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Making Marketing Happen: How great companies make strategic marketing planning work for them MAMA: “fm” — 2005/6/3 — 16:13 — page i — #1 MAMA: “fm” — 2005/6/3 — 16:13 — page ii — #2 Making Marketing Happen: How great companies make strategic marketing planning work for them Dr Brian D. Smith AMSTERDAM•BOSTON(cid:127)HEIDELBERG(cid:127)LONDON(cid:127)NEWYORK(cid:127)OXFORD PARIS(cid:127)SANDIEGO(cid:127)SANFRANCISCO(cid:127)SINGAPORE(cid:127)SYDNEY(cid:127)TOKYO MAMA: “fm” — 2005/6/3 — 16:13 — page iii — #3 ElsevierButterworth-Heinemann LinacreHouse,JordanHill,OxfordOX28DP 30CorporateDrive,Burlington,MA01803 Firstpublished2005 Copyright©DrBrianSmith2005.Allrightsreserved TherightofDrBrianSmithtobeidentifiedastheauthorofthisworkhasbeenassertedin accordancewiththeCopyright,DesignsandPatentsAct1988 Thepublishersofthisbookconsiderthatitisaworthwhilecontributiontodiscussion, withoutnecessarilysharingtheviewsexpressed,whicharethoseoftheauthor. Noresponsibilityforlossoccasionedtoanypersonactingorrefrainingfromactionasaresult ofanymaterialinthispublicationcanbeacceptedbytheauthororpublishers. Nopartofthispublicationmaybereproducedinanymaterialform(includingphotocopying orstoringinanymediumbyelectronicmeansandwhetherornottransientlyorincidentally tosomeotheruseofthispublication)withoutpermissionofthecopyrightholderexceptin accordancewiththeprovisionsoftheCopyright,DesignsandPatentsAct1988orunderthe termsoflicenceissuedbytheCopyrightLicensingAgencyLtd,90TottenhamCourtRoad, London,EnglandW1T4LP.Applicationsforthecopyrightholder’swrittenpermissionto reproduceanypartofthispublicationshouldbeaddressedtothepublisher. PermissionsmaybesoughtdirectlyfromElsevierLtd,Oxford,UK:phone:(+44)(0)1865 843830;fax:(+44)(0)1865853333;e-mail:[email protected] yourrequeston-lineviatheElsevierSciencehomepage(www.elsevier.com),byselecting ‘CustomerSupport’andthen‘ObtainingPermissions.’ BritishLibraryCataloguinginPublicationData AcataloguerecordforthisbookisavailablefromtheBritishLibrary LibraryofCongressControlNumber:2005924634 AcataloguerecordforthisbookisavailablefromtheLibraryofCongress ISBN 0 7506 6248 4 ForinformationonallElsevierButterworth-Heinemannpublications visitourwebsiteathttp://books.elsevier.com TypesetbyNewgenImagingSystems(P)Ltd.,Chennai,India PrintedandboundinGreatBritain Working together to grow libraries in developing countries www.elsevier.com | www.bookaid.org | www.sabre.org MAMA: “fm” — 2005/6/3 — 16:13 — page iv — #4 For Lindsay,Eleanor and Catherine MAMA: “fm” — 2005/6/3 — 16:13 — page v — #5 Foreword IhadthegreatprivilegeofsupervisingBrianSmith’sdoctoralthesis onmarketingplanning. Hisfinishedworkwasoneofthemostout- standing theses I have come across in over a quarter of a century in academia. Butitdoesn’tendthere.Ihavebeenaseniormarketingpractitioner most of my working life and still work with the Boards of many of thebiggestandbestcompaniesintheworld.Inthiscapacity,itisrare tofindanyresearchemanatingfromabusinessschoolthatisdirectly applicable to and capable of being implemented by companies in a world which has become increasingly tough and more hostile since my days as Marketing Director of a fast moving consumer goods companyinthelateseventies. InmyviewBrianSmith’sworkonmarketingplanningsetsanew standard for research in business schools because, not only does it tackle head on the most difficult task in the domain of marketing, but it brings to it a refreshingly challenging, original and creative approach. Now Brian Smith has translated his work into this book in a way which will catch the imagination of all experienced marketers. For everyone touched by the problems and issues associated with strategy-making, this book is a MUST read. Not only is it intellec- tually challenging, but it is urbane, pragmatic and entertaining in a waywhichmostmarketingbooksfailtoachieve.BrianSmithisone ofanewbreedofmarketerswhoarecapableoforiginalthinking. Ihavereadandenjoyedeveryword.Ifyouwanttoimproveyour knowledgeandwisdomandhenceyoursuccessasamarketingprac- titioner, I beseech you to read and note carefully what Brian Smith hastosay.Yourabilitytoimplementallthatisbestinmarketingwill begreatlyenhanced. ProfessorMalcolmMcDonald CranfieldUniversitySchoolofManagement MAMA: “fm” — 2005/6/3 — 16:13 — page vi — #6 Contents Listoffigures x Listoftables xi Preface xiii Part1 Thefailureofstrategicmarketingplanning 1 1 Weknowwhatstrategicmarketingplanningis… 3 Introduction 3 Wheredidstrategicmarketingplanningcomefrom? 4 Howhasstrategicmarketingplanningdeveloped? 9 Whatisthecoreprocessofstrategicmarketingplanning? 17 Thetoolsofstrategicmarketingplanning 21 Weknowwhatstrategicmarketingplanningis 26 3 …Anditdoeswork 28 Introduction 28 Whatdowemeanby‘work’,exactly? 30 Doesresearchprovethatstrategicmarketing planningworks? 33 Soplanningworks 40 3 …Butmostofuscan’tuseit. 43 Introduction 43 Howmuchdoweusestrategicmarketingplanning? 44 Whyisn’tstrategicmarketingplanningusedmore? 55 Howdoesthatknowledgehelpus? 69 4 Pauseforthought–strategicmarketingplanning asafailedtechnology 72 MAMA: “fm” — 2005/6/3 — 16:13 — page vii — #7 viii Contents Part2 Whatgreatcompaniesdo 79 5 Weknowwhatastrongmarketingstrategylookslike 81 Introduction 81 Whatismarketingstrategy? 83 Whatdoesastrongmarketingstrategylooklike? 90 Usingstrategydiagnostics 121 6 Weknowthatrealcompaniesarenotentirelyrational 123 Introduction 123 Weakmarketingstrategiesaremorecommon thanstrong 125 Realcompaniesarerational,visionaryandincremental 133 Arainbowofstrategicmarketingplanning 141 Backtothemission 153 7 Weknowthatwhatworksiswhatfits 156 Introduction 156 Howdoorganizationswork? 158 Whatdoesbicongruencelooklike? 165 8 Howgreatcompaniesmakestrongmarketingstrategies 186 Introduction 186 Thestorysofar 187 Whatgoeswrong? 189 Whatgoesright? 194 Part3 Howyourcompanycanmakeastrong marketingstrategy 229 9 Understandingthemarket 231 Introduction 231 Whatweknowsofar 232 Marketunderstandingshouldnotbeconfusedwith marketaudit 233 Understandingmarketcomplexity 234 Understandingandevaluatingmarketturbulence 258 Combiningtheassessmentsofmarketcomplexityand marketturbulence 270 10 Choosingthebestwaytomakemarketingstrategyin yourmarket 272 Introduction 272 Mechanismsofmacrocongruence 274 MAMA: “fm” — 2005/6/3 — 16:13 — page viii — #8 Contents ix Thesevencoloursofstrategicmarketingplanningas managementactivity 282 Selectingacolourofstrategicmarketingplanningthat ismacrocongruenttoyourmarket 283 11 Adaptingyourorganizationalculturetosupportyour strategymaking 292 Introduction 292 Thechallengeofculturechange 293 Themechanismofinteractionbetweenorganizational cultureandstrategicmarketingplanning 296 Adaptingculturetoachievemicrocongruence 313 12 Makingmarketinghappen 335 Introduction 335 Theanswerisbicongruence 336 Implementationwisdom:Howpractitionersexecute thedifferentcoloursofstrategicmarketingplanning 337 Pre-flightchecks:Howpractitionerstesttheirstrategy beforetheyexecuteit 350 Journey’send 356 Afterword:acontinuingjourney 358 References 360 Index 371 MAMA: “fm” — 2005/6/3 — 16:13 — page ix — #9