McDonald marketing planning Essay
McDonald marketing planning
The complexity of marketing planning means that when organizations embark on it, they should expect to encounter a number of organizational, attitudinal, process and cognitive problems (McDonald 2002). This essay is an attempt to outline some of those problems, however it is beyond this essay to clarify all possible barriers in implementing a marketing plan. After the potential barriers are of implementation are specified the essay will try and give possible solutions. The essay will first look at organizational constraints and then progress onto operational barriers.
It is not uncommon for marketing planners to experience difficulties in gaining wholehearted executive commitment for an ongoing programmed of, planning implementation and control. This is often due to a lack of evidence linking marketing planning to direct financial benefit. This problem is less prevalent in the other organisational disciplines of Management, Production, Finance and Human Resource. Although marketing describes itself as the key business discipline- and rightly so if properly applied-vested interests often prevail to obstruct its centrality (McDonald 2002). In practice the other strands are able to flex varying degrees of muscle with the result that is often marginalised. Part of the problem is that marketing is perceived as an abstract art form rather than a science. Although a new status- that of Chartered Marketer- has been accorded to qualifying members of the Chartered Institute of marketing (Ree.C. 2000), the level of public awareness is low.
A major cause for concern is that many organisations separate the three disciplines of business (production, HR, AND marketing). The problem with separating the three disciplines is that there will be a lack of participation of the key functions of the company. This is why a market-orientated approach is needed. As far back as the 1960’s Lear (1963) recognised the barriers involved and that, whilst marketing orientation was desirable from the point of view of customers, the efficiency based structure of most organisations limited what could be achieved. Morgan and Piercy (1991) cite lack of proper training as a major inhibitor of marketing orientation this in turn can lead to weak systems and therefore weak, poorly valued marketing. Marketing orientation is of course a cultural issue. Smircich (1983) sought to define organisational culture as “something, which may be influenced, changed and manipulated, and in turn influence, change and manipulate members and features of an organization”.
(Smircich 1983 p359)
In her article, Wilson (2000) quotes an assumption that “culture develops through problem solving within an organisation but suggests that the lack of clarity of definition leaves us with the conclusion that culture is formed from a variety of external manifestations (observed as behaviors and processes) backed up by belief systems. This complexity may be the main reason why culture moves slowly- it involves changing behaviors and shaking beliefs”.
(Wilson 1998 p3)
The slow acceptance of new cultural developments like market orientation and the convergence of departments could act as a barrier in the adoption and implementation of market planning techniques.
The design and implementation process of marketing planning can be subject to numerous amounts of possible problems. Many companies have now opted for formalized marketing procedures, McDonald states that “introduction of formalized marketing planning systems have serious organizational and behavioral implications for a company as it requires a change in its approach to managing its business.”
(McDonald, 2002, p79)
Unless businesses recognize these implications and seek ways of coping with these changes their planning could fail. This essay is now going to focus on possible operational barriers a business may face, when designing and implementing a marketing plan.
McDonald states, “A major cause of failure or partial failure of marketing planning systems is the belief that once a system is designed, it can be implemented immediately.”
(McDonald 2002 p82)
Businesses who subscribe to this view often fail to implement a timetable for their plans. This can cause them to not fully plan the planning process. The inadequate planning could cause ineffective plans as they are not tried and tested, it could also cause them not being communicated successfully. McDonald discuss how “planning the planning process above all gives a resolute sense of purpose, and dedication is required, tempered by patience and a willingness to appreciate the inevitable problems which will be encountered in its implementation”.
(McDonald 2002 p82)
Possible problems can occur in the presentation of the planning terms. Confusion between members of an organisation concerning the content of the marketing plan can be elevated due to perplex terminology and excessive amount of information and detail. Planners are usually highly skilled and use expressions, which can be perceived by operational managers as meaningless jargon (McDonald 2002). Elaborate systems can often be blamed for over planning. Over planning can create huge amount of data and information, which may not necessarily be needed. This can be de-motivating for all concerned and cause loss of focus to the main issues (McDonald 2002 p85).
McDonald writes about how the once a year ritual culture is one of the most common weaknesses in the marketing planning systems (McDonald 2002). Some Managers see the writing of a marketing plan as a troublesome activity, which is only completed to satisfy headquarters. This could lead to the plans being thrown aside and not properly completed or followed. McDonald states that “whilst this is obviously closely related to other explanations as to why some planning systems are ineffective, a common feature of companies that treat marketing planning as a once a year ritual is the short lead time given for the completion of the process, managers tend to relegate it to secondary importance.”
(McDonald 2002 p86)
Manager’s confusion over tactics and strategy form the foundations of why so many businesses become less profitable. McDonald articulates that “a tactical `plan covers in quite a lot of detail the actions to be taken, by whom, during a short term planning period. This is usually for one year or less. A strategic plan is a plan, which covers a period beyond the next fiscal year. Usually this is for between three and five years”.
(McDonald 2002 p31)
Previous decades have seen businesses using short-term tactical marketing. Many businesses used their short-term tactical strategies as a justification as to why they had been successful. McDonald is in disagreement with this and believes firms using these tactics were largely successful in the 1970s and 80s due to the simple environment and the easy marketability of products and services (MacDonald 2002). The increased complexity of today’s markets has meant that businesses need to have a more strategic and long-term approach. However McDonald explains that even when several businesses realize they need to take a more strategic approach they implement strategies, which are more sales forecasting and budgeting (McDonald 2002).
The reason for this misguidance is that managers can confuse operational planning and strategic planning; some even argue that the two are separate entities, whereas they are very much interlinked. The mistake made by many mangers is that the figures that appear in the long-term corporate plan are little more than statistical extrapolations that satisfy boards of directors (McDonald 2002). This common misdemeanor subjects the operational and the long-term plans to begum divorced from each other. The short-term plans become reactionary and the long-term plans lose their relevance and much needed cohesion and logic. McDonald explains, “This separation positively discourages operational managers from thinking strategically, with the result that detailed operational plans are created in a vacuum”.
(McDonald 2002 p88)
A real life example of a business separating tactics and long-term strategy was Ben and Jerry’s ice cream. Ben and Jerry’s had enjoyed good profitability until 1994 when their target market which consisted of exclusive high priced ice cream eaters shifted to more affordable ice cream. This lead Ben and Jerry’s to re-evaluate their once alluring pricing strategy and engage in a price war, which ultimately meant a loss of profitability. Ben and Jerry’s lost market share because they failed to change themselves and adapt to a new competitive environment because of organisational inertia. To overcome this Ben and jerry’s need to identify the changing tastes of consumers. To do this they need to develop a marketing plan, they showed no real evidence in doing this in the past. Ben and Jerry’s reliance on cause-generated marketing (short- term) had its benefits of adaptability, however long-term marketing planning has focus. (Gilbert.G. 2001)
The implementation of marketing planning is very reliant upon good information. Poor information can erect possible barriers in achieving business objectives. Piper and Smith conclude, “The basic logic of strategic planning is the production of a system which allows the matching of internal strengths with external opportunities whilst offsetting internal weaknesses and outside threats”.
(Piper and Smith 2002 p32)
The barrier to affectively achieving this is obtaining the right information Piper and Smith state that “poor information can be as damaging as ones made on intuition and past experience”
(Piper and Smith 2002,p32)
A classic example of businesses gathering insufficient information was coca-cola. In the late 70s and early 80s coca-cola’s research found out that the taste of their product was not recognized as superior to the other cola drinks. This led coca-cola to change the taste. In testing the new and improved flavor they used blind test research. The test concluded that a larger percentage of people choosing the new flavored coca-cola drink over any other drink. This led them to dramatically introduce the new flavor instead of the old one. Although initially this went well, people started to complain that Americas symbol and long-term friend had betrayed them. People started to stockpile the old coke and turn down the new flavor. Coca-cola received over 40,000 complaint letters and America even laid plans to file a class action lawsuit against coca-cola (Hartley 1998).
Obtaining adequate research information from audits is very problematic and expensive. Acquiring good information is often a barrier in the process of a good marketing plan.
Solutions on design and implementation barriers
Wicks writes an interesting article about how the marketing department within businesses must market themselves in order to gain good funding and support. Wicks argues that a too familiar story in business is that of marketing departments budgets being cut in poor times, which leaves a demoralized marketing team. To back this claim up a recent survey by the university of Warwick asked top managers if business was poor what would be the first thing cut. In number one spot came marketing with 23% (Wicks 2002). To solve this problem Wicks argued that a similar approach to that of focusing externally on customers must be adopted internally. The customer is senior management and the competition is other department’s who are also partners, as they may share some of the budget if done correctly (Wicks 2002). Wicks states “the next step is to sell the department and relate everything to the goals of senior management and keep things simple”.
(Wicks 2002 p4)
The convergence and inter department co-operation is largely a cultural thing. McDonald states “marketing is a management process whereby the resources of the whole organisation are utilized to satisfy the needs of selected customer groups in order to achieve the objectives of both parties. Marketing, then, is first and foremost an attitude of mind rather than a series of functional activities”.
(McDonald 2002 p565)
Rose (1990) proffered that success lies in engaging the employee with the goals of the Company… aligning the wishes, needs and aspirations of each individual who works for the organisation with the successful pursuit of its objectives. Hodgetts (2000) insist that companies seeking to survive in the `00s must create organisational design based on sharing authority, responsibility, and resources amongst people and divisions to achieve common goals. By this means, managers will be able to change their strategies, continually realigning their organisations with emerging opportunities, then articulating the new strategies so everyone knows what the organisation is about.
The convergence of departments and non-isolation of marketing is crucial in the co-operation in marketing planning, Organisational culture has a significant impact on if and how hierarchical change can be implemented. By centering an organisation on its knowledge, and allowing free flow of that knowledge, it is possible to break down these barriers (Cive. E.2000).
McDonald argues that one of the most debated issues in marketing planning today is where the responsibility for setting objectives and strategies should lie (McDonald 2002). What is not argued by McDonald is that short-tactics and long-term strategy should not be separated or misunderstood. McDonald believes that operational planning and strategic planning should be very much part of the same process, he states that “wherever possible they should be completed at the same, using the same managers and the same information process”.
(McDonald 2002 p88)
The strategic plan should be completed first and cover a period of between three and five years and when this is completed the operational and more detailed plan should be created (McDonald 2002). McDonald concludes, “Never write the one year plan first and extrapolate it”.
(McDonald 2002 p564)
The integration of tactics and strategy should stop the divergence of the short-term thrust of a business at the operational level from the long-term objectives of the enterprise (McDonald 2002). It should also prevent the preoccupation with short-term results at operational level, which according to McDonald makes a business less effective in the long run (McDonald 2002).
Once the planning system is designed and tested a major problem that has to be avoided is the excessive planning and detailed as mentioned earlier. McDonald maintains that in successful companies there is at all levels a wide spread understanding of the key objectives that have to be achieved and a means of achieving them. This cohesiveness is achieved by a means of layering. At each level management analysis is synthesized into a form that ensures that only the essential information needed for decision purposes reaches the next level (McDonald 2002). The presentation of strategic plans should be clear and concise. A good marketing plan should be no more than about a dozen PowerPoint slides that can be easily read, understood, and shared widely. It must support the overall business strategy and contain simple success metrics that link to the financial goals of senior management (Wicks 2002).
As mentioned earlier the acquisition of good and reliable data can prove to be a barrier in the implementation of a marketing plan. Poor information could render a marketing plan unsuccessful. Alice Clegg argues that researchers need to apply judgment and to have a broad base of knowledge and know how to integrate evidence successfully, from both qualitative and quantitative sources. McDonald argues that a company should have good sound information flow and scan the environment thoroughly. This could be done through adequate sources of information and internal databases of information. This should lead to more detailed forecasting and limited possible problems.
In concluding a business should strive for a culture, which embraces cross-departmental involvement in marketing. Marketing should be state of mind in every member of an organization. The marketing planning structure should be adequately planned and tested. A business should have a systematic procedure with a common format. The long-term strategic plan should cover between three and five years and be interlinked with the one-year operational plan. Within the plans a systematic system should be developed to prioritize objectives and interlinked them. The environment should be thoroughly scanned and information should be passed up the channels through a laying system, which only allow relevant information to be passed on.
Marketing planning is a series of activities concerning objectives, auditing, analysis and assumptions. The complexity of it renders it subject to possible problems and barriers. Organisational culture and management ignorance are major barriers in implementation of a marketing plan. Some organisation seem to not merit the possible benefits of strategic planning, they cut marketing budgets and isolate the department. Managers can confuse the short-term plans with the long-term plans. Short-term plans are often prepared first which regularly means they are reactionary and discourage managers thinking strategically.
Organisations should create a culture, which embraces marketing, it is, and should be a state of mind, with all departments involved. Organisations should develop the strategic long-term plan first and then create the short-term operational plans. The marketing planning process should be structured and planned extensively, with objectives listed in importance. Marketing planning and implementation face many barriers however following structured and planned models can avert and foresee potential problems.