PRODUCT ORGANIZATIONAL

STRUCTURE AND MARKET

CENTERED ORGANIZATIONAL
STRUCTURE

Prepared by:
Camille Angela D. Deona
 PRODUCT ORGANIZATIONAL STRUCTURE

 Organizational divisions follow a product structure. In

some companies, the sub-businesses are assigned to
product group managers, each of them are given key
operating and staff functions.

 When different types of products are involved, divisions

are likely to include research and development and
engineering departments. These allow managers to operate
independently.

 Marketing managers follow their products from conception

to the time when it is made available to the consumers.
They coordinate all information relating to the products
with the other departments in the company. Marketing
managers are likewise involved in various company
operations.
 EXAMPLE OF PRODUCT ORGANIZATIONAL STRUCTURE

For example, an executive over Kraft products would be responsible for every product under that label
dressings, meats, sauces, etc.
 4 courses of action that an organization can implement to
improve or replace any product management structure.

1. Conducting training programs in forecasting, interpersonal skills, planning,

motivation, and control to improve the ability of product managers to do the
job.
2. Switching from a marketing manager to a marketing team that implements
activities to market the product effectively.
3. Eliminating product managers of minor brands and consolidating them with
other products. This is feasible when the product line appeals to similar
consumers or industrial users and;
4. Establishing divisions around the major company products and using functional
structural arrangements within divisions. Despite the problems involved in the
product structure, this organizational form can be successful.
 PRODUCT ORGANIZATIONAL STRUCTURE

Advantages Disadvantages

 Focus on specific market segments.   duplicating functions and resources, eg a

 meet customer needs more effectively.  different sales team for each division
 extend knowledge or expertise within  dispersing technical expertise across
specialized divisions.  smaller units
 respond to market changes more flexibly  nurturing negative rivalries among
and quickly. divisions
 encourage positive competition between  over-emphazising divisional, rather than
each department organizational goals
 coordinate and measure the performance  losing central control over each separate
of each division directly division
 MARKET-CENTERED ORGANIZATIONAL STRUCTURE

 A market-centered organizational structure describes the wide range of structural

forms that center on a group of customer needs rather than a region, product line, or
function. A market-centered organization is decentralized by market.
 A market center is a profit center.
 A market-centered organizational structure groups company activities around
important and relevant criteria and forms SBUs that will formulate marketing
strategies, among others. Each unit is responsible for profits.
 In many cases, large divisions have their own marketing departments.
 Division marketing may also be structured by product, customer, or any
combination of these factors. Often, a new division starts with a functional
organization, but changes to one that is structured by product, customer, or market
as the business increases.
Example of Marketing Centered Organizational Structure
 Different situation in Organizations that are suited for the Market-
Centered Structure.

 When a competitor threatens market leadership, market centering can restore a competitive advantage
by improving knowledge on customer, distributor, and retailer needs.
 When a new product is introduced and is affecting a company to a certain external, a market-centered
approach can stimulate new ideas because the firm’s technical specialists receive more information
about market needs.
 When a product manufacturer can achieve high profit by diversifying into services with larger
margins of returns.
 When marketing-related products or services requires the so called marketing intelligence by
conducting or implementing smart customer strategies.
 When a manufacturer who has been selling product-performance benefits shifts marketing strategies
to feature the financial benefits of customer profit improvement, market centering makes it easier to
gather information on how customers make their profits.
 When a marketer wants to attract more entrepreneurial manager, market-centering offers managers
wide responsibilities and a variety of supervisory duties.
 Market Centered Organizational Structure

ADVANTAGES DISADVANTAGES

 Complicates coordination
 Develops expertise in handling their
 Customers can overlap.
type of customer
 Department units focus on their goals
 Can encourage healthy competition
instead of organization goals
among departments
 Flexible
Thank you!