THE GROWING COMPLEXITY OF A MRKETING PLAN
 

 

 

 

 

 

 

 

 

 

 

 

The development of marketing planning has paralleled the growing complexity of business organizations themselves. The first change to take place was the shift from functionally organized companies with relatively narrow product lines and servedmarket focus to large diversified firms serving multiple markets with multiple product lines. Such firms are usually divided into product or market divisions, divisions may be divided into departments, and these in turn are often further divided into product lines or market segments. As this change gradually took place over the last two decades, “sales planning” was gradually replaced by “marketing planning” in most of these organizations. Each product manager or market manager drew up a marketing plan for his product line or market segment. These were aggregated together into an overall divisional “marketing plan.” Divisional plans in turn were aggregated into the overall corporate plan. But a further important change is now taking place. There has been over the last decade a growing acceptance of the fact that individual units or subunits within a corporation, e.g., divisions, product departments, or even product lines or market segments, may play different roles in achieving overall corporate objectives. Not all units and subunits need to produce the same level of profitability; not all units and subunits have to contribute equally to cash flow objectives.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

This concept of the organization as a “portfolio” of units and subunits having different objectives is at the very root of contemporary approaches to strategic marketing planning. It is commonplace today to hear businesses defined as “cash cows,” “stars,” “question marks,” “dogs,” etc.* It is in sharp contrast to practice in the 1960s and earlier which emphasized primarily sales and earnings (or return on investment) as a major measure of performance. Although different divisions or departments were intuitively believed to have different capabilities to meet sales and earning goals, these differences were seldom made explicit. Instead, each unit was expected to “pull its weight” in the overall quest for growth and profits. With the recognition that organizational entities may differ in their objectives and roles, a new organizational concept has also emerged. This is the concept of a “busi- ness unit.” A business unit may be a division, a product department, or even a product line or major market, depending on the circumstances. It is, however, usually regarded by corporate management as a reasonably autonomous profit center. Usually it has its own “general manager” (even though he may not have that title, he has general managerial responsibilities). Often it has its own manufacturing, sales, research and development, and procurement functions although in some cases some of these may be shared with other businesses (e.g., pooled sales). A business unit usually has a clear market focus.