Problems in Making Planning Work

  

Date Posted: 11/6/2012 9:00:35 AM

Posted By: sashoo  Membership Level: Silver  Total Points: 382

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Empirical work into the marketing planning practices of commercial organizations has found that most companies did not practice the kinds of systematic planning procedures and, of those that did, many did not enjoy the rewards. However, others have shown that there is a relationship between planning and commercial success. The problem is that the contextual difficulties associated with the process of marketing planning are substantial and need to be understood. In as much as forewarned is forearmed, the following is a checklist of potential problems that have to be face by those charged with making marketing planning work.

• Political

Marketing planning is a resource allocation process. The outcome of the process is an allocation of more funds to some products and departments, the same or less to others. Since power bases, career opportunities and salaries are often tied to whether an area is fast or slow growing, it is not surprising that managers view planning as a highly political activity. An example is a European bank, whose planning process resulted in the decision to insist that its retail branch managers divert certain types of loan application to the industrial/merchant banking arm of the group where the return was greater. This was required because the plan was designed to optimize the return to the group as a whole. However, the consequence was considerable friction between the divisions concerned because the decision lowered the performance of the retail branch.

• Opportunity Cost

Some busy managers view marketing planning as a time-wasting ritual that conflicts with the need to deal with day-to-day problems. They view the opportunity cost of spending two or three days away at a hotel thrashing out long-term plans as too high. This difficulty may be compounded by the fact that people who are attracted to the hectic pace of managerial life may be the

types who prefer to live that way. Hence they may be ill at ease with the thought of a long period of sedate contemplation.

• Reward Systems

The reward systems of many businesses are geared to the short term. Incentives and bonuses may be linked to quarterly or annual results. Managers may thus overweight short-term issues and underweight medium- and long-term concerns if there is a conflict of time. Thus marketing planning may be viewed as of secondary importance.

• Information

To function effectively as systematic marketing planning system needs informational inputs. Market share, size and growth rates are basic inputs into the marketing audit but may be unavailable. More perversely, information may be willfully withheld by vested interests who, recognizing that knowledge is power, distort the true situation to protect their position in the planning process.

• Culture

The establishment of a systematic marketing planning process may be at variance with the culture of the organization. As has already been stated, businesses may ‘plan’ by making incremental decisions. Hence the strategic planning system may challenge the status quo and be seen as a threat. In other cases, the values and beliefs of some managers may be hostile to a planning system altogether.

• Personalities

Marketing planning usually involves a discussion between managers about the strategic choices facing the business and the likely outcomes. This can be a highly charged affair where personality clashes and pent-up antagonisms can surface. The result can be that the process degenerates into abusive argument and sets up deep chasms within the management team.

• Lack Of Knowledge And Skills

Another problem that can arise when setting up a marketing planning system is that the management team does not have the knowledge and skills to perform the tasks adequately. Basic marketing knowledge about market segmentation, competitive advantage and the nature of strategic objectives may be lacking. Similarly, skills in analyzing competitive situations and defining core strategies may be inadequate.

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