European Journal of Marketing

Marketing's Role in Strategic and Tactical Planning

Donald V. Shiner
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Donald V. Shiner, (1988),"Marketing's Role in Strategic and Tactical Planning", European Journal of
Marketing, Vol. 22 Iss 5 pp. 23 - 31
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 Strategic and
Marketing's Role in Strategic Tactical
Planning
and Tactical Planning
by
Donald V. Shiner 23
Department of Business Administration, Mount Saint Vincent University,
Halifax, Nova Scotia

Introduction
The existing confusion and imprecise definition of the concepts and
terminology of planning may, in part, be responsible for the difficulties
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being experienced in the business community in effective

implementation of marketing planning systems. The specific nature of
marketing strategy as distinct from marketing planning has been
emerging in the literature as a result of dissatisfaction with the
traditional limits of marketing theory. In an extensive audit of marketing
research over the past 25 years, Myers, Greyser and Massy[l] concluded
that most of the new ideas in marketing never reach line managers.
This dissatisfaction has generally been the result of a focus over the
past decade on the concepts of marketing strategy formulation and an
almost total neglect of the issues of implementation[2]. This article will
examine the nature of planning and its conduct at the strategic and
tactical level. The growing importance of strategic marketing is explored
and definitions of marketing planning at all levels developed.
The Nature of Planning
Planning can be seen in its broadest sense as the design of a desired future and
effective ways of bringing it about[3[, or, in a much more specific sense, as the
effort made by a planner to have a different system model from the previous one,
hopefully reducing uncertainties[4]. The difference between these two definitions
of planning is striking, if only for the range of activities encompassed in one and
excluded in the other.
Planning is a thought-action process. Simon[5] has shown that the solution of
any decision problem in business, science or art can be viewed as four steps,
with perception of decision need or opportunity as the first. Simon calls this the
intelligence phase. The individual then formulates alternative courses of action,
evaluates alternatives for their respective contributions, and chooses one or more
for implementation. Ackoff[3] described the nature of planning as a decision-making
process by making the point that it is special in three ways:
(1) Planning is something we do in advance of taking action, i.e. it is anticipatory
decision making.
(2) Planning is required when the future state that we desire involves a set
of interdependent decisions, i.e. a system of decisions.
 European (3) Planning is a process that is directed towards producing one or more future
Journal of states which are desired and which are not expected to occur unless
Marketing something is done.
22,5
The Benefits of Planning
24 The argument is then presented that we must have some way to prepare for the
future, and that planning reduces the risk of an unknown future by mapping out
a potential course of action. It follows therefore that planning is good, and the
proof is presented by telling you what planning does that is so good. One set of
points argues that planning forces a manager to think forward and this forward
thinking allows him/her to anticipate problems before they occur. Combined with
a detailed written forecast and plan, this forward thinking makes it easier to discover
what went wrong; and, having a structure, the manager then feels more confident
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to delegate tasks within the framework of the plan[6]. Similar points have been
expressed by Oxenfelt[7] when he described the benefits a firm can derive from
adopting the planning process as the co-ordination of the activities of many
individuals whose actions are interrelated over time, identification of expected
developments, preparedness to meet changes when they occur, minimisation of
non-rational responses to the unexpected, better communication among executives
and minimisation of conflicts among individuals which would result in a subordination
of the goals of the company for those of the individual.
These arguements on the "goodness" of planning have their origin in the words
of Peter Drucker[8]. He identified the changing environment in which the firm
exists and that this changing environment is related to "tomorow" — which always
arrives. Drucker's point is that if one has not looked at tomorrow, one is always
going to be surprised at what tomorrow brings, a risk that no business manager
can afford to take. Planning is thus presented as "natural", the only rational course
of action for a business which must, therefore, be undertaken.

The Costs of Planning

The range of discussion of the down-side of planning is limited in the literature.
In fact, if we refer to the review of planning literature by Matsuda and Hirano[4],
we find that only the work of Simon and March[9] evaluates the option of not
planning and its organisational costs. In trying to define the structure of planning
behaviour, Matsuda and Hirano categorised the costs of planning as:
• direct cost equal to the value of the resources marginally used up in the
planning process;
• committed cost represented by the actualfixedcost of the planning function;
• opportunity costs of missed chances because of the wrong decision being
made, and
• opportunity costs that are attributable to the process of planning.
These are unique in planning literature and are identified as:
• opportunities that may fade away if the planning process moves too slowly;
 • company confidential matters that may become exposed as the result of Strategic and
being considered in the planning process; Tactical
• the authority of the decision maker that may be undermined if the planning Planning
process results in antipathy, and
• unsatisfactory decisions taken as the result of planning that may damage
the decision maker's leadership ability. 25

The Confusion over Business Planning Theory

What then has placed the process of planning in business today in such a seeming
state of confusion with the lack of any integrating theory of application? After more
than 40 years of intense research into the human decision-making process, going
back to the early work of Simon[10] and the development of the concept of
"bounded rationality'', it is surprising that we know little of the planning process
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itself. This may help explain some evidence that business planning practices
frequently fail to achieve the results anticipated[ll]. It appears, then, that there
is not a clear understanding of how we should plan, despite all the literature that
argues that planning is good or necessary, and the question must be raised as
to what is missing from the past work on planning.
In their detailed review of the literature on planning, Matusda and Hirano[4]
evaluated 12 of the most frequently cited books on planning written over the past
25 years. They placed blame for the dissatisfaction and frustration with planning
mainly on the confusion about concepts and terminology used in this literature.
Most importantly, they concluded that, in most planning literature, the majority
of factors are prescribed either a priori or with, at best, only little evidence; the
things to be determined and the whole burden of implementing the results of
planning are conveniently left to an individual or an organisation's discretion.
In summary, we have the position that planning in some form will be conducted
by all humans in an attempt to reduce the uncertainty of the future and to outline
some path to reach that future. This process will take place in the business firm
with its associated costs and difficulties. The actual practice of planning at the
highest and lowest levels of the firm has not yet been adequately explained or
modelled. The resulting difficulty for business in implementing marketing planning,
as proposed in theories of strategic planning, strategic market planning and market-
ing planning, will now be examined.

Strategic Planning
The word strategic is derived from Greek (strategos, army; -ag, to lead). In Greece
itself, the term evolved from describing the role of a general, referring to the
skill of employing forces to overcome oppostion and of managing a unified system
of global governance[12]. This military meaning of the term has become blurred
with the application of strategy to business and futures research. Both of these
disciplines apply the term with some significant difference in meaning. In the futures
researchfield,strategy is viewed as the task of learning how to transform ourselves
as a collective society. As the result of his study comparing the core thoughts
behind the three very different concepts of strategy, Evered concluded that
 European the concept of corporate strategy is a mix of both military strategy and futures
Journal of research strategy.
Marketing
22,5 Strategic Planning in Business
In business, strategy is most often used to refer to planning of business activities
26 of a longer horizon; planning that is distinct from operational or day-to-day activity.
The range of views and terminology on business strategy is broad, and seems
to defy integration despite the focused attention of many writers. For example,
Hofer and SchendeL[13] compared the concepts of the strategy formultion process
as discussed by 13 authors, and concluded that business strategy writing to that
point had uncovered no universal principles or key linking thoughts.
Perhaps part of the difficulty in clarifying the concepts concerned with business
strategy arises from the early failure to recognise that strategy development and
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implementation are affected by two very different conditions within the firm. The
conditions have to do with the nature of the human variable in the decision-making
process. The hierarchical nature of decisions has been well documented, but less
well understood is the condition first put forward by Andrews[14] that strategy
formulation can be both deliberate and emergent. This condition contrasts a more
traditional view of corporate strategy as deliberate with company objectives,
purposes or goals, resource appraisal and plans.

Deliberate and Emergent Strategy

As researchers identified the nature of the planning process, it was convenient
to operate on the assumption that plans were the result of specific choices made
by individuals and agreed on within organisations. The organisations was viewed
as making only "purely deliberate" plans and strategies. The notion that a
continuum of strategies resulted from the interaction of people and events was
not considered. Emergent strategies have always existed, but were not incorporated
into the formal planning concept. These emergent strategies are the result of
patterns realised despite, or in the absence of, intentions. For example, a firm
may experience a shortage of raw material for a product and a competitor will
react to fill the gap, a purely emergent strategy.
At the extremes are "pure deliberate" and "pure emergent" strategies. A pure
deliberate strategy comes from precise intentions articulated so that desired
outcomes are clearly understood before actions are taken. These shared or common
strategies must be realised exactly as intended. In contrast, a "perfectly emergent
strategy" can only occur with consistency in action over time and the absence
of intention. Mintzberg and Waters[15] make the point that neither pure deliberate
or pure emergent strategies are likely to be found, but rather tendencies in one
direction or the other. Emergent strategies are more typical of organisations
characterised as "adhocracies" or project structures. These are typified by a
changing complex environment with unique products, the use of multidisciplinary
teams and project work using matrix structures. These adhocracies are dependent
on co-ordination rather than direct supervision, and have an uneven power diffusion
over various types of decisions [16,17].
 This concept of strategy as a mix of planned and emergent responses is congruent Strategic and
with Chandler's earlier vvork[18] that organisation and strategy evolve within the Tactical
firm, and reflects the thinking expressed by Rothschild[19] that the relationship Planning
between management inputs (actions and strategies) and company performance
forms a stochastic and not a deterministic system. In a deterministic system, specific
inputs (strategies) always lead to specific effects; in a stochastic system, on the
other hand, inputs do not uniquely determine outputs. In marketing, we have to 27
be content with stochastic systems because firms and their environments differ
so widely.
Strategy Hierarchy
With this sense of strategy evolving from a mix of deliberate and emergent
responses by the business firm, we have only examined one of the two conditions
that interact to create a discontinuity in our ability to derive a harmonious set
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of definitions of strategy. The second operant condition is the existence of a strategy

hierarchy. Spekman and Gronhaug[2] have described these levels of strategic
planning as:
• corporate-level strategies, that relate the firm to its environment on the
highest level and truly set the total business thrust of the corporation;
• business-level strategies, that focus on questions relevant to a particular
business among the many in the corporate portfolio, and seek to achieve
and hold a competitive advantage within a given business, and
• product/market-level strategies, that concentrate on the smallest unit of
relevance — the served market.
The final strategic choices that emerge from thefirmare the result of a cascading
set of decisions closely interrelated and dependent on each other, yet different
at each level because of the specific market inter-reactions planned for. At the
strategic level, decisions are concerned with the type of business, and whether
to hold, grow or divest[19]. Business-level decisions are more market focused,
with the issues of synergy, competitive advantage, product/market definition and
investment of main concern. At the product/market level, the focus is one of market
positioning, product positioning, market mix and timing.

Strategic Marketing
With this view of strategy as both emergent and hierarchical, one can understand
the difficulty often expressed by writers in developing a universal integrated strategy
definition. The task would be difficult because of the very nature of the strategy
process itself. However, understanding the evolving nature of strategy and the
need for different strategic actions at various levels in the firm gives one a basis
for definition and a framework for evaluating the critical influence marketing has
on the strategic planning process. Markets provide the environment that creates
much of the need for emergent strategy; the more turbulent the environment
and the more innovative the product, the greater the needforemergent strategies;
and markets dictate the content of the product/market level plan and define the
thrust of the business and strategic-level plans.
 European Marketing's Role in Strategy Formulation
Journal of One can clearly see a distinction emerging between business strategy, or strategy
Marketing as the term is most commonly applied to the businessfirm,and marketing strategy.
22,5 Business strategies define the direction of the firm as a whole and relate to the
core activities of the firm, while marketing strategies represent the translation
of the firm's overall direction into market-specific intentions. This view of the
28 importance of marketing in the formulation and implementation of strategy is
consistent with the recent work of several marketing theorists. Wind and
Robertson[20] argue that relevant marketing concepts and methods be utilised
for any strategic decision of thefirmand propose an integrated strategic decision
framework. Several authors have proposed the conceptual integration of corporate
and marketing strategy [21,22,23,24]. They have identified three key roles for
marketing in strategic planning, and theorised that these roles should lead marketing
to developing strategies that will best position the firm's offerings to attract buyers
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in the markets it intends to serve. The roles for marketing are: to determine optimal
long-term positioning desired in target markets, to develop strategies to capture
those positions, and to negotiate with top management and other functional areas
for support of marketing strategies.
Both the hierarchical and emergent concepts of the nature of strategy focus
on the market as the beginning point for strategy evolution. It is the very nature
of these markets and the firm's response at various levels that determine the
firm's total strategy. Thus we wouldfindlong-range plans being made for products
that are integrated into the next level's plans, while the product-level plans
themselves could be in a state of change as they moved from emergent to deliberate.
The success of any strategy chosen must, in turn, be measured by the market's
response to that strategy. This idea was expressed by Wind and Robertson[20]:
Sound business strategy should have a marketing perspective, i.e. marketing should
provide inputs to strategy generation and the evolved strategies should be tested against
the reaction of customers, competitors, and other stakeholders (p. 12).
With the acceptance of the concept of a hierarchy of strategies, we then clearly
place each level of strategy in relation to the market level of the response:
• the firm as a whole, whether to grow or divest = strategy;
• the SBU or market-level decisions = marketing strategy, and
• the product/target-market level = marketing tactics.
Each of these activities is a form of planning and subject to the managerial difficulties
of control and implementation, and constrained by the interference of day-to-day
realities. Berman and Evans[25] make an even clearer distinction. They postulate
that strategic planning, with its broader perspective of the company as a whole,
integrates the two activities of corporate planning and marketing planning.
It is becoming clearer, then, that the traditional focus on strategy that tended
to separate the conduct of corporate strategic planning from the lower levels of
planning is falling away, and an integrated model of planning relating the firm as
 a whole to the sub-strategies of the parts is emerging. Marketing plays a key role Strategic and
in this process, because of its market and customer focus, and the integration Tactical
of market-related details forms the substance of the marketing planning process. Planning
Marketing Strategy Components
What then is a marketing strategy, and how does the firm arrive at the point where
it can establish the difference between marketing tactics and strategy? In a detailed 29
review of the concept of marketing strategy, Greenley[26] set out a schema of
three planning levels: level one provides the broad definition of the business in
terms of customers, products and business areas; level two is the established
corporate strategy with product-market, growth-vector, competitive advantage,
and synergy components (as first oulined by Ansoff[27] in 1965), and level three
is the actual marketing strategy.
Greenley defines this marketing strategy as being composed of five elements:
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market positioning, product positioning, marketing mix, market entry and timing,
and states that it is their enduring nature that sets them apart as strategy rather
than tactics. This definition is based on thatfirstused by Kotler[28], who defined
marketing strategy as having five components: market segmentation, market
positioning, market entry strategy, market-mix strategy and timing strategy.
However, in later writing[29], this broad statement of marketing strategy was refined
to narrower terms by reducing the definition of the components of marketing
strategy to three: namely, target markets, the marketing mix and marketing
expenditure levels, and focused on the idea that a marketing strategy is the
fundamental marketing logic by which the business unit intends to achieve its
marketing objectives.
Other writers typically take a narrower view of marketing strategy. For example,
Davis[30] in the latest edition of his 1961 text, Market Management, limits his
definition of marketing strategy to the elements of target markets and the market
mix, while Mentzer and Schwartz[31] use even narrower terms by defining
marketing strategy as the setting of marketing objectives and strategies within
the guidelines of corporate strategies. However, even in the narrower frameworks,
the authors typically include, as part of the market mix or target market variables,
all the elements discussed by Kotler.
While Greenley[26] viewed the enduring nature of the decisions made as the
critical factor differentiating marketing strategy from marketing tactics, most authors
have focused on the time frame in which decisions are made and evaluated as
being the most significant underlying difference. The most typical analogy is to
the military and the difference between the timing of military strategy and military
tactics[32,33]. Kotler[28] does not state explicitly what he felt differentiated his
division of marketing strategy from that of marketing planning, but emphasises
the importance of timing throughout his discussion of the topic.

Strategic Marketing and Marketing Management

Strategic marketing, then, can be considered as the strategy-level integration of
the marketing planning function with the firm's strategic plans. It forms the major
 European element of marketing management in the assembly of the firm's overall marketing
Journal of position. Kotler and McDougal[28] define marketing management as:
Marketing the anaysis, planning, implementation, and control of programs designed to create, build,
22,5 and maintain mutually beneficial exchanges and relationships with target markets for
the purpose of achieving organizational objectives (p. 13).
30 This definition is similar to most found in marketing writing on marketing
management. Other writers typically define marketing management by focusing
on the meaning of the two terms: marketing and management. They define
marketing by referring to the marketing concept and its philosophy of business
that states that the customers' want satisfaction is the economic and social justi-
fication for a firm's existence, while management is defined to include the usual
three management functions: namely, planning, implementing and evaluating[34].
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Conclusion
Marketing planning can be difined as the conduct of all activities related to the
planning of every aspect of a firm's relationship with its markets at all levels of
the corporate hierarchy. It has a strategic and tactical component. Marketing
management is the way a marketer carries out the functions and tasks of the
marketing needs of a firm. Because of the hierarchical nature of business decisions,
marketing input should form the starting point for strategy evolution.
The conduct of marketing planning, both at the strategic and tactical levels, begins
with the market served. It is the constantly changing dynamics of the customer
and market that require a delicate balance of deliberate and emergent planning.
The marketing planning process must assess the fundamental nature of this
customer/market and ensure the business firm adopts a marketing planning
approach which allows the level of flexible response market conditions dictate.
Marketers themselves must be more precise with their use of terminology, being
careful to identify exactly what they mean when using the terms planning, marketing
and strategy, particularly as a word group expressing a relationship of place, time,
circumstance and degree. Empirical research into the conduct and integration of
strategic and tactical marketing planning is needed to overcome the difficulties
in implementing a complex planning process that is constantly under pressure
of change.

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