In an age of agile, where companies adopt an iterative approach to managing projects, do we still need strategic marketing planning?
In this article, based on a webinar hosted by Professor Vasilis Theoharakis for the Cranfield Strategic Marketing Forum, we delve into the nature of plans and planning to see how organisations can manage in an ever-changing world.
In the past, as marketers we might have spent six months creating a marketing plan for the next 5 - 10 years and then stuck to it. The plan mapped out what we sold, where it was sold, what we charged and our promotional methods. It was a beautifully presented document with many pages that was printed, bound and shared with senior managers and those who worked in marketing. Often junior staff didn’t get access to the document as it was considered commercially sensitive.
Today’s business landscape is more dynamic. We're in a world of constant change and uncertainty, where competitors enter our markets from many locations, dynamic pricing changes how goods are sold, and at the click of a mouse we can launch or pause a new campaign via social media.
While traditional marketing plans help our understanding of our market and our wider environment, our approach today now needs to be agile.
Overview of agile
Agile is being more responsive¹ and adapting quickly to the environment. If the market is changing and you ignore it, you may be left behind!
The concept of agile first appeared in the 1990s in the IT software community. Summarised in the Agile Manifesto² which set out its core principles, agile focused on satisfying customers when delivering software. At the time, with many epic software failures, agile was a solution to ensure the right software was delivered at the right time.
Consider a more contemporary example of the importance of agile. London hackney carriages (the famous black cabs) offer a long-established service in a highly regulated market that’s tough to enter. You need to buy your vehicle, but more importantly you must pass the infamous test, ‘The Knowledge’, to demonstrate your prowess in navigating the capital city.
In 2012 Uber arrived in London, offering travellers an option to find a cab on an app and utilising satellite navigation instead of expecting drivers to have detailed local knowledge of London’s streets. Uber created a different market that used technology rather than capability.
London hackney carriages were aware of Uber but ignored them as they didn’t consider them a competitor. But as the environment changed and Uber gained more market share, London black cabs resorted to legal action. Today, Uber still operates in London alongside the black cabs that continue to rely on the “pavement hailing” approach. But perhaps if the black cabs had embraced the new app technology – being agile and adapting to the changing world - instead of sticking to their traditional approach, they would now be in a stronger position³.
How does agile relate to marketing?
Although it started in project management, agile is now found in marketing and across many other functions and departments in modern business.
An agile approach frequently involves pooling the wisdom of smaller, cross-functional teams and giving them the ability - or permission - to work faster and with greater autonomy.
The traditional marketing plan has evolved, and even the way we gather data has changed. Gone are the days when you had to visit a business library to review directories to learn which companies were operating in which territories. The need to visit exhibitions is also diminishing as we discover and research new products online rather than at the annual trade show.
Our 5-year marketing plan today may be a series of spreadsheets, presentations and pages, many of them working documents that are updated in real-time and available to a range of people. Perhaps it’s a cloud-based folder with guidelines on pricing, product strategy, promotional focus and distribution values.
As a result, we now work in a much more agile way. We have instant access to competitor information and can often assess which products are successful within hours of launch. We can watch product sales increasing (or not), monitor email open rates and website visits, and track social media sentiment in real-time. We can easily switch on and off our digital promotions, and quickly adapt them to changes in the market.
So why do marketing plans still matter?
Adapting to new conditions
The process of marketing planning provides a structure for gathering information, assessing the data and making informed decisions. It allows us to critically analyse what really matters. This structure enables marketers to become agile and helps us to build capability.
Capability is the skills, knowledge and behaviours which the organisation can draw on to assess and analyse its markets and to build a future for the business. Once an organisation has the necessary capabilities it’s much easier to pivot when a challenge occurs.
The electric vehicles market offers an interesting case study.
Like all established car manufacturers, Volkswagen has had to adapt its legacy diesel and petrol business to offer electric vehicles (EVs). In 2020, Volkswagen’s CEO Herbert Diess stated he did not wish to ‘end up like Nokia’⁴ and committed to changing the business by adding the capabilities required to become an electric-first car company. Importantly Diess wasn’t just creating a plan, he was building the capabilities to deliver the plan.
Part of this plan has involved building a new management team to develop the batteries, as Diess says: "We have set up one of the most competent battery teams in the world and are therefore at the forefront of the competition. Volkswagen has the size and clout to secure the ramp-up of its e-mobility strategy with its own battery roadmap.”⁵
This comment uses agile language and illustrates that Volkswagen formed a smaller team – a separate company with a group of engineers at the forefront – to facilitate a key factor in their move to become electric, i.e. batteries. They recognised that they did not possess the capabilities in the existing team to plan for the future. While this is unlikely to have been in their original master plan, it is a critical aspect of ongoing planning and reflects the company’s desire to reconfigure itself and to adopt an agile approach.
But is it a bit too little too late?
Shaping the market
At the other end of the spectrum is Tesla.
Back in August 2006 Elon Musk shared The Secret Tesla Motors Master Plan (just between you and me)⁶ which stated their ambition to manufacture affordable electric cars. Following this, Tesla focused on building factories faster and with less investment, in order to make affordable vehicles.
Fast forward to 2020 when Tesla held their first Battery Day event and reported that they had delivered over 1 million electric vehicles and over 26 billion electric miles had been driven with their vehicles. Then in 2022 threw a huge, celebrity-style party to celebrate the opening of the new Gigafactory in Texas⁷. These activities illustrate that Tesla recognised how important the battery technology was to electric vehicles early on and focused their efforts on this essential technology.
By contrast Volkswagen, a long-established auto manufacturer with long-term strategic plans, took over 15 years to start the same conversation about batteries.
While they may have existed since 2003, Tesla has successfully positioned its brand as the market leader. In doing so they managed to surprise many leading Japanese car manufacturers. This was a shock for the Japanese auto market, it was as if they were asleep and failed to see the changes taking place that moved from leader to follower in a matter of years. Like the London cabs, Japanese manufacturers were sticking to their traditional approach, the traditional plan and failed to respond to market changes.
Respond and Change
While the process is contextual and depends on who and where you are, both Volkswagen and Tesla need to plan for the future.
Elon Musk may appear to be leading the charge at Tesla, partly because he has successfully surrounded himself with a well-selected board including world-class finance specialists, experienced tech firm executives and media mogul James Murdoch. These board members are not classically trained engineers, but do have access to technology, money and media, enabling Tesla to respond faster to changing markets.
Meanwhile VW recently had to admit to unethical behaviour in their violation of the Clean Air Acts in the USA. Perhaps this took their focus away from their core business? In trying to resolve internal issues, they failed to see the changes taking place in the market and were stuck in the traditional mode of operation, unable to respond swiftly to market needs.
Plans and planning
So where does this leave our strategic marketing plans?
It’s often not the plan, but the planning that’s critical.
The planning process builds capability, identifies what’s needed and where weaknesses need to be addressed. A five-year plan soon becomes out of date and needs to pivot from a static to a dynamic state.
In the same way that building a website is no longer a process with a final outcome but an ongoing adaption based on the analytics, marketing planning needs to become more agile, to involve wider teams and to ensure the entire board understands its importance.
What can organisations do in this fast-changing world to address strategic marketing planning?
Approaches may differ depending on the sector, size and type of organisation, yet businesses need to manage the paradox of developing their marketing planning capabilities while concurrently transforming their business.
Strategic marketing planning is essential, but the focus needs to be on the process and not on the document.
Businesses may consider the following:
- Review recent plans and evaluate them against the external market to see if the main issues are still valid.
- Look out for points of weakness and blind spots in the plans.
- Look out for opportunities that could be unlocked using the organisation’s capabilities.
- Be prepared to adapt your plans, knowing they will need to pivot and change.
- Consider which elements of the plan could be divided into discrete projects focused on building capability.
- Share the projects across smaller working groups which involve people from different departments.
- Communicate your plans clearly and widely to get buy-in from across the business.
- Ensure the plans are accessible to all, not just those in the senior management team.
- Continue to regularly reassess your plans and capabilities as market conditions and the business environment change.
- Consider whether your wider team could benefit from some external guidance or funding - there are government schemes in the UK that may be able to help.⁸
- Build capability and upskill existing staff via a part-time Senior Leader Apprenticeship programme⁹.
¹ See Agile marketing for the manufacturing-based SME https://www.emerald.com/insight/content/doi/10.1108/02634500610711851/full/html
³ Hailo was piloted as a taxi app but failed to gain widespread adoption due to the service charges, it’s now owned by Free Now
Dr Annmarie Hanlon - Senior Lecturer Digital and Social Media Marketing, Director of the Strategic Marketing Forum at Cranfield School of Management. Dr Hanlon is an academic and practitioner in strategic digital marketing and the application of social media for business. Her PhD investigated the benefits and outcomes of social media marketing within organisations for which she was awarded the Mais Scholarship. Originally a graduate in French and Linguistics from University of London, Annmarie studied for the Chartered Institute of Marketing Diploma and won the Worshipful Company of Marketors’ award for the best results worldwide. She gained a Master’s in Business Administration, focusing on marketing planning and achieved a distinction for the Chartered Institute of Marketing’s E-Marketing Award.
Dr Vasilis Theoharakis - Professor of Strategic Marketing. Dr Theoharakis holds a BEng (Honours) from the State University of New York at Stony Brook, an MSc in Electrical Engineering and an MBA (with Distinction) from New York University, and a PhD in Marketing and Strategic Management from the University of Warwick. He has taught at the European School of Management and Technology (ESMT) in Berlin, City University, Cass Business School in London, University of Sheffield, University of California - Berkeley, ALBA, Aston University, University of Cyprus and Golden Gate University.