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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. 1102 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 1103 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. 1104 (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 1105 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 , , [1] ZHANG ShanXuan, Research on business marketing organization[D] Chinese Academy of Social Sciences 2001.4 P20 (In Chinese) [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 edition P48l, (In Chinese) [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] , , , , — , , , , 1106 , , , , ,