the company‟s
annual plan have been achieved or not. The company adopts a
management by objectives methodology in four steps.
1. Sets monthly or quarterly sales targets.
2. Closely watches the product‟s performance in the selected
areas.
3. Identifies significant differences between actual sales and
the set targets and the reasons and causes therefore.
4. Takes necessary steps to correct the situation and reduces
the gap between the target and sales actually achieved. This
could result in changing the support programs or even
reduoing the sales targets set earlier.

8. Plan performances are regularly checked by managers using the five
tools described as follows.
 Sales analysis
 Analyzing company's share
 Marketing costs to sales analysis
 Financial analysis
Sales analysis
This tool appraises and assesses actual sales achieved
relative to the target. Two separate tools are used in this exercise.
Sales variance analysis to calculate the contribution of various
factors to the short fall in sales.

9. Analysing company‟s share
Overall sales figures do not indicate a company‟s
performance vis-à-vis its competitors. The only way a company
can ascertain this information is to calculate its own share of the
market.
Marketing costs to sales analysis
Annual plan control must ensure that over spend
doesn‟t occur to enable achieve the targeted sales. The most
important aspect here is the marketing expense to sales ratio.
Marketing expense ratios must be watched closely.

10. Financial analysis
The expenses to sales ratios must be scrutinised within a
larger financial pattern, so as to enable the company to identify
exactly where the profits are emanating.
Market information analysis
All the controls discussed so far have been financial in
nature. Companies also need to analyse information available
in their markets.
the first of these is based on consumers,
New consumers added
Preferences of targeted market
Unhappy, disappointed customers
Product quality(relative to competition)
Consumers dropped
Quality of service
Relative awareness in the market segment.

11. Efficiency Control
Profitability analysis is a regular activity carried out by all
companies. When the company notes that some products, areas or
specific markets are realising low profits, it must take corrective
action or in other ways find more competent and effective means
to manage its sales team, its advertising and sales promotion and
channels of distribution.
They assist brand managers with budgeting and advise and inform
marketing executives on the financial consequences of marketing
decisions.
The sales teams
Advertising efficiency
Sales promotion
Distribution efficiency

12. The sales teams
Sales managers must keep a close watch on important
market place signals with regard to the levels of efficiency in
their specific areas.
The actual calls by each sales executives; real time spent
with each customer; the income gained per visit; any expenses
incurred on customer and the average cost of each visit.
Advertising Efficiency
It is generally accepted that one cannot assess or
evaluate the value received in return for the money spent on
advertising. Even so, it is imperative for advertising managers to
monitor the following.
Cost of exposure per thousand consumers for each
separate advertising medium used; the percentage of targeted
consumers who actually were attracted by and saw the
advertisement in a newspaper or magazine.

13. Sales promotion
Sales promotion utilises a generous number of tools to
motivate consumer interest in a product, and also to induce trying
it out. To enhance the achievement of sales promotion, the
management should; document the cost incurred on each
promotion and also the revenue earned by it; the number of
coupons exchanged; enquiries received in response to
demonstrations; cost of display per sales rupee.
Distribution efficiency
It is essential for managements to economise on stocks,
sites for warehouse and types of transport used.
There are many tools available to achieve the above
actions.
Management also needs to keep an eye on the cost of
logistics, accuracy of order filling, timely deliveries and the
mistakes in its invoicing system.

14. Profitability Control
In this era of competition the companies are trying to adopt
new marketing strategies to sometimes beat up the competitor or some
other times to stay in competition. The companies try to follow profit
making strategies which determine the profit from products, territories
and even trade channels. Phillip kotler have suggested 3 steps for
profitability control. They are,
i. Identifying the functional expenses
ii. Assign the functional expenses to marketing entities
iii. Prepare a profit and loss statement for each marketing
entry.

15. Identifying the functional expenses
The first and the foremost step involves identifying the
functional expenses incurred to sell a product in a defined territory
or through a channel. The functional expenses includes salaries,
office rent, warehousing cost, insurance cost, taxes, transportation,
conveyance, travelling, commissions, advertising, sales promotion,
entertainment and packing. In order to calculate the profits
generated from the sales of a product we deduct all the above said
expenses from the total sales revenue.
Assign the functional expenses to marketing entities
The second step is to assign the various functional
expenses to marketing entities. This becomes important when
expenses are incurred on non-marketing entities too.
Prepare a profit or loss statement
After the completion of 2 steps, now the marketer has to
follow the 3rd step i.e., he has to prepare the profit or loss
statement.

16. Strategic Control
The companies to stay in competition and beat up the competitor
should always have detailed reviews of their marketing strategies, the
success achieved and etc. the system of strategic control helps the
management to determine the fit between the firm‟s marketing and its
external environment.
This can be done with the help of 2 tools namely,
i. Customer relationship barometer and
ii. Marketing audit.

17. The customer relationship barometer
This aims to assess how well is the customer integrated
with the organisation. It provides inputs to the following
parameters,
a) Organisation structure
b) Organizational policies
c) Organizational system
d) Technology
e) Skills, attitude and knowledge of the people
f) Strategy for customer retention and
g) The core values of the organisation and their
internalization.

18. Marketing audit
A marketing audit is an extensive, orderly, regular
appraisal of the company‟s marketing environment, its goals,
strategies and other operations, preferably carried out by an
independent organisation to: identify areas where there are
problems or opportunities; and advise the company as to be taken
to improve its performance.
We shall first take a detailed look at the four main aspects
of a marketing audit.
There are six options available to conduct marketing
audits. They are known as self audit, audit from across, audit from
above, company‟s auditors, company task force audit or outside
audit.

19. Marketing Audit
Marketing audit can be explained, as a “systematic,
independent, critical , unbiased, periodic, comprehensive review and
appraisal of its policies, programmes, strategies, environment, activities
to determine the problem areas and opportunities and recommending a
plan of action to improve the company‟s marketing performance”.
Marketing audit has four characteristics. They are as follows,
1. Comprehensive
2. Systematic
3. Independent
4. Periodic

20. 1. Comprehensive
Marketing audit is vast in nature and it thus covers all the
major marketing activities of a business not just few problems.
Marketing audit is pervasive in nature. If the audit covers only
few areas such as sales force, pricing or some other marketing
activity then it would be called as functional audit.
2.Systematic
The marketing audit is a very systematic scrutinization
of the organization's micro and macro environment, the
marketing goals and strategies, the marketing systems and
specific activities. The audit identifies the areas which needs
improvement and an action plan is then implemented to achieve
the desired objectives. The action plans can be both for long
term as well as short term in nature.

21. 3.Independent
There are six ways to conduct a marketing audit : self audit,
audit from across, audit from above, company auditing office,
company task force audit and outsider audit. The best audit among
the following is the outsider audit as the audit is being done by the
outsider consultants who devote their time and attentions and who
also have experience in various industries and they impartial in their
operations to carry out the audit.
4. Periodic
Usually the marketing audits are conducted only after
facing certain drawbacks like the decrease in sales value, fall in the
sales force morale and various similar difficulties. Normally the
companies do not go for marketing audit in good times but rather
they conduct the marketing audit in the crisis period.

22. Components of marketing Audit
The components of marketing audit can be summarized as follows,
Part I: Marketing Environment Audit
(a) Macro environment
(b) Task environment.
Part II: Marketing Strategy Audit
Part III: Marketing Organisation Audit
Part IV: Marketing Systems Audit
Part V: Marketing Productivity Audit
Part VI: Marketing Function Audit

23. Part I: Marketing Environment Audit
Macro environment
The marketing environment audit is to two ways, the first
one is the macro environment and the second one is the task
environment. In macro environment we have some subdivisions.
1. Demographic
2. Economic
3. Environmental
4. Technological
5. Political
6. Cultural
Task environment
1. Markets
2. Customers
3. Competitors
4. Distribution and dealers
5. Suppliers
6. Facilitators and marketing firms
7. Public

24. Part II: Marketing Strategy Audit
1. Mission of the Business
2. Marketing Objectives and Goals
3. Strategy
Part III: Marketing Organisation Audit
1. Formal Structure
2. Functional Efficiency
3. Interface Efficiency
Part IV: Marketing Systems Audit
1. Marketing Information System (MIS)
2. Marketing Planning Systems
3. Marketing Control System
4. New-product Development System

25. Part V: Marketing Productivity Audit
1. Profitability Analysis
2. Cost-effectiveness Analysis
Part VI: Marketing Function Audit
1. Products
2. Price
3. Distribution
4. Advertisement, Publicity, Sales Promotion and Direct and Marketing
5. Sales Force

26. Online Marketing
Online marketing is the achievement of marketing goals
through the utilization of the internet and the web based technologies.
Online marketing is also known as internet marketing is also known as
internet marketing or marketing on the web.
Online marketing has two channels. They are as follows,
1. Commercial online service and
2. Internet
Commercial online service
Online services such as American online, CompuServe
and productivity offer marketing services to subscribers that pay
a monthly fee. These services also provide information on
education, sport, entertainment, shopping and the latest
international news.

27. The Internet
This is a vast international network, connecting other
computer networks as well as companies, universities, libraries
and so on. With the introduction of the worldwide web the usage
of the internet increased very rapidly. The use of the internet itself
is free. Users only need to pay for the services of a commercial
provider that enables the user to access the internet.
Steps involved in online marketing
1. Registration of a domain name which is interest sites address it
acts as the telephone number for people who wish to visit the
site.
2. Secondly the companies develop a web site contains web
pages often called as world wide web(www) which contains
text, picture, or sound.

28. Web – marketing can be viewed in four different ways
1. A business
2. A medium
3. A marketing channel and
4. A complete marketplace.
Benefits of online marketing
the benefits of online marketing can be divided into the
following,
1. Benefits to sellers
2. Benefits to customers.

29. Benefits to sellers
1. Access to all markets
2. Global marketing
3. Scope for unimpeded, constraints free growth
4. Offers many services and products from a single stop
5. Targets the customer individually
6. Helps in building relationships with customers
7. Helps to reduce costs
8. A versatile medium of communication
Benefits to customers
1. Convenience
2. Search advantage and wider options
3. Customers can bargain on Net with a Host of Sellers
4. Transparency and Accuracy
5. Costumers can get „More for Less‟
6. The power equation shifts in favour of the customer

30. Limitations of Online Marketing
Disadvantages of online marketing
1. All products do not lend equally well for web-marketing
2. Costs involved are not inconsequential
3. No reliable about profitability
4. Lack of personal interaction while making a purchase
5. Security
6. Can leave businessman feeling isolated
7. Information overload
8. Hard to tell if people are lying