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Strategic Planning and the Marketing Effectiveness Audit



The central role of marketing stems from identifying processes which create value to customers. Therefore, the marketing strategies and plans should be based on relevant frameworks which create and capture value to customers and to the businesses, themselves. The strategic planning involves a thorough analysis of the businesses’ internal strengths and weaknesses, and an evaluation of opportunities and threats in the market place. The scanning of the marketing environment leads management to choose particular customers and product strategies. Therefore, strategic planners have to assess their resources, competences and capabilities, as they should determine where their company stands relative to other competitors. They are expected to evaluate strategic options and to consider alternative courses of action, including market penetration, market development, product development and diversification. This chapter outlines the different stages of strategic planning. In conclusion, it underlines the importance of conducting ongoing effectiveness audits that should analyse marketing and operational aspects.
Strategic Planning and the Marketing
Effectiveness Audit
By Mark Anthony Camilleri1, PhD (Edinburgh)
This is a pre-publication version of a chapter that was accepted by Springer Nature.
How to Cite: Camilleri, M. A. (2018). Strategic Planning and the Marketing Effectiveness
Audit. In Travel Marketing, Tourism Economics and the Airline Product (Chapter 7, pp. 117-
135), Cham, Switzerland: Springer Nature.
The central role of marketing stems from identifying processes which create value to customers.
Therefore, the marketing strategies and plans should be based on relevant frameworks which create
and capture value to customers and to the businesses, themselves. The strategic planning involves a
thorough analysis of the businesses’ internal strengths and weaknesses, and an evaluation of
opportunities and threats in the market place. The scanning of the marketing environment leads
management to choose particular customers and product strategies. Therefore, strategic planners have
to assess their resources, competences and capabilities, as they should determine where their company
stands relative to other competitors. They are expected to evaluate strategic options and to consider
alternative courses of action, including market penetration, market development, product development
and diversification. This chapter outlines the different stages of strategic planning. In conclusion, it
underlines the importance of conducting ongoing effectiveness audits that should analyse marketing
and operational aspects.
7.1 Introduction
Successful organisations rely on strategic planning, organisation, leadership, implementation
and control to create value. The processes of strategic planning could create value
1 Department of Corporate Communication, Faculty of Media and
Knowledge Sciences, University of Malta, Malta. Email:
Strategic Planning and the Marketing Effectiveness Audit 1
by meeting and exceeding customer needs and by delivering benefits to them. Therefore, the
strategic planning process is related to the short-term marketing and operational plans. For
instance, one of the main functions of strategic planning is to identify the organisations’
strengths (including customer service standards, research and development, et cetera) which
can be used to take advantage of opportunities (arising from political, economic, social,
technological issues) in the marketing environment. In this light, it is imperative that
businesses evaluate their strategic plan and marketing processes through performance
management tools and marketing effectiveness audits.
7.2 Strategic Planning
Strategic planning is one of the most important stages in the application of marketing, as it
helps them to think ahead in a systematic way. It involves the scrutinisation of the internal
and external marketing environments. Marketers are expected to have a good understanding
of their companies’ strengths and weaknesses. They will rely on the interactions among
company executives and their functional areas, including; finance, human resources
management, operations, information technology, et cetera. Their support and coordinated
efforts will help the company to achieve the desired performance standards for their
organisation. This causes the company to sharpen its objectives, and to better prepare for
sudden developments. An effective communication of the strategic plan enables staff to know
what the company is aiming to achieve, and what is expected of them.
The strategic planners support their organisations’ executives, senior managers, and
marketers in their decision making by setting priorities. They could focus their energy on
improving internal resources, capabilities and competences (to strengthen operations), whilst
ensuring that employees and other stakeholders are working in tandem toward achieving
common goals. The strategic plan establishes agreements around intended outcomes. It
involves ongoing assessments and adjustments of the organisations’ direction, in response to
changing environments. Strategic planning is a disciplined effort that produces fundamental
decisions and actions. Therefore, it informs the organisation where it stands, in terms of; who
it serves, what it does, and why it does it; with a focus on the future.
Strategic Planning and the Marketing Effectiveness Audit 2
The marketing managers ought to assess all aspects of the organisation’s strategy in the
market place (i.e. the company’s products, services and markets). Marketers need to be aware
of their marketing environment. Their competitors’ strengths and weaknesses must be
identified, as rival firms may seek differentiation possibilities or cost advantages. Therefore,
marketers should continuously monitor their competitors’ objectives and strategies to be able
to predict their intentions.
Moreover, businesses could benefit from collaborative relationships with key partners in the
distribution chain, including retailers and suppliers. With respect to these marketplace
stakeholders, the firm must understand: their cost structure; expectations about margins and
allocation of tasks; support and training requirements; and the nature of their relationship
with the firm’s competitors. The suppliers should be considered as critical collaborators in
supporting the businesses’ marketing strategy and tactics. They are often responsible to
supply quality products (e.g. organic products to hotels, gourmet meals for inflight services,
et cetera) on a reliable basis.
Very often, businesses may benefit from first-mover advantages, if they are the first entrants
in the marketplace. This way, they may achieve a competitive advantage over their rivals.
With such an advantage, first-movers are usually rewarded with huge profit margins and a
larger market share. However, not all first-movers are rewarded. If they do not capitalise on
their advantages, they may leave untapped opportunities for new entrants to penetrate the
market. In this case, competitors could be more effective than the first-movers.
Businesses are increasingly shortening their planning horizons as they may face contingent
issues from the external environment. For instance, marketing strategy should consider the
technological context. The use of digital media has supported many businesses in their
distribution and communications endeavours. However, there were firms who were lagging
behind, as they were not quick enough to realise the importance of this disruptive innovation.
Other macro environmental factors, include; politics, regulation, law, and social norms.
7.3 The Strategic Plans
A strategic plan is a document which is used to communicate the organisation’s long term
goals and specific objectives. It coordinates the business in its execution of activities
Strategic Planning and the Marketing Effectiveness Audit 3
and processes. A well-articulated plan aligns resources, capabilities and actions with the
organisation’s mission, vision and strategy. Therefore, strategic planning is concerned with
the allocation of human and financial resources in the most effective pattern within the
organisation. Strategic management activities transform the static plan into a workable
system that provides strategic direction to decision making. Very often, the strategic plan may
have to be flexible as circumstances change. There are no absolute rules regarding the right
methodological frameworks for the preparation of strategic plans. However, many
frameworks may have common elements, including; 1) an analysis of the internal and
external environments, 2) strategy formulation in different levels across the organisation, 3)
strategy execution and implementation, where the high-level plan is translated into
operational planning 4) an ongoing evaluation of the plan, which may necessitate refinements
and adaptations to changes in the environment.
Planning involves making choices between alternatives and is primarily a decision making
activity. This is clearly evidenced in Table 7.1. The last two steps cover the control process
which involves measuring and correcting actual performance. These steps ensure that the
right alternatives are chosen and that effective plans are implemented.
Strategic Planning and the Marketing Effectiveness Audit 4
Table 7.1 The Planning and Control Cycle
Identify goals and objectives
Identify potential strategies which might contribute towards achieving objectives
Evaluate each strategy
Choose alternative courses of action
Implement the long term plan in the form of the annual budget
Measure actual results and compare with the plan
Respond to divergences from plan
1) Identify objectives: The goals are overarching principles which guide marketers in their
decision making. Businesses can plan ahead for their future, if they generate goals.
Objectives are the specific steps which are required to achieve goals. These businesses’
objectives are typically specific, measurable, attainable, realistic and may have an
associated timeline. Objectives can be motivating to both management and employees,
as meeting objectives provides a sense of accomplishment.
2) Identify potential strategies: Once an organisation has decided ‘where it wants to be’,
the next step is to identify the possible courses of action or strategies that might enable
the organisation to get there. The organisation must carry out an information gathering
exercise to ensure that it has a full understanding of where it is now. This is also known
as the position audit, or strategic analysis; as it involves looking inwards and outwards.
A SWOT analysis will help the business to identify internal strengths and weakness
within the organisation and to consider opportunities and threats in the external
marketing environment.
Strategic Planning and the Marketing Effectiveness Audit 5
a) The organisation must gather information from all of its internal parts to find out:
What resources it possesses? What are its capacities and capabilities? What is the
state of technical know-how? How well it is able to market itself? How much cash it
has in the bank?
b) It must also gather information from external sources so that it can assess its position
in the environment. Just as it has assessed its own strengths and weaknesses, it must
do likewise for its competitors (its threats). Current and potential markets must be
analysed to identify possible opportunities. For instance, the state of the economy
ought to be considered. What is likely to happen in future? Is the economy in a
recession, or is it booming?
Having carried out a strategic analysis, alternative strategies can be identified. An
organisation might decide to be the lowest cost producer in the industry, perhaps by
withdrawing from some markets or by developing new products for sale in existing
markets. This may involve internal development or a joint venture.
3) Evaluate strategies: The strategies must then be evaluated in terms of suitability,
feasibility and acceptability. Management should select those strategies that have the
greatest potential for achieving the organisation’s objectives.
4) Choose alternative courses of action: The next step in the process is to collect the
chosen strategies together and to coordinate them into a long term strategic plan.
5) Implementing the long-term plan: The strategic plan should them be broken down
into smaller parts. It is unlikely that the different parts will fall conveniently into
successive time periods. Strategy A may take two and a half years, while strategy B may
take five months, but will not start until year three of the plan. It is usual to break down
the plan as a whole into equal time periods (usually one year).
Strategic Planning and the Marketing Effectiveness Audit 6
6) Measure actual results and compare with the plan: Actual results are recorded and
analysed. The information about actual results is fed back to the management concerned
and is often in the form of reports. This reported information is important feedback.
7) Respond to divergences from the plan: By comparing actual and planned results,
management can then do one of three things, depending on how they see the situation:
a) They can take control action. By identifying what has gone wrong and then finding
out why, corrective action can be taken.
b) They can decide to do nothing. This could be the decision when actual results are
going better than planned, or when poor results were caused by something which is
unlikely to happen again in the future.
c) They can alter the plan or target if actual results are different from the plan or target,
and there is nothing that the management can do (or nothing perhaps that they want
to do) to correct the situation.
7.4 Marketing Plans
Short term marketing plans specify the marketing goals and objectives of businesses. They
outline how resources will be used toward achieving marketing results. A detailed and
calendarised plan sets out how and when marketing objectives are to be achieved; what
tactics and resources will be used to achieve the desired performance, et cetera. Hence,
marketing plans clarify what is expected from members of staff in marketing functions;
including, product development, field sales, publicity, standards, research, public relations,
distribution, and so on. They may also establish who will carry out what task, when and why.
This tactical plan ensures as far as possible that the overall marketing operations are working
towards achieving common goals. The marketing plans should contain the following nine
items: (1) an executive summary; (2) an assessment of the current market situation; (3) a
strengths, weaknesses, opportunities and threats analysis; (4) a list of objectives; (5) a
Strategic Planning and the Marketing Effectiveness Audit 7
specification of market research requirements; (6) a marketing strategy; (7) an action
programme; (8) an outline of control and review procedures; and (9) a contingency plan.
1) Executive Summary
This is a short statement of the main goals and recommendations of the marketing plan.
2) Current Market Situation
An analysis of the current market situation can be divided into five different sections, as
Marketing situation: This consists of historical data on the size and growth of the various
markets in as much detail as possible; it includes relevant information on consumer segments
and market shares. Data is also presented on customer need and wants, perceptions and
buying behavioural trends;
Competitive situation: Here the major competitors are described in as much detail as
possible, in terms of market share, type of products, et cetera;
Distribution situation: A description of the distributive channels;
Marketing environment situation: A description of broad environmental trends (including;
demographic, economic, technological, political, legal, social /cultural, and so on), which will
have a bearing on the company’s strategic direction. The marketing environment is
continuously changing. If this was not the case, there would be no need for market planning.
The marketing environment yields opportunities and threats which will surely condition the
organisation’s overall objectives, and consequently their marketing plans. The marketing
plans will help them to respond quickly and efficiently to changes in the environment.
3) Strengths, Weaknesses, Opportunities and Threats Analysis
Endeavours should be made to identify the particular strengths and weaknesses contained
within the company. The main opportunities and threats from the external environment are
also identified.
4) List of Objectives
Strategic Planning and the Marketing Effectiveness Audit 8
The organisational goals should be converted into statements of marketing objectives that are
designed to achieve these goals (for example, an increase in sales or profitability can be
achieved through: an increased brand awareness; a growing market share, the launch of new
products or services, targeting new customers, the penetration into new markets; forging
stakeholder relationships, improved internal communications, et cetera).
5) Market Research Requirements
At this stage, a programme of market research must be specified (for a year, at least). Earlier,
this book (in Chapter 2) suggested that market research entails the systematic collection,
analysis, interpretation and reporting of information relating to consumers, products and
environmental factors which may influence the market situation.
There are two types of research – quantitative and qualitative. Quantitative research involves
the statistical analysis of large numbers of people. Qualitative research explores in some
depth, the reactions, opinions and behaviours of a small number of people, which are known
as the sample of the population. The market research process can be divided into 4 different
The initial stage is the identification and definition of the problem and research
objectives. The research objectives may be exploratory or descriptive;
The second step entails designing the research plan. Decisions must be made here
regarding the methods of data collection to be applied and the type of data to be
collected (primary or secondary). The time and cost of the research must also be
The third stage of the plan is the implementation of the research. This is the most
expensive part of the process. Thus, this stage requires careful monitoring;
Strategic Planning and the Marketing Effectiveness Audit 9
The fourth stage is the analysis of the data, and the preparation of market research
report with its findings and conclusions (including implications, limitations and
It is essential that this research is carried out efficiently so that the information which it yields
is accurate. As the marketing plan is based on relevant research; any inaccurate findings
could distort the marketing plan.
6) Strategies and Tactics within the Marketing Plan
A broad marketing strategy or marketing mix should be given for each target market under
the headings of: product, price, distribution and promotion.
In other words, a particular marketing strategy for each target market must be specified – for
example, a company may target the business travellers, the leisure travellers, and so on.
Afterwards, the company’s overall strategic plan will identify those segments which are the
most profitable, or which may be relevant to the business, for other reasons. Once it has done
this, it must decide what positions it wants to occupy in these segments. This process is
known as marketing positioning. It is not enough for the business to have an outstanding or
an excellent product, if it is incorrectly positioned in its target market segments. Market
positioning at its most basic level involves having an effective corporate image which appeals
to the chosen customers. It must ensure that the customers appreciate the company’s unique
advantages over its competitors. Market positioning should contribute to the company’s
achievement of its overall objectives. It does this by highlighting the most appropriate areas
of investment, and by identifying those market segments which will yield the highest return
on investment. The company’s marketing strategy can then be concentrated to improve its
market share through better positioning among target segments.
Market Share
The market share which a business holds is influenced by its success, or lack of success, in
terms of the positioning of its image. A badly positioned product may lead to a reduction in
market share. A well-positioned product results in increased market share. The businesses
must identify themselves as being one of the following: marketing leader; market holder (or
challenger) or market foot holder.
Strategic Planning and the Marketing Effectiveness Audit 10
The market leader has a dominant market share. Possible strategies for the market leader
include: expand the market share further; expand the size of the market; protect the current
market share; adopt a product innovation strategy; create a specific selling strategy; ensure
efficient sales promotion, or employ heavy advertising.
The market holder (or challenger) is usually the second, third or fourth, in terms of market
share. Possible strategies for the market holder include adopting a direct attack strategy which
emphasises the customer benefits; the adoption of a product innovation strategy; a product
variety strategy; improved service strategies; creative distribution strategies and intensive
advertising strategies.
The market foot holder is a company with just a foothold in the market. Such a company may
have a modest market share. The market footholder needs to get a clear picture of the market
and the company’s position in it. These companies should target profitable market segments.
They ought to identify market needs and meet them through the application of different
strategies, including:
Market Penetration
In market penetration strategy, the organisation tries to grow by using its existing offerings
(products and services) in existing markets. In other words, this will usually involve
increasing the market share within existing markets. This can be achieved by selling more
products or services to established customers, or by finding new customers. Here, the
company will want to increase its sales for its present products in its current markets. This
can be accomplished by: (i) a decrease in price; (ii) enhanced promotions and wider
distribution networks; (iii) acquisition of rival businesses, in the same market; (iv) modest
product refinements, among other options.
Market Development
In a market development strategy, a firm tries to expand into new markets (new cities, new
destinations, new countries, et cetera) by using its existing offerings. This can be
accomplished by (i) targeting different customer segments (ii) targeting new customers from
other areas or regions (iv) targeting foreign markets. This strategy is more likely to be
Strategic Planning and the Marketing Effectiveness Audit 11
successful where the firm has a unique product technology which it can employ in a new
market. In this case, the company would benefit from economies of scale, particularly, if it
decides to increase its output, and if the new market is not too different from the one it has
experience of. The market development strategy will only be feasible if the new market is
Product Development
This strategy suggests that a company could create new products and services for its existing
markets. This involves extending the product range for the benefit of the firm's existing
markets. These products may be obtained by: (i) investing in research and development of
additional products; (ii) acquiring the rights to produce and sell someone else's products or
services; (iii) buying new products and "branding" them; (iv) working in collaboration with
other businesses, for example, through mergers and acquisitions to access new distribution
channels or brands.
If an organisation pursues a diversification strategy, it will probably introduce new offerings,
in terms of products or services, in new markets. This strategy is risky because both product
and market development is required. There are different diversification strategies:
Related diversification: This strategy involves a process that takes place when a
business expands its activities in product lines that are similar to those it currently
offers. For example, an established hotel chain may consider diversifying into budget
Concentric diversification: This strategy involves acquiring or creating new
products or services to reach more consumers. The companies’ new offerings are
usually closely related to its existing products and services.
Vertical integration: This strategy involves a company’s expansion in its distribution
chain. For example, vertical integration is conspicuous when a manufacturer owns its
Strategic Planning and the Marketing Effectiveness Audit 12
supplier and / or distributor. The vertical integration strategy can help companies
reduce costs and improve efficiencies by decreasing transportation expenses and
reducing turnaround time, among other advantages. However, at times it could be
more effective for a company to rely on the established expertise and economies of
scale of other vendors, rather than trying to become vertically integrated.
Unrelated Diversification: This strategy involves introducing new or unrelated
product lines or services in new markets.
Once the marketing strategies are well defined, product development may begin. Pricing may
be determined, and the channels of distribution may be chosen. These activities will be
employed in accordance with defined strategies, which have been formulated with the
company objectives in mind. The final stage of the marketing process includes selling
products and delivering the service. This involves communicating to the customers using the
promotional mix (i.e. advertising, personal selling, direct marketing, sales promotion, public
relations and interactive channels) in order to create awareness of, or stimulate sales of the
product. The promotional mix is one of the components of the marketing mix, otherwise
known as the 4Ps.
The overall amounts of money that are allocated for market penetration, market development,
product development or diversification, together with their related promotional expenses,
should be included in this section.
7) Action Programme
Each element of the marketing strategy must now be elaborated in a separate section, which
should answer each of the following questions: What will be done? When will it be done?
Who will do it? How much will it cost?
8) Control and Review Procedures
The control and review procedures decide and outline how the plan will be controlled and
monitored, once it is set in motion. (for example, what kind of feedback information is
required and how often?). A date must now be set for a formal review of the plan.
Strategic Planning and the Marketing Effectiveness Audit 13
Control is the final stage in the marketing planning process. It monitors the effectiveness of
the marketing plan. The information provided by this control procedure forms the basis for
the next round of strategic planning. If the business did not conduct an evaluation of its
marketing plan, the plan would be little more than an expensive waste of time. Evaluation is a
learning process. Corrective action must be taken immediately if the company realises that
the plan is failing to aid it in achieving its overall objectives. A common method of carrying
out such an evaluation is to conduct a marketing effectiveness audit.
Control is concerned with three things: setting standards; measuring performance and taking
corrective action when performance falls too short of the stated objectives.
9) Contingency Planning
Certain control plans also contain contingency elements. A contingency plan outlines the
steps to be taken in the case of specific adverse developments occurring (for example price
wars, strikes, delays and so on).
7.5 Performance Measurement
Performance measurement aims to establish how well the business is doing in relation to a
plan. Performance measures may be financial and non-financial metrics. Factors to consider
include the following:
Measurement needs resources, including people, equipment and time to collect and
analyse information. The costs and benefits of providing resources to produce a
performance indicator must be carefully weighed up.
Performance must be measured in relation to something, otherwise measurement is
meaningless. Overall, performance should be measured against objectives of the
organisation, and the plans that result from specific objectives. If the organisation has
no clear objectives, the first step in performance measurement is to set them. The
second is to identify the factors that are critical to the success of those objectives.
Strategic Planning and the Marketing Effectiveness Audit 14
Measures must be relevant. This means finding out what the organisation does and
how it does it so that the measures reflect what actually occurs.
Short or long term achievement should be measured. Short term target can be
valuable, but exclusive use of them may direct the organisation away from
opportunities that will mean success for the business in the long term.
Measures should be fair. They should only include factors which managers can
control by their decisions, and for which they can be held responsible.
A variety of measures should be used. Managers may be able to find ways to distort a
single measure, but should not be able to affect a variety of measures. The Balanced
Score Card, the Building Blocks Model and the Performance Pyramid (see below)
provide good methods of measuring performance from a number of perspectives.
Realistic estimates may be required for measures to be employed. These include
estimates of the impact of non-financial items.
Measurement needs responses, above all. Managers will only respond to measures
that they will find useful. For example, senior managers could introduce customer-
centric performance metrics which measure customer acquisition, customer retention
and development.
Once suitable performance measures have been selected, they must be monitored on a regular
basis to ensure that they are providing useful information. There is little point in an
organisation devoting resources to measuring market share if an increase in market share is
not one of the organisation’s objectives.
7.5.1 Non-Financial Performance Indicators
One of the many criticisms of performance measurement is that they do not measure the
skills, morale and training of the workforce, which can be as valuable to an organisation as its
Strategic Planning and the Marketing Effectiveness Audit 15
tangible assets. For example, if employees have not been trained in customer services, an
organisation is unlikely to be successful. Employee attitudes and morale can be measured by
surveying employees. Education and skill levels, promotion and training, absenteeism and
labour turnover for the employees for which each manager is responsible can also be
monitored. In many of these cases, the measures used will be non-financial ones. They may
be divided into the following:
a) Measuring the quality of incoming supplies (e.g. food and beverage);
b) Monitoring employee performance (e.g. through customer surveys);
c) Measuring customer satisfaction; (e.g. letters of complaints, customer ratings, et
Service quality is usually measured by qualitative metrics, although some quantitative metrics
are used, as well. The number of lost customers could be an indicator of service quality. The
amount of time serving a customer could also be considered as a measure of service quality.
Many hospitality and airline businesses use questionnaires to investigate the consumers’
attitudes toward the service. Other possible measures of customer satisfaction in the tourism
industry, include;
Market research information on consumer preferences with specific products, a number of
customer complaints as a percentage of total sales volume, average time to deal with
consumer queries, new customer accounts opened, and repeat business from existing
customers, among others.
7.6 The Balanced Score Card Approach
Kaplan and Norton’s (1996) Balanced Scorecard (BSC) measures organisational performance
by using a balanced set of performance measures. Traditionally, companies have often used
short-term financial metrics as performance measures. However, the “balanced scorecard”
also includes non-financial measures to better focus on organisational performance. BSC
provides a clear prescription as to what companies should measure in order to 'balance' the
strategic and financial perspectives. The BSC approach is a strategic planning and
Strategic Planning and the Marketing Effectiveness Audit 16
management system that focuses on four perspectives and uses financial and non-financial
indicators, as shown in Table 7.2.
BSC connects strategic elements such as mission (the purpose), vision (aspirations), core
values, strategic focus areas (themes, results and/or goals) and the more operational elements
such as objectives (continuous improvement activities), non-financial measures (or key
performance indicators; which track strategic performance), targets (the desired level of
performance), and initiatives (projects that will help the business to reach its targets) with the
traditional financial measures, including return on investments, profit margins, liquidity ratios
et cetera. BSC’s approach involves the continuous improvement activities and actions that
will support organisations to achieve their financial, customer / stakeholder, internal process
or organisational capacity (learning and growth) objectives. Generally speaking, the
performance improvements in these four areas will support the organisations’ strategies. For
example, the objectives relating to the organisational capacity perspective will enable the
business to improve its internal process perspective, which, in turn, enable the organisation to
create desirable results in the customer and financial perspectives. Key performance
indicators (KPIs) will be identified for each perspective and are tracked over time. The KPIs
will indicate their progress toward desirable outcomes.
Table 7.2 The Four Perspectives of the Balanced Scorecard Approach
Perspective Question Explanation
Strategic Planning and the Marketing Effectiveness Audit 17
Customer (or Stakeholder) What do existing and new
customers value?
This perspective views
organisational performance
from the point of view the
customer (or stakeholders).
It gives rise to targets that
matter to customers,
including cost, quality,
delivery, et cetera.
Internal What processes must be
improved to achieve
marketing objectives?
This perspective views
organisational performance
through the lenses of quality
and operational efficiency.
It is related to the
organisation’s products or
services (and their internal
Organisational Capacity (or
Innovation and Learning)
How can the business
improve further to create
This perspective views
organisational performance
through the lenses of human
capital, infrastructure,
technology, culture and
other capacities that are key
to breakthrough
performance. It considers
the business’s capacity to
maintain a competitive
position through the
acquisition of new products.
Financial (or Stewardship) How can the business
improve its financial
performance and its value to
shareholders? How can a
business use its financial
This perspective considers
the organisation’s financial
performance and its use of
resources. It covers
traditional measures such as
growth, profitability and
shareholder value.
7.7 The Building Blocks Model
Fitzgerald and Moon (1996) have developed an approach to performance measurement in
business services that is based on three building blocks; including dimensions, standards and
rewards, as featured in Table 7.3.
Table 7.3 The Building Blocks Model
Strategic Planning and the Marketing Effectiveness Audit 18
Dimensions Standards Rewards
Competitiveness Ownership Clarity
Financial Performance Achievability Motivation
Quality of Service Fairness Controllability
Resource Utilisation
The dimensions may be considered as critical success factors (or goals) for the business.
Therefore, suitable metrics are used to measure the performance dimension. For example:
competitiveness could be measured through relative market share; the financial performance
can be measured by the profit margin; the quality of service could be determined according to
product reliability; the delivery time of a product could be considered as a measure of
flexibility; a metric for productivity is the utilisation of a resource, and; the degree of
innovation could be ascertained according to the developments of new products.
The first two; competitiveness and financial performance relate to downstream results. The
other four are upstream determinants. For example, a new product innovation will not impact
on profit, cash flow and market share that were achieved in the past. However, a high level of
innovation provides an indicator of how profit, cash flow and market share will move in the
future. If innovation is the driver or determinant of future performance, it could also be
considered a key success factor. The standards set, i.e. the KPIs, should have the following
Ownership: Managers who participate in the standard setting procedures are more
likely to accept the standards than if they were imposed to them by others;
Achievability: An achievable, but challenging standard is a better motivator than an
unattainable one;
Fairness: Managers should be allocated equally challenging standards.
Strategic Planning and the Marketing Effectiveness Audit 19
Employees will work hard towards achieving the standards, particularly if they are motivated.
The actual means of motivation may involve performance-related pay, a bonus or a
promotion. The standards need to be as clear as possible. The standards should be linked to
controllable factors. In sum, Fitzgerald and Moon’s (1996) building block model could
measure the key determinants of organisational performance, as their targets are set in such a
way to engage and motivate staff, through ownership, achievability and fairness.
7.8 The Performance Pyramid
Lynch and Cross (1992) developed the performance pyramid which includes a hierarchy of
financial and non-financial performance measures. Figure 7.1 illustrates how the performance
pyramid links the corporate strategy with day-to-day operations. It assists in the achievement
of the corporate vision.
Figure 7.1 The Performance Pyramid
Level 1: The corporate vision or mission will help the organisation to achieve long-term
success and competitive advantage.
Strategic Planning and the Marketing Effectiveness Audit 20
Level 2: The focus on marketing and financial factors are critical for the achievement of
corporate vision.
Level 3: The marketing and financial strategies that were set at level 2 lead to the
achievement of customer satisfaction, increased flexibility and higher productivity at the next
level. These are the guiding forces behind the organisation’s operations that will drive the
strategic objectives of the organisation.
Level 4: The operational forces in level 3 can be monitored by using key measures,
including; quality, delivery, cycle time and waste.
The left hand side of the pyramid contains measures which have an external focus and which
are predominantly non-financial. Those on the right are focused on the internal efficiency of
the organisation; which and are predominantly financial.
One of the drawbacks of the performance pyramid is that it focuses on two groups of
stakeholders, i.e. shareholders and customers. Additional measures could be included to
measure the businesses’ engagement with other stakeholders.
7.9 The Marketing Effectiveness Audit
It is extremely important for any business to analyse its marketing effectiveness. Without
measurement systems, organisations might continue to use strategies which are outdated,
which do not help them achieve their corporate or marketing objectives. A marketing audit is
a systematic examination of the marketing unit’s objectives, strategies, organisation and
performance. It has three functions, as follow:
It identifies what the marketing unit is doing;
It examines how it is performing these activities, and evaluates the effectiveness of
these activities, in terms of the organisations’ objectives and resources;
It recommends future marketing activities.
Strategic Planning and the Marketing Effectiveness Audit 21
It is important for any well-run organisation to carry out such periodic reviews of operations.
This is particularly true in the field of marketing, where objectives and strategies can become
quickly out-dated; as a result of changes in the environment and within the marketing
organisation itself. Audits highlight trends rather than present concrete facts. They help the
marketing managers to sample the effectiveness of their marketing activities. As such, they
will not tell them how to improve or change activities. However, they highlight the strengths
and weaknesses, and will show them where their decisions have been appropriate or less
appropriate. An analysis of the marketing performance should be carried out to establish
whether performance targets were reached. The marketing effectiveness will critically
analyse the following aspects of the marketing orientation:
1) Customer Philosophy;
2) An Integrated and Effective Organisation;
3) Adequate Information;
4) Strategic Orientation;
5) Efficient Operation.
7.9.1 The Customer Philosophy
The customer philosophy refers to the ability of staff and management to recognise the
primacy of studying the market place. It will evaluate whether management and staff are able
to distinguish between different segments. There may be different opportunities that may
arise from adopting a customer-centric approach.
Some managers may be technology-oriented, as they could enhance certain features of their
product. Conversely, they may not embrace technology to engage with customers. There are
other managers who may be sales oriented, as they believe that they would sell anything to
their customers. Alternatively, managers may be driven by cost-efficiency.
7.9.2 An Integrated and Effective Organisation
This refers to the integration of all marketing functions towards achieving customer
satisfaction. This involves using the total quality concept as a mantra throughout the entire
Strategic Planning and the Marketing Effectiveness Audit 22
company. Total quality can be achieved if each operating division has a clear view of
customer needs. This concept suggests that the employees’ priority is customer satisfaction.
However, this view ought to be internalised by the members of staff in every department and
must be reflected in the service they provide. It requires ongoing communications and
dialogue among departments within the organisation. The information must flow freely
between sections. The information communicated by one division may be critical to the
operation of another. Therefore, effective channels of communication must be in place to
allow the free movement of such information. Communication must exist all the way up from
the lower levels to top echelons of management. This sort of flexibility will allow the
business to service individual customer needs. This way, the customers will perceive that the
company care for them. Every person and process in the business, either immediately or
ultimately will affect the customer and the product. Therefore customer satisfaction is
everybody’s responsibility. The total quality management system requires proactive rather
than reactive management as every employee should be involved from top to bottom.
7.9.3 Adequate Information
Marketing managers must assess whether it has relevant, up-to-date information on target
markets, particularly on their customers’ needs and wants. They must ensure that they receive
information relating to the quality of customer service from all functional divisions which
affect customer service. It is essential that there are two-way channels of communication for
an organisation to function effectively.
7.9.4 Strategic Orientation
The businesses should have a well-defined core strategy which includes formal systems long
range and short-term plans, which will consider contingency elements, if necessary.
Business demands that the future plans are under constant review and that they always
contain contingency plans. A contingency plan involves making preparations to deal with
problems, should they occur. For instance, airlines may have to deal with overbookings. An
agreement with another airline would allow them to accommodate denied passengers who are
not accepted on board. Many airlines may have interline agreements with other airlines to
deal with overbooking situations.
Strategic Planning and the Marketing Effectiveness Audit 23
The company’s overall strategic plan defines its mission and objectives. Functional and
marketing plans must also be prepared.
7.9.5 Efficient Operations
The businesses must ensure that appropriate resources are made available to carry out the
various marketing activities. The organisations’ operations involve both human and other
resources (financial and technical). The companies’ employees must be carefully recruited,
assigned, trained and developed. They can achieve maximum efficiency if the human
resources managers deploy them in the right areas. Different marketing strategies will require
managers with different personalities and skills. Again, the total quality concept comes into
play. The strategic planners must also recognise that the various operational and marketing
activities must be allocated appropriate finances if they are to achieve optimum efficiency.
The marketing effectiveness audit involves the ongoing evaluation of performance against set
targets, involving both quantitative and qualitative assessments. Financial and non-financial
metrics can be used to examine the organisational performance, in many areas.
7.10 Questions
What are the main aims of strategic planning?
Briefly define the marketing plan
List the nine elements which must be included in the marketing plan.
Explain the four perspectives of the balanced score card. How can they be used to
evaluate an organisation’s strategic plan?
List the five major characteristics of marketing effectiveness audits.
Strategic Planning and the Marketing Effectiveness Audit 24
7.11 Summary
Strategic planning involves an ongoing assessment by top management of all the aspects of
an organisation’s strategy. Long range strategic planning includes; a definition of goals and
objectives; a determination of where the company stands in the marketing environment; an
evaluation of competences, resources and capabilities to put the strategic plan into action; an
assessment of alternative courses of action and the strategic options available; decisions
regarding possible avenues that are likely to be pursued; a preparation of other short-term
plans to be conducted; the budgeting for the long term plan; the measurement of actual results
and analyses; and taking necessary actions to improve the organisational performance.
The strategic planning of a company is a vital contributing factor to its long term economic
performance. It guides the business by illustrating those ways in which it can most effectively
employ its marketing resources. It also gives rise to a market plan. The marketing plan is a
documented statement of marketing policies and activities. It consists of a specification of
objectives (including associated goals) which will guide the businesses’ marketing efforts; a
presentation of resources to be used to achieve objectives and goals; and also a statement of
long-term developments that may affect marketing decisions, in the short term. The
marketing plan targets the most profitable segments of customers. It also communicates the
positioning strategy it wants to occupy in these segments. The market share is influenced by
its success, or lack of success, which a business has in positioning its image. In assessing its
market share, the business must identify its position in the marketplace.
A marketing plan should contain the following nine items: an executive summary; an
assessment of the current market situation; a strengths, weaknesses, opportunities and threats
analysis; a list of objectives; specification of market research requirements; a marketing
strategy; an action programme; outline of control and review procedures; and a contingency
The monitoring and control of the market plan provides information which can be used in the
next round of strategic planning. A formal system of strategic planning, if run successfully
can mean the difference between a business which recognises and meets its customers’ needs
and wants and one which falls short of this goal. The strategic management functions ought
to be measured. Factors to consider include financial and non-financial performance metrics.
Strategic Planning and the Marketing Effectiveness Audit 25
Managers may use a variety of measures to assess their organisational strategy; including; the
Balanced Score Card, the Building Blocks Model and the Performance Pyramid.
In conclusion, it is extremely important to analyse the businesses’ marketing effectiveness. A
marketing effectiveness audit is a systematic examination of the marketing unit’s objectives,
strategies, organisation and performance. It is important for any well-run organisation to
review their operations. A marketing audit relies on five major characteristics, including;
customer philosophy; an integrated and effective organisation; adequate information;
strategic orientation and efficient operation.
Strategic Planning and the Marketing Effectiveness Audit 26
... Rigtering et al. (2017) also found that the combination of entrepreneurial orientation and strategic planning leads to high performance in organizations. Reflecting on the mediating effect of strategi planning, it makes logical sense that the combination of entrepreneurial orientation and strategic planning should significantly influence e-learning adoption; while entrepreneurial orientation motivates institutions towards e-learning adoption, strategic planning provides clearly defined actionable plans (Andersen, 2000;Camilleri, 2018;Elbanna et al., 2016) that guide e-learning implementation, thus leading to elearning adoption. ...
... HR Audit is a process for continuous improvement and very useful when applied to the whole organization. Further, Camilleri (2018) also discusses that the HR Audit helps in achieving organizational goals/objectives. The job of HR Audit is to boost profitability improving the nature of work and creating value of the organization, and improving its effectiveness (Noe et al., 2017). ...
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The study examines HR policies using an HR Audit approach to improve the employee’s productivity in the airline industry of Pakistan. HR Audit implies an in-depth analysis of the HR functions to identify the strengths and weaknesses of the current policies and procedures to bring overall improvement in the productivity of the organization’s HR. The study follows a mixed-method (qualitative and quantitative) research approach, including in-depth interviews with three representatives of HR departments and a survey of 255 employees working in the airline industry of Pakistan. The results find inadequate HR policies in the airline industry. nepotism and favoritism in selection procedures is a gray area where leadership consideration is required. The results also provide guidelines for HR policymakers by identifying the avenue for improvement in the HR system, which may reduce the risk at the initial stage before it emerges as a significant threat in the future.
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This chapter aims to qualify Local Area as Smart Tourism Local Service Systems (S-TLSS), whose competitiveness and reputation depend on sharing strategies and processes of cohesion based on equifinality among/for stakeholder. The methodology envisages the integration of Service Science Management Engineering and Design (SSME+D) and the Viable Systems Approach (VSA). Thus it describes a S-TLSS in terms of local service system, whose viability requires a ‘smart governmentality’, able to guarantee the management of equity, sustainability and resilience. Referring to human resources coherent with value co-creation processes, S-TLSS implies T-shaped professionals: new kind of individuals who have proficiency in a specific field/discipline (deep professionality) and, at the same time, show capacity to understand and participate in complex projects/systems (broad professionality). Finally, the authors will show a practical application of the system attempting to enhance an Italian territory that is not very attractive to tourists and local residents.
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