Evidence on the value of strategic planning in marketing: how much planning should a marketing planner plan?

What evidence exists on the value of formal planning for strategic decision-making in marketing? This paper reviews the evidence. This includes two tests of face validity. First, we use the market test: Are formal procedures used for marketing planning? Next, we examine expert prescriptions: What do they say is the best way to plan? More important than face validity, however, are tests of construct or predictive validity: What empirical evidence exists on the relative value of formal and informal approaches to marketing planning? The paper concludes with suggestions on the types of research that would be most useful for measuring the value of formal marketing planning. Before reviewing the evidence, we present a framework for the formal planning process. Disciplines Marketing Comments Postprint version. Published in H. Thomas and D. Gardner (eds.), Strategic Marketing and Management, John Wiley & Sons, Ltd, 1985, pages 73-87. The author has asserted his/her right to include this material in ScholarlyCommons@Penn. This book chapter is available at ScholarlyCommons: http://repository.upenn.edu/marketing_papers/21 Published in Strategic Marketing and Management, H. Thomas and D. Gardner (eds.), John Wiley & Sons, Ltd, 1985, pp. 73-87. Reprinted with permission. Evidence on the Value of Strategic Planning in Marketing: How Much Planning Should a Marketing Planner Plan? J. Scott Armstrong and David J. Reibstein Department of Marketing, Wharton School, University of Pennsylvania, Philadelphia, Pa. 19104 What evidence exists on the value of formal planning for strategic decision-making in marketing? This paper reviews the evidence. This includes two tests of face validity. First, we use the market test: Are formal procedures used for marketing planning? Next, we examine expert prescriptions: What do they say is the best way to plan? More important than face validity, however, are tests of construct or predictive validity: What empirical evidence exists on the relative value of formal and informal approaches to marketing planning? The paper concludes with suggestions on the types of research that would be most useful for measuring the value of formal marketing planning. Before reviewing the evidence, we present a framework for the formal planning process. The Formal Planning Process Although various formulations differ slightly, the basic framework for corporate strategic planning can be described by five steps: specify objectives, generate alternative strategies, evaluate strategies, monitor results, and seek commitment. Many corporate planners argue that each of these steps should be carried out in a formal manner (that is with operational guidelines and presumably with each step written out). The relationships among the various steps are shown in Figure 1. A detailed description of each of these steps is provided in Armstrong (1983). Figure 1. Formal strategic planning process