Marketing Management

Marketing Organization

Evolution of the marketing department

Marketing organization has undergone significant change and modifications over the years. The changes have resulted mainly on account of two factors: changes in business philosophies and approaches, and changes in marketing's environment. Marketing need to take advantage of the recent developments in the business environment particularly resulting from the process of globalization, liberalization, and technological advancements in every sphere of business operations. Philip Kotler has identified six distinct stages in the evolution of the marketing department.

Stage 1.                    Simple Sales Department

Organizations operating under the production and product concepts have simple sales department organization. Under this structure marketing assumes the simple selling role. The organization structure shows production, finance and personnel departments at the upper levels while the selling function is handled by a sales department which has a lower status than the three departments. In the sales department, the sales manager handles two divisions: The sales force management division and other selling functions departments. The role of pricing and distribution are handled by the finance and production departments respectively. This organization structure is also adopted by small organizations.

Stage 2.                    The Sales Department with Marketing Functions

Organizations adopting the selling concept give higher weight to the sales department. The department is further strengthened by adding some of the marketing functions such as marketing research, promotions and distribution under a marketing manager. In this stage the status of the sales department is also enhanced and the department is placed on equal footing with the production, finance and personnel departments.

Stage 3.                    The Marketing Department

When an organization adopts the marketing concept it starts by installing a separate marketing department with added responsibility in the area of new product development, advertising and consumer services. Despite the establishment of the marketing department the organization also maintains the sales department in order to handle the sales force management and promotion functions.

Stage 4.                    Modern Marketing Department

In the evolutionary process, functioning of the two separate departments-sales and marketing – becomes complex and often results in interpersonal conflicts. Thus, two departments are merged. Under this organization structure the sales department is placed as a major division under the marketing department.

Stage 5.                    Effective Marketing Company

Organizations adopting the customer oriented approach change their total focus from marketing to customers. The customers become the focal point for all organizational activity. Organizations add customer service division and market research division under the marketing department.

Stage 6.                    Process and Outcome Based Company

Currently, organizational focus has shifted from departments to key processes such as new product development, order fulfillment and customer relations. The departmental heads are replaced with process leaders and the interdepartmental boundaries are dismantled.