Download the organization of the marketing sections within the firms selling oil

THE ORGANIZATION OF THE MARKETING SECTIONS WITHIN THE FIRMS
SELLING OIL PRODUCTS
Rada Dr. Ioan Constantin Rada,
University of Oradea, UniversităŃii street, no. 1, phone number 0740/048182, e-mail: [email protected]
Păcală Drd. Anca Păcală,
University of Oradea, UniversităŃii street, no. 1, phone number 0722/822275, e-mail: [email protected]
Abrudan Drd. Simona Veronica Abrudan,
University of Oradea, UniversităŃii street, no. 1, phone number 0744/241599, e-mail:
[email protected]
The modern Marketing Section can take different forms. All organizational structures that relate to the
marketing activity should be adapted to the four dimensions of the marketing activity: functions, geographical
areas, products and markets.
The firm specialised in oil products can follow the example of successful companies that, instead of
putting into practice a centralised marketing policy, which is identically applied for all its clients, might
structure their selling of oil or complementary products, as well as that of the liquefied oil gas charges, their
advertisements and selling promotion activities, and the personal selling, in such a way that they might became
more versatile in terms of the specific needs of the locations where their sections (commercial units,
storehouses), distribution centres and fixed units develop their activity, or even where their competitors have
placed their distribution stations or the stable centres for selling the liquefied oil gas charges.
The firm selling different kinds of oil products, liquefied oil gas charges, or other complementary
products can set down a way of organizing its Marketing Service, taking into consideration the product-oriented
criterion. This way of organization does not replace the functional structuring, but is used as a different
management level.
“the successful adaptation to changes that occurs on the oil products business and consumption markets”
“in order to benefit from a modern marketing section, the firm selling oil-products has gone through different
stages in its evolution”
“all the forms of organizing the marketing activity should be adapted to the four dimensions of the marketing
activity: functions, geographic locations, products and markets”
“the relationships between the services and the sections within a firm selling oil-products are often marked by
mistrust and deep-seated rivalry”
“when the firm selling oil products organizes its activities in terms of its customers, and when its management
comes to the conclusion that the marketing activity should not be restricted exclusively to the Marketing Section
proper, but should involve each of the sections and providers of services within the firm, it will become a
successful company in the field of commerce with oil-products”
1. Ways of organizing of the Marketing Department within the firm saling oil products
The modern Marketing Department can take different forms. All organizational structures that relate to the
marketing activity should be adapted to the four dimensions of marketing activity: functions, geographical areas
and markets.
1.1. The organization of the marketing department in terms of functional criteria.
This type of organization of marketing activity consists in the subordination of several specialists from
different marketing areas to a Head of the Marketing Department, who organizes their activity:
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HEAD OF THE
MARKETING
DEPARTMENT
SPECIALIST
WITH MARKET
SURVEY AND
PLANNING
MARKETING
SPECIALIST
WITH
MARKETING
INFORMATION
SPECIALIST
WITH
MARKETING
RESEARCH
SPECIALIST
WITH
MARKETING
ANALYSIS
SPECIALIST
WITH
MARKET
ADVERTISING
AND
PROMOTION
Fig.1. The organization of the marketing department in terms of functional criteria of the selling oil
products firm
The main advantage of organizing the marketing activity by functional criteria lies in the simplicity of this
method of organization. However this method loses its efficiency with the increase of the oil, complementary,
l.o.g. products that are being sold and the expansion of the market.
First, there is an inadequate planning for some products and markets since nobody is fully responsible of a
certain product or market.
Secondly, functional groups compete with others for a larger part of the budget and a higher status. The head of
the Marketing Department must temper the demands of competing specialists and thus the co-ordination
becomes increasingly difficult.
1.2. The organization in terms of geographical criteria
A company selling oil products distributes its products on either a regional or a national market, often
organizing its Marketing Department by geographical criteria. Thus, the general manager is able to co-ordinate
area managers (branches, warehouses), who consequently manage the activity of those sections, and co-ordinate
managers of oil products distributions stations, as well of managers of fixed stations that sell l.o.g charges, who
actually manages the sales in stations, through salesmen.The level of control increases by going down on
hierarchy to managers of sections and managers of stations (co-coordinating administrators).
There are some factors that stimulate such a marketing method.
First, in the case of oil, complementary, and LPG products, the market has divided slowly in a
multitude of small markets, families with many children, pensioners, elder citizens, car owners, since
the traffic of heavy vehicles within the citz has been restricted. Marketing specialists realized that it is
difficult to create a single program for different groups. For instance, it is impossible to apply the same
distribution program in a border station or a city district.
− Secondly, the company might improve its information technology and its market research, thus
stimulating the local marketing activity. For instance, the data acquired by recording systems, installed
in distribution stations, allow a better real time tracking of gasoline, diesel, LPG or complimentary oil
products in each station, thus allowing a precise identification of local problems, opportunities and
required marketing steps.
− A third factor is the presence and the increasing strength of competitor stations, whose register systems
give them access to more and more information. Sometimes the competitors may not try to
counterstrike the marketing campaigns of the company, which are directed towards customers, being
concerned with the marketing activitz directed towards the local selling, from one station to another.
For instance, the company may start this campaign with the knowledge of the economic potential of
areas and the needs of the customers. In mainly agricultural areas, or in those where the traffic of heavy
trucks predominates, the Diesel oil will certainly sell better. In urban areas, where personal cars
predominate, the gasoline will sell better. The LPG charges shall will be sold in a larger proportion in
areas inhabited by older people.
Within each commercial area where the company has some sub-sections or distribution stations, the managers
must have the adequate competence in order to control the advertising and the promotion programs, adapted to
the demands and the conditions of local market. They can use local advertising elements only if these are
efficient in the respective areas.
Such activities can be accompanied by an orientation towards the emancipation of commercial unit . This means
that the commercial unit will work more as “franchise”. Instead of being strictly managed from a central office,
local managers can be encouraged to became more independent in terms of decision-making.
−
1.3. The organization in terms of the products that are being sold.
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The firm selling different kinds of oil products, LPG charges, or other complementary products, can set down a
way of organizing its Marketing Service, taking into consideration the product-oriented criterion. This way of
organization does not replace the functional structuring, but may be used as a different level of the management
. Within the product-oriented organization, the product manager (the head of the Marketing Department)
assumes leadership and coordinates managers that are responsible with different categories of products (oil
products, l.p.g charges, related services).
The product-oriented marketing is acceptable if oil, complementary and LPG products are different and the total
number of the sold products exceeds the capacity of the Marketing Departmen, which is organized by functional
criteria. This organization system can be used together with the type of organization by functional criteria,
within the Marketing Department, by setting the task of product manager to specialists who have other duties as
well.
The tasks refer to the elaboration of marketing plans, the supervision of the process of implementation, the
analysis of results and the subsequent corrective action. For instance, in the case of oil products, the following
examples of tasks may be relevant:
the elaboration of competitive long-term strategies for the marketing of oil products
setting the annual marketing plans and prognosis
cooperation with the advertising and the “merchandising” specialist, in order to create commercials,
programs and campaigns for oil products
−
stimulating the support of oil products by sale staff and resellers
− continuous gathering of information regarding the performances of oil products, customer and reseller
attitudes, new problems and opportunities
− initiate actions to improve the merchandising system of oil products for a better satisfaction of
demands, within an ever-changing market
The product managers working within the Marketing Department must dedicate a great amount of time for
advertising activities and sales promotion, and spend more time with employees, rather than with customers.
The organization in relation to products, together with theorganization by functional criteria, present some
advantages:
First, the head of the Marketing Department, as products manager, can focus upon the ellaboration of a
marketing mix that is economically efficient for oil products, GPL charges and complementary products.
Secondly, the head of the Marketing Department can react more promptly than a commission of specialists in
marketing problems.
Thirdly, the firms producing complimentary products are no longer neglected because of the support they
receive.
In addition, product management is an excellent training school for all specialists from Marketing Department,
who are responsible with products-and not only, because these specialists become involved in all areas of
activity withinthe firm selling oil products.
Product management might create some conflicts and frustrations. Usually, the product managers are not
granted enough authority so that they might efficiently accomplish their tasks. They have to rely on their
persuasion skills in order to ensure the cooperation of the advertising specialist, as well as that of the selling,
technical and the legal departments. They are often called "big boss", although they are treated as small
coordinators. They are “suffocated” by bureaucratic activities that are associated with a firm selling oil products.
In order to manage in their own field, they sometimes need to ignore the rules of fair competition.
Secondly, the product managers became experts as far as the product they are selling is concerned (oil,
complementary or GPL charge), but rarely became experts in some of the functions of the firm.
Thirdly, the way of organization based on product management is expensive if this is not associated with the
type of organization in terms of functional criteria.
Fourth, product managers supervise the activity of selling the oil, the complemetary product, or theGPL charges
for only for period of short time as they might be made responsible for another product in few years' time,
move to a different firm, or abandon completely the product management, thus encouiraging the short-time
marketing planning and influencing the long term selling of the respective product.
For a better organization of the system in terms of the integrated products criterion, the following process should
be followed:
−
−
−
−
−
−
The firm must state clearly the role and tha tasks of the product manager in relation to the product. He
or she is the person who comes up with suggestions, but does not make decisions
The firm needs to set the process of conceiving and analysing its strategies, in order to provide a workframe for the activity of the product manager. The firm must not allow its product managers to dedicate
their activity to the setting of some superficial marketing plans for the product they are responsible for,
which would result in numerous statistics but bring about poor strategic reasoning.
When the role of the manager is defined, the firm must take into consideration the possible conflicts
that might arise between product managers and other specialists from Marketing Department. It must
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be stated celarly what decisions are to be made by the product managers and what decisions will result
from the collaboration between different specialistas
− The firm must draw up a formal procedure in order to solve the possible conflicts of interest between
product managers and the specialists from the Marketing Department, through the intervention of the
head of the department. Both sides involved in the conflict must forward to the head of the department,
in written form, their points of view.
− The firm must create a system that might evaluate results, in relation to the responsibilities of the
product manager. For instance if the latter is responsible with the profits that are expected after the
selling of a certain product, he or she must be able to exert control over the factors that influence the
profits.
− Another alternative for the organization of the marketing service, in terms of the product cirterion,
relies on the product team, made up of the product managers and other specialists within the marketing
department, who are responsible with the advertising, information and analysis processes, etc.
A thiord alternative would be the attribution of two or more products to a product manager.
1.4. Organising the marketing department in terms of the market.
The firm sells its products on the commodity and the business markets. When customers can be separated into
groups of consumers, with specific preferences and buying practices (for instance, in the case of the commodity
market, the buyers of oil products and l.o.g charges – oil, disel oil etc.), the organization can be made in relation
to the market criteria.
The head of the marketing department co-ordinates the activity of more than one market manager (they are also
called managers for the development of the market, or market executives). The market managers can make use
of the functional services of the Marketing department whenever necessary. They also organize the activity of
the respective market sector. They have duties that are similar to those of the product managers. The market
manager ellaborates long-term and annual strategies for the market sectors he or she is responsible with.They
must analyze the tendencies that predominate on the respective markets and understand which are the most
appropriate products to be sold on that market (oil, complementary products, or the l.p.g. charges). Their activity
is evaluated in terms of their contribution to the increase of the market share rather than in terms of the
rentability registered on that particular market. This form of organization presents many of the advantages and
the disadvantages of product-based management systems. The main advantage is represented by the fact that the
marketing activity is directed towards the satisfaction of specific groups of customers rather than focus on the
marketing fucntions, regions, or products.
The only way to obtain a market-oriented organization is to place the commodity and the business markets at the
centre around which the commercial units, the distribution stations and the fixed centres of the firm selling oil
products are organised. The marketing department should establish the tasks for those responsible for the
commodity and the business markets. For instance, the person responsible for the business market should
establish contact with the economic agents, the institutions (schools, hospitals, prisons, etc), agricultural
associations, etc, in order to understand their demand for oil products.
1.5. The organization of the marketing department in terms of the combined criteria of product and
market.
The firm selling more than one oil product, l.o.g charge, or additional products, on the commodity and the
business markets might be confronted with a dilemma. It can rely on a system of organization based on the
product management or on the market management. In the second situation, those who are responsible with the
commodity and the business markets should be familiar with the different types of oil products, l.p.g. charges
and additional products that are needed on the market, and the agent might rely on both the product and the
market managers. This alternative can be put into practice.
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Commodity markets
(population)
The market manager
Business markets
Economic
agents
Resellers
Agricultural
associations
Institutions
Oil products
The product
manager
Additional
products
l.p.g. charges.
Fig.2. The system of organiation (management) in terms of the product and the market
The firm can establish, within its marketing department, separate responsibilities for each oil product,
l.o.g charge or additional product, and for each commodity or business market. Its aim is to extend the usage of
the products it is responsible for, and consequntly the market managers will have to estimate the quantity of oil
products required on the market. On the other hand, the market managers are interested to satisfy the needs of
the market they are responsible for, rather than promote a certain type of oil or additoional product, which is not
demanded on the market he or she is responsible for. In setting plans for that specific market, they will ask each
product manager about the prices of different oil products, l.o.g. charges and additional products, and about the
existing resources. The final predictions of market and product managers should lead towards the same general
conclusions.
A matrix-type organization represents an ideal choice when the firm intends to sell many products on several
markets. However, this system may prove expensive and conflict-generating. First, there is the problem of the
cost needed for the product (oil products, l.o.g. charges and additional products) and the market managers. The
following problems might appear:
−
−
How should the selling force be organised? Should the selling forces be distinctive for oil products
(gasoline, diesel oil, fuels), l.o.g. charges and additional products? Should the selling forces be
organised in terms of the commodity and the business markets? Wouldn't it be necessary for the selling
force to be specialised?
Who should set the price for a certain product or a certain market? Could the agent responsible for a
certain oil product be granted the authority to suggest the price for oil products on the two markets?
What happens when the agent responsible for the commodity market feels that the selling of the oil
product (the diesel oil) will decrease if the price is not changed?
Bibliography
:
1.
2.
3.
1.Kotler & Amstrong, - “Principiile marketingului”, Ed. Teora, Bucureşti, 2002, Ed. a II a.
2.Rada,I.C.;Ungur, I.;GogoneaŃă, E; - “Marketingul comercializării produselor petroliere”,
Ed.PamGroup, 2002
3. Negucioiu, A; Dragoescu, A; Pop, Sabin; - “Economie politică”, Ed.G. BariŃiu, Cluj Napoca, 1998
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