The Marketing Book 5th Edition

High

formalization

High/medium

formalization

Low

formalization

High

formalization

Low

formalization

Medium

formalization

Medium

formalization

High/medium

formalization

Medium

formalization

Large Medium Small

Company size

Market/product diversity

High

Medium

Low

Complete marketing

planning

Bureaucratic Anarchy

planning

Apathy

+ + ■ ■

+ + + + ■ ■ ■ ■

2

1 3

4

Key

+ Degree of formalization

■ Degree of openness

98 The Marketing Book

4 Unless the chief executive understands and
takes an active role in strategic marketing
planning, it will never be an effective system.
5 A period of up to three years is necessary
(especially in large firms) for the successful
introduction of an effective strategic marketing
planning system.

Let us be dogmatic about requisite plan-
ning levels. First, in a large diversified group,
irrespective of such organizational issues, any-
thing other than a systematic approach approx-
imating to a formalized marketing planning
system is unlikely to enable the necessary
control to be exercised over the corporate
identity. Second, unnecessary planning, or
overplanning, could easily result from an
inadequate or indiscriminate consideration of
the real planning needs at the different levels in
the hierarchical chain. Third, as size and diver-
sity grow, so the degree of formalization of the
marketing planning process must also increase.
This can be simplified in the form of a matrix,
Figure 5.3.
It has been found that the degree of
formalization increases with the evolving size
and diversity of operations (see Figure 5.3).
However, while the degree of formalization

will change, the need for an effective marketing
planning system does not. The problems that
companies suffer, then, are a function of either
the degree to which they have a requisite
marketing planning system or the degree to
which the formalization of their system grows
with the situational complexities attendant
upon the size and diversity of operations.
Figure 5.4 shows four key outcomes that
marketing planning can evoke. It can be seen
that systems 1, 3 and 4 (i.e. where the individ-
ual is totally subordinate to a formalized
system, or where there is neither system nor
creativity), are less successful than system 2, in
which the individual is allowed to be entrepre-
neurial within a total system. System 2, then,
will be an effective marketing planning system,
but one in which the degree of formalization
will be a function of company size and
diversity.
One of the most encouraging findings to
emerge from research is that the theory of
marketing planning is universally applicable.
Figure 5.3 Planning formalization While the planning task is less complicated in

Figure 5.4 Four key outcomes