Download Innovative Marketing Organization is Essential in Company Performance

Innovative Marketing Organization is Essential in Company
Performance
ZUO Li, LIU Yan Ping
School of Economics & Management, BeiJing JiaoTong University, Beijing, China 100044
Abstract With the rapid development of customers’ needs, globalization and technology, market
competition among the firms becomes fiercer. At this time, enterprise’s marketing capability has already
exceeded productivity and R&D capability and become the most important capability of enterprise to
win the competition. Marketing capability is based on the rationality of enterprise’s marketing
organization. This paper analysis the factors which affect marketing capability and the type of marketing
organization, then design, manage and innovate marketing organization in order to create the
market-driven enterprise organization to improve enterprise’s marketing capability, to cultivate,
maintain and renew enterprise’s sustainable competitive advantage.
Key Words Marketing capability Marketing organization innovation
1 Introduction
The marketing capability of enterprise is the capability of marketing strategy research and marketing
tactic planning, which includes the ability of producing proper products, personal selling, distributing of
marketing channel, customers service, and customer management, which guided by marketing research.
[1]
It is necessary for the enterprise to build a healthy marketing organization to manage and take charge
of all the marketing activities, such as setting up and carrying out marketing strategies, tactics and plan,
managing marketing channels. The structure of marketing organization must match with the scale and
developing strategies of the enterprise, otherwise the marketing organization will hinder the marketing
efficiency and the realization of enterprises’ goals.
Promoting the marketing capability of a enterprise needs not only every marketing person to work
together, but also all the staffs of the enterprise to cooperate tightly. The marketing organization of the
enterprise is the basis and carrier of the marketing capability. The marketing capability of the enterprise
depends on the rationality of the marketing organization and the correspondence between the marketing
organization and the enterprise’s developing strategies.
At present, the research on enterprise’s marketing organization is seldom, now the research is focused
on the basic structure and function of the marketing organization. For example, Philip Kotler mainly
studied how the marketing departments evolutes in the enterprise, and how they are organized, and how
they interact with other departments. After that, other persons mainly researched the role of the
marketing organization in the relationship with the outer partner from the role within the enterprise. In
the late of 1990s’, some Chinese marketing researchers began to study the marketing organization, but
they just halted on the function and building of the marketing organization, the scope of the marketing
organization was limited in the marketing department within the enterprise. Few of them could study
how to innovate marketing organization to promote the marketing capability according to the present
marketing environments.
With the rapid development of customers’ needs, globalization and technology, market competition
among the firms becomes fiercer. At this time, enterprise’s marketing capability has already exceeded
productivity and R&D capability and become the most important capability of enterprise to win the
competition. For the enterprise, one of the methods to promote marketing capability is to innovate
marketing organization according to the change of the environments, and make it fit in with the
developing strategies of the enterprise under the new environment, and establish the scientific and
effective foundation for the marketing enterprise organization, and cultivate, remain and renew
enterprise’s sustainable competitive advantage.
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2.Requests for marketing organization to prompt enterprise’s marketing
capability
2.1 The concept and constitution of marketing capability
Enterprise’s marketing capability is all kinds of enterprise’s comprehensive techniques and skills by
long-term management and accumulation. Marketing capability is a permanent characteristics which
determine marketing effects, such as initiative, influence, the spirit of teamwork, the spirit of innovation
and the capability of strategic thinking. Marketing capability is the capability of accommodating to the
change of market, guiding consumption actively, obtaining competitive advantages to achieve business
target. Marketing capability is a comprehensive capability which includes analyzing market, developing
market, applying marketing mix integrated and managing produce activities to enlarge market capacity.
From the marketing procedure, enterprise’s marketing capability can be divided into the following
four capabilities: See table 1.
NO.
1
2
3
4
Table 1 Marketing capabilities of each marketing phase
Phase
Capabilities
Marketing Preparation Phase
The capability of collecting and making up marketing
information
Making marketing plans Phase
The capability of analyzing market and making marketing
strategies and tactics, including segmentation, targeting,
positioning, making plans, and so on.
Carrying out marketing plans The capability of executing marketing strategies and
Phase
tactics, including managing and monitoring marketing
process, sales management, managing channels,
communicating with other departments, innovating
marketing rules and so on.
Marketing feedback and prompt The capability of collecting after-sale information and
ion Phase
adjusting marketing activates, including after-sale service
and customer management.
2.2 Marketing organization is the foundation of realizing marketing capability
In a sense, in fact enterprise’s marketing capability is the capability of adapting to the environment,
which is if enterprise can launch corresponding marketing activities against constantly changing
environments. But this depends on marketing organization of enterprise: if the marketing organization
adapts to the market and is effective. Management scholar Chandler said :”Structure must follow
strategies.” When the environment changes, enterprise should flexibly adjust corresponding strategies
and tactics timely in light of its own characteristics and conditions, and devise corresponding marketing
organization structure dynamically, allocating marketing resources rationally, and prompting market
competitiveness. Famous scholar Aser D
Liter raised a model of high performance business
characteristics, which think the key factor to gain success is : interested parties, process, resources and
organization(see figure 2.1). So from this we can see, organization is the foundation and key factor for
enterprise to realize targets.
· ·
Build strategies to meet key
interested parties
Interested
parties
Improve
process
key
Process
Matching resources and
Resources
organization
Organization
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Figure 2.1 High performance business
Enterprise’s marketing capability is entwined with marketing process tightly, because this capability
can realize all the activities in the transaction process. The nature of prompting marketing capability is
to create a dynamic service mode which can adapt to market demand, handle market demand quickly
and effectively, and solve the contradiction between production and demand effectively based on the
innovation of concept of technique, production and service. Creating such a mode cannot depend on one
person’s wisdom, but require sustainable marketing innovation capability for the whole enterprise. So
the key of prompting marketing capability is to build a marketing organization which fits in with the
enterprise’s developing strategy and a marketing-driven enterprise organization.
2.3 The characteristics of modern marketing organization
In view of the current marketing environment, enterprise’s marketing organization must have the
following characteristics to prompt marketing capability.
1. Customer-oriented. Because markets are getting smaller and smaller, customers’ needs are diverse
and changeable, enterprise and customers should be linked more closely. This require marketing
organization must touch customers closely, put customers at the core, provide custom-made
products and long-life services for customers, obtain benefits from the long-tern relationship with
customers.
2. Facilitate inter-departmental coordination and communication. The success of marketing depends
on the co-operation between all the departments. Each department should know they are one of the
part of marketing and build correct marketing concept by adjusting marketing organization to
realize effective marketing coordination and communication within enterprise.
3. With the full flexibility and agile reaction capability. For adapting to information economics,
knowledge economics and the rapid changes of market environments, enterprise’s marketing
organization must breakthrough the rigidity of traditional organization, and react quickly against
customers’ needs and market competition..
4. Facilitate creating competitive advantages. Under the fierce competitive environment, enterprise
must build and maintain a interests-shared and win-win relationship with customers. So marketing
organization must do its best to lower production cost and transaction fee constantly, and create
surplus values for customers, then make enterprise have more powerful competitive advantages.
3. The strategies of innovating enterprise’s marketing organization
The mode of present marketing organization has restricted the development of enterprise, in order
to prompt marketing capability, enterprises must innovate marketing organization to play the
capability of market perception, market correlation and strategic thinking completely. The innovation
of marketing organization is mainly comprised of the following aspects: marketing organization
concept innovation, marketing organization structure innovation, marketing organization process
innovation, marketing organization communication innovation and marketing performance
assessment innovation.
3.1 Marketing organization concept innovation
Marketing organization concept innovation can be thought as marketing organization border
innovation, which is in order to prompt marketing capability overall, to breakthrough the border of
marketing department, build market-oriented enterprise organization in which customers are the core
and marketing department is the link.
With the marketing activity getting more and more important in enterprise, the concept of
marketing organization changes, it mainly experienced the following main stages:
(1) Marketing organization is “sell department”. This is the junior form of marketing organization,
original sell department has few marketing functions, such as marketing research, advertising and
sales promotion [4]. In 1990’s some Chinese enterprises have this concept, they thought
strengthen the building of marketing organization is increasing sells person.
(2) Marketing organization is narrow marketing department. The feature of this marketing
organization is that in the enterprise organization system, marketing department is equal to sells
department, they can have one leader or have different leader in different enterprise.
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(3) Marketing organization = general marketing department = narrow marketing department + sells
department. “Marketing organization is all the jobs and structures involved marketing activities
in the enterprise [5].” General marketing department is enterprise’s “marketing corporation”
which is leaded by marketing vice general manager. The feature of this marketing organization is
the business philosophy of enterprise is marketing philosophy, sells department is just one of the
functional departments of marketing department, each functional marketing departments
coordinate closely.
(4) Marketing organization is all the enterprise organization, which is modern Marketing
Corporation. Philip Kotler pointed out: If a corporation has modern marketing department, it isn’t
modern Marketing Corporation. Whether a corporation can be called as modern Marketing
Corporation is determined by how all the staffs especially manager treat marketing function and
customers. Only when all the departments of the corporation know they work for customers, and
marketing is not just a name of a department, this corporation can be called as modern Marketing
Corporation.
The last stage is the highest developing stage of marketing organization, which has breakthrough
the concept of marketing department, and see marketing as the thing of all the enterprise. We can call
this organization as market-driven organization or customer-oriented organization, which is the
developing direction of marketing organization and enterprise organization.
3.2 Marketing organization structure innovation
In the changing market, marketing organization must touch market closely to obtain fleeting
opportunities. But nowadays most enterprises’ organization is set correspondent functional department
according to the traditional ways, which begins as R&D, ends as customers, in the middle is purchase
department, production department and marketing department. But marketing activities are not just
finished by marketing department. From the value chain process pointed out by Micker Boter, in order
to create the most value for customers, all the departments in the enterprise including purchase
department, production department, design department, marketing department, customer service
department and human resource department, finance department coordinate together. This need
enterprise must change its structure on three aspects: firstly, all the departments should build
customer-oriented concept to realize enterprise’s overall objectives. Secondly, break traditional
organization mode which set correspondent functional departments and contact one way. Now enterprise
must build circulating market-driven enterprise organization in which customers are not only the starting
but also the end, marketing department not only take part in but also coordinate all the marketing
process. See figure 3.1. Thirdly, reduce the levels of marketing organization and make it flat, and build
flexible marketing organization by building temporary and oriented by one task marketing team to
analyze and study the customers’ personality needs, so solve marketing problems by group and
coordination advantages to gain the competitive dominant position.
Customer
Marketing
R&D
purchasing
manufacturing
marketing
Figure 3.1 Circulating market-driven enterprise organization
3.3 Marketing organization process innovation
Business process reengineering has become an important job in the process of modern business
management. It is the necessary job for enterprise to adapt to new business environments and
information technology. In order to operate its marketing business network, Enterprise also need to
optimize and innovate marketing process guided by market demand and aimed at customers’ satisfaction.
The first step of innovating marketing process is to extract the key business, that is to rebuild and
rearrange the process of key business; the second step is to make clear the contents of every point of the
process, that is to position the function of every department in the business process. In the system of
working pushed by process, business process must can be checked or information can be communicated
in tow-way, so that the results of business process can be evaluated and transform to ensure the
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efficiency and quality of this business process. The innovation of marketing process guarantees the
marketing concept can be applied in realty.
3.4 Marketing organization communication innovation
In the market with rapidly changing environment, enterprises not only need to catch information
timely, but also should ensure that the information can be communicated timely and efficiently within
the enterprise. Enterprises should build marketing information system, develop information channels
overall, perfect the collection and collation of all kinds of marketing information, perfect the rules and
related ways of information management, and build completely electronic marketing information
management system, to realize that information can be communicated and shared adequately. Marketing
information system is the base of modern marketing management, is the platform and guaranty for
marketing organization to work effectively. In the meantime, in order to ensure marketing information
can be communicated and transformed adequately, enterprise should build flexible and flat marketing
organization to reduce the distortion and invalid of information.
3.5 Marketing organization performance assessment innovation
It is necessary for marketing organization’s effective operation to build a set of effective performance
assessment system which should be built according to the whole enterprise’s marketing. Because of the
particularity of marketing job, the basic point of marketing performance assessment is to create a fair
environment, everyone can compete fairly on the same plat and gain the fair return. In reality, this
equality must consider the difference of different marketing job’s nature and the balance of short-term
interests and long-term interests, and form a situation with competence and cooperation, to prompt the
marketing capability of all marketing organization.
4.Conclusion
It must depend on rational and scientific marketing organization to realize enterprise’s marketing
capability, so enterprise must build marketing organization which can adapt to environment and fit in
with enterprise’s developing strategy to prompt enterprise’s marketing capability. Traditional marketing
organization mode has not adapted to the present marketing environment, and become the barrier
prompt marketing capability, so marketing organization must be innovated. According to the nature of
present marketing environment, the key point of marketing organization innovation is marketing
organization concept innovation, marketing organization structure innovation, marketing organization
process innovation, marketing organization communication innovation and marketing performance
assessment innovation. Enterprise should build market-driven enterprise’s organization based on the
innovation of marketing organization to cultivate, maintain and renew enterprise’s sustainable
competitive advantage.
Reference
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[2] Philip Kotler, Marketing Management[M], Ninth Edition, Prentice-Hall International, Inc, 1997 P746
[3] George S. Day Market-driven organization[M] China Machine Press 2003.1.1st edition P10 (In Chinese)
[4] Philip Kotler, Marketing Management[M], Ninth Edition, Prentice-Hall International, Inc, 1997 P746
[5] GUO Guoqing Marketing management Theory and Model[M],China republic university press,1995.3,1st
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[6] David J.Collis and Cynthia Montgomery, "Competing on Resources: Strategy in the 1990's} Harvard Business
Review July-August 1995
[7] LIU Yanping Organization theory from different aspects[M] Beijing Jiaotong university press 2007 (In
Chinese)
The author can be contacted from e-mail: [email protected]
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