Page 189 - DMGT547_INTERNATIONAL_MARKETING

International Marketing

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Belts and Hydraulic Hoses. As each of them reaches a threshold level of sales, it will be
spun off as a Strategic Business Unit (SBU). Each profit centre will have a CEO: Raj Chatterjee
will head Belts; Ashwin Kumar, Vice President (Manufacturing), will head Tools; and we
hired a new hand for the hydraulics business. The CEOs have total control over
manufacturing and marketing; only staff functions, like Finance and HR, will be looked
after by the corporate centre.”
“We’ve also decided to centralise sales. We don’t know how, but one option could be the
creation of a Central Sales Organisation (CSO) – a single entity that acts as the interface
between the profit centres and our customers. The more we think of it, the more the CSO
seems to be the solution to our problems. But is it? That is where I want your assistance.”
“Fascinating”, murmured Mullick, as he idly traced a pattern on his plate with a fork.
“What would you like me to do?”
“I’ve called a meeting of Pluto’s senior managers to discuss the advantages and the
disadvantages of a CSO. I’ve also invited one of our biggest dealers. I’d like you to attend
the meeting.”
Mullick, impressed with the mild-mannered CEO who was prepared to change even when
the going was good, agreed. Mission accomplished. Saraf left, promising to pick him up
the next morning at 9 sharp.
The meeting was held in Pluto’s modest boardroom in an unpretentious grey block in
Secunderabad, which hosted both its corporate headquarters as well as its largest
manufacturing facility. Everyone else had assembled by the time Mullick and Saraf walked
in. Mullick recognised some of them from his earlier chat: Chatterjee was a portly man
touching 50, and Kumar was a lean whippet-like individual of indeterminate age. Then
there were Anil Marwah, Head (Finance), and Prabhakar Das, Head (HR), both assembly-
line B-school offerings in their late 30s: clean-shaven, manicured, in white shirts and
khakis. Sunil Agrawal, a 35-something second-generation entrepreneur, who was the
managing partner of Agrawal Enterprises, Pluto’s largest dealer in west India, completed
the quorum.
Once everyone in the room had been acquainted with Mullick, Saraf started off by listing
the changes he wished to make in Pluto’s organisational structure, essentially a repeat of
the previous afternoon’s discussion with Mullick.
“What do you think, Dr Mullick?” he concluded.
“Profit-centres that will, eventually, become SBUs are a good idea. In fact, you may even
want to embed staff functions, like Finance and HR, in each SBU. But I think a lot depends
on how you manage your marketing-and-sales functions during the transition.”
Sunil Agrawal burst out: “Will I have to deal with three salesmen now? After all, I stock
Pluto’s entire range…”
Chatterjee had anticipated this question, and was ready with an answer. “The decision that
we have arrived at is to create a separate entity, responsible only for sales. We’re tentatively
calling this the Central Sales Organisation. Our entire sales-team will be transferred
to the CSO, which will sell products produced by all the three profit centres. Marketing
activities – like product-development, advertising and promotion, brand building and
resource-allocation – will continue to be the responsibility of the CEOs of the profit
centres. But the CSO will be headed by a CEO, who will be at par with them.”
Agrawal wasn’t convinced. “But why create a separate organisation for this purpose?
While some of your products are end-user specific, none of them are dealer-specific. I do
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