MARKET-MANAGEMENT ORGANIZATION

MARKET-MANAGEMENT ORGANIZATION


Canon sells fax machines to consumer, business, and government markets. Nippon Steel sells to the railroad, construction, and public utility industries. When customers fall into different user groups with distinct buying preferences and practices, a market-management organization is desirable. Market managers supervise several market-development managers, market specialists, or industry specialists and draw on functional services as needed. Market managers of important markets might even have functional specialists reporting to them. Market managers are staff (not line) people, with duties like those of product managers. They develop long-range and annual plans for their markets and are judged by their market’s growth and profitability. Because this system organizes marketing activity to meet the needs of distinct customer groups, it shares many advantages and disadvantages of product-management systems. Many companies are reorganizing along market lines and becoming market-centered organizations. Xerox converted from geographic selling to selling by industry, as did IBM and Hewlett-Packard. When a close relationship is advantageous, such as when customers have diverse and complex requirements and buy an integrated bundle of products and services, a customer-management organization, which deals with individual customers rather than the mass market or even market segments, should prevail. One study showed that companies organized by customer groups reported much higher accountability for the overall quality of relationships and employees’ freedom to take actions to satisfy individual customers.

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