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Customer Departmentation-Organisation Structure And Design
Management Concepts & Organisational Behaviour - Organisation Structure And Design
Customer Departmentation-Organisation Structure And Design
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It is common that some organizations sell a wide variety of goods or services that appeal to different groups of customers, each of which has distinguished needs.
Customer
Departmentation
It is common that some organizations sell a wide variety of goods or services that appeal to different groups of customers, each of which has distinguished needs. Each customer group may have to be addressed differently. In such a case, departments may be created around customer groups. For instance, commercial banks organize their activities around customer groups to cater to their specific needs. As such, we find separate departments or divisions for agricultural, industrial and merchant banking operations. Similarly, we find an air-conditioning company like Blue Star organizing its business around domestic and industrial air-conditioning units.
-- Customer departmentation facilitates concentration on customer needs. This is in line with the customer orientation professed by many organizations these days;
-- Customers feel that they have an understanding supplier. For example, the manufacturer may sell to wholesalers and industrial buyers. Wholesaler requires a product of dependable quality with assured supplies. The industrial buyer wants products of high quality plus a service that includes installation and repair of the product and specific training of the company’s employees; and
-- Helps the organization to get the correct feel of the market dynamics in terms of preferences of the customers, degree of competition, competitors’ strategies, etc.
-- Difficult to coordinate operations between competing customer demands;
-- Requires considerable expertise on the part of managers in understanding customers’ problems and specific needs; and
-- There is a possibility of under utilization of facilities and employees specialized in terms of customer groups. Small organizations particularly cannot afford the expenditure involved because some amount of duplication of the facilities is inevitable.
It is common that some organizations sell a wide variety of goods or services that appeal to different groups of customers, each of which has distinguished needs. Each customer group may have to be addressed differently. In such a case, departments may be created around customer groups. For instance, commercial banks organize their activities around customer groups to cater to their specific needs. As such, we find separate departments or divisions for agricultural, industrial and merchant banking operations. Similarly, we find an air-conditioning company like Blue Star organizing its business around domestic and industrial air-conditioning units.
Advantages:
-- Customer departmentation facilitates concentration on customer needs. This is in line with the customer orientation professed by many organizations these days;
-- Customers feel that they have an understanding supplier. For example, the manufacturer may sell to wholesalers and industrial buyers. Wholesaler requires a product of dependable quality with assured supplies. The industrial buyer wants products of high quality plus a service that includes installation and repair of the product and specific training of the company’s employees; and
-- Helps the organization to get the correct feel of the market dynamics in terms of preferences of the customers, degree of competition, competitors’ strategies, etc.
Disadvantages:
-- Difficult to coordinate operations between competing customer demands;
-- Requires considerable expertise on the part of managers in understanding customers’ problems and specific needs; and
-- There is a possibility of under utilization of facilities and employees specialized in terms of customer groups. Small organizations particularly cannot afford the expenditure involved because some amount of duplication of the facilities is inevitable.
Tags : Management Concepts & Organisational Behaviour - Organisation Structure And Design
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