Geographic Organization

A company selling in a national market often organizes its sales force (and sometimes other functions, including marketing) along geographic lines. The national sales manager may supervise four regional sales managers, who each supervise six zone managers, who in turn supervise eight district sales managers, who supervise ten salespeople.

Several companies are now adding area market specialists (regional or local marketing managers) to support the sales efforts in high-volume, distinctive markets. One such market might be Miami, where 46 percent of the households are Latino, compared to neighboring Fort Lauderdale, where 6.7 percent of the households are Latino. The Miami specialist would know Miami's customer and trade makeup, help marketing managers at headquarters adjust their marketing mix for Miami, and prepare local annual and long-range plans for selling all the company's products in Miami.

Several factors have fueled the move toward regionalization and localization. The U.S. mass market has slowly subdivided into a profusion of minimarkets along demographic lines: baby boomers, senior citizens, African Americans, single mothers— the list goes on.3 Improved information and marketing research technologies have also spurred regionalization. Data from retail-store scanners allow instant tracking of product sales, helping companies pinpoint local problems and opportunities. Retailers themselves strongly prefer local programs aimed at consumers in their cities and neighborhoods. To keep retailers happy, manufacturers now create more local marketing plans.

■ Ca Campbell has created many successful regional brands. It É

sells its spicy Ranchero beans in the Southwest, Creole soup in the South, and red bean soup in Latino areas. Brands appealing to regional tastes add substantially to Campbell's annual sales. In addition, Campbell has divided its domestic market into 22 regions, each responsible for planning local programs. The company has allocated 15 to 20 percent of its total marketing budget to support local marketing. Within each region, Campbell's sales managers and salespeople create advertising and promotions geared to local needs and conditions.

Adaptation to regional differences is carried out in Campbell's international marketing as well. A kitchen opened in Hong Kong in 1991 develops recipes for the Asian market, and soups marketed in Latin America feature spicy flavors. Packaging and advertising are also geared to regional and national differences. For example, cans are avoided in Japan, where many shoppers carry their groceries on foot. In Mexico, large cans are popular because families tend to be large. In Poland, where consumption of soup is high and most of it is homemade, Campbell Soup appeals to working mothers by offering eight varieties of condensed tripe soup that can be prepared quickly and easily.4

FIGURE

(c) Stage 3: Separate Marketing Department

President vn

Sales VP

Sales force

Marketing VP

Other marketing functions

(d) Stages 4 and 5: Modern/Effective Marketing Company

President

Executive VP of Marketing and Sales niz

Executive VP of Marketing and Sales niz

(e) Stage 6: Process- and Outcome-Based Company

(e) Stage 6: Process- and Outcome-Based Company

chapter 22

Managing the Total Marketing Effort

Other companies that have shifted to regional marketing are McDonald's, which now spends about 50 percent of its total advertising budget regionally; American Airlines, which realized that the travel needs of Chicagoans and southwesterners are very different during the winter months; and Anheuser-Busch, which has subdivided its regional markets into ethnic and demographic segments, with different ad campaigns for each.

Regionalization may be accompanied by a move toward branchising. Branchising means empowering the company's districts or local offices to operate more like franchises. IBM told its branch managers to "make it your business." The branches resemble profit centers and local managers have more strategy latitude and incentive.

Regionalization is also being adopted by multinationals operating across the globe. Quaker Oats has set up a European headquarters in Brussels, and British Petroleum has chosen Singapore for managing its operations in Asia and the Middle East.5 Citibank has also innovated here:

■ C a As a global bank, Citibank has had to figure out how to service its major global accounts in different parts of the world. Its solution: A parent account manager (PAM) is appointed for each global account and sits in the company's New York headquarters. Each PAM has built a network of field account managers (FAMs) in the various countries and calls upon them when the specific account needs service.

Continue reading here: Product or Brand Management Organization

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