Marketing Planning and Performance

Will marketing planning improve performance?

Marketing as a discipline is not a precise science. However, the area of marketing planning does have its own theory, the validity of which is open to some criticism. The theory of marketing planning contends that a formalized marketing planning system will help a company to improve its performance (McDonald 1982). In other words a formal, systematic process of marketing planning assists an organization to improve business performance.

Nevertheless business success must be achievable in the absence of a written marketing plan since business success existed before written marketing plans. The level of formal or informal marketing planning, and whether or not a written document is evidence of marketing planning is returned to later in this chapter and on occasions throughout this thesis. Morgan et al (2000) found that the marketing dimension of a business benefited high business performance firms over low business performance firms. Here, firms were medium and large. No relationship between planning and business performance was found by Schwenk and Shrader (1993), and a nil or negative effect was found by Hayes (1985) and Kallman and Shapiro (1978). So the assertion that marketing planning and business success are related is open to some criticism. Marketing planning leads to business success for some organizations, may not in others, and may even have a negative effect on business success for others.

This is achieved by a ‘systematization’ of the process of marketing planning. It is this systematization that is core to the theory. The relationship between planning (i.e. planning in a general sense) and organizational performance has been the topic of much research. As with research into company size there is much dissimilarity between the subject matter of each study.

Firms employing formal marketing planning processes outperformed those that did not (Capon et al 1983). A positive relationship between marketing planning and business success was the finding of Baker (1983). The same positive relationship was found by Ogunmokum (1990) and Robinson and Pearce (1984) in small businesses. However untenable assumptions were made in these studies (Hannon and Atherton 1998). They consider the production of a paper-based marketing plan conclusive evidence that marketing planning has actually taken place. A written marketing plan is evidence of formal marketing planning. However, it may not necessarily follow that that producing a written document means business success. An assumption is made that implies that if no written marketing plan exists, then marketing planning does not take place.