Friday, November 20, 2009

Informal marketing plans

Informal Marketing Plans
What is informal marketing planning?

Formal and informal approaches to marketing planning were investigated by Lyles (1993). This study found that neither had any relationship with business success. Over 60 studies into SME's were collated by Shrader et al (1989). Their conclusion was that there are some benefits to informal marketing planning, especially in smaller firms. The owner/manager tends to make business decisions based upon his or own experience and judgement. Once again there is disagreement regarding the link between such planning and decision-making in small businesses, with Robinson and Pearce (1993) finding that owners of small businesses did not link their decision-making process to formal planning. The formal nature of marketing planning is rejected by Piercy and Giles (1989).
There is recognition that the formal marketing planning process does not take into account the human realities of the planner. Marketing plans may in reality be driven from below by tactics rather than from above by strategies. These ideas are important since they not only see marketing planning taking place almost in reverse, but also because they offer informed criticism of the linear, formal planning process and begin to suggest that marketing planning in general is more informal than formal. It is also noticeable that Piercy and Giles (1989) do not see formal marketing planning as something adopted by large organisations with informal planning being practiced solely by small businesses or their owners. Informal marketing planning is also practiced by large organisations. Applying the same planning process to all organisations is like a doctor prescribing the same drug to all patients regardless of their ailment (McDonald 1986b). A series of criticisms of a written business plan were lodged by Monroy (1995).
A written business plan was rarely referred to after preparation, and there was little causality between business plan creation and business success. This view is supported by the earlier work of Bracker and Pearson (1986) in that the unstructured nature of planning was a process rather than a written document. If the process it not written and nor is it formal, what actually takes place? It is accepted that a written planning document is often the starting point (Kuratko 1995).
The shift from formal to informal marketing planning tends to see the marketing planning process as something that is not linear but as something influenced by the behaviour of the marketer. The linear approach to planning ignores the human and organisational factors that impact upon the marketing planning process. Many organisations could find difficulty in closing the gap between the theory and practice of marketing planning. The reason for this is that a logical model of marketing planning is being superimposed upon an organisation. It ignores the behavioural and experiential inputs that the manager himself brings to the planning process (Piercy and Giles 1989). From this behavioural perspective, the plan is not a written document (Monroy 1985). The most recent manifestation of the inadequacy of the current literature was expressed by Greenley, Hooley and Saunders (2004).
Their criticism has resonance since it is based upon their dissatisfaction with the current focus upon 'what' decisions should be made, rather than 'how' they are made. They suggest two models of marketing planning, and propose directions for new research. The first model is the 'direct effects' model, and the second is the 'moderator effects' model. Whilst the call for new research into the topic of marketing planning is welcomed, the nature of the two models is informal, but more importantly the value of the individual marketing manager is omitted. Neither model refers to human behaviour, individual learning or experience.