Interview: Professor Malcolm McDonald
Malcolm McDonald on Marketing Planning
Steve Macaulay
Today we are going to interview Professor Malcolm
McDonald about his book entitled Malcolm McDonald on
Marketing Planning.
Now Malcolm, I wonder if you could give me some
background on this.
Malcolm
McDonald
The background goes back a long, long way Steve. I
did a PhD, a doctoral thesis, here at Cranfield some
thirty years ago – it might have been thirty two years
ago. And I think I was one of the very few students in
the world to be studying marketing planning as a
process, as a physical, managerial process. And there
wasn’t much written on the subject. And when I did my
doctoral thesis I discovered why, because it was quite a
complex domain. It involved organisational structure,
organisational processes; it involved forecasting and
budgeting; it involved strategy making and all of that.
And nobody had appeared to have nailed that particular
jelly to the wall. So I set about it in my PhD thesis.
And when I had done that and got my doctorate, I
became Doctor Malcolm McDonald, I thought well now I
have done all that work, I might as well set it down in a
book and share it with the world because the world was
struggling with it. And what I had done during the book
was to look at global best practice; I have looked at the
best companies in the world and what they were doing –
which incidentally is how theory is developed anyway.
You look at best practice and you generalise it and then
you promulgate, it either by lectures or by books or by
articles and papers. I decided to promulgate it in all of
those ways by writing papers, lectures, I started a
programme here – a course which is still running called
Marketing Plans, would you believe. It is probably our
oldest and one of our most successful courses. It’s
always full of people who want to come along from a
complex world of business and learn how to put together
marketing plans. So that is how it started.
Steve Macaulay
So let’s have a look at what exactly is a marketing plan
because some people might think this is just an
operational plan, but it’s much more than that isn’t it?
Professor Malcolm McDonald
Malcolm
McDonald
Well the first thing is the obvious – the blindingly obvious
one of the difference between tactics and strategy.
Most of the world is, I am afraid, tactical. Most of the
world is pretty poor at strategy. There was a very recent
– I think it was last year, I can’t remember the exact
edition, but it was Harvard Business Review last year
and this author he said that most directors in America,
and this is in 2008, most directors in America – most
directors, not some, most – don’t even know what the
components of a strategy are and it causes confusion
and chaos and short termism.
So even my book and all the work we have done at
places like Cranfield, we haven’t been particularly
successful in communicating the core notion of strategy
before tactics. Because it is easy to do tactics because
we know our businesses, we know how to answer the
phone, we know how to price a product etc. It is much
more difficult in a complex, overcrowded world to find
ways of differentiating yourself.
Steve Macaulay
Now you have a structured recipe for marketing planning
that seems to work very well; can you describe what that
is?
Malcolm
McDonald
Yes. Any organisation, any board and the people who
report to that board, who can’t actually spell out their
market, that is the first thing, understanding their market.
Because most companies today still talk about their
markets in terms of products – the things they make –
rather than the benefits and the needs that people have
out there.
So for example, IBM they nearly went bankrupt about
fifteen years ago because they described their market in
terms of mainframes which was clearly a nonsense.
Gestetner did go bankrupt because they defined their
market in terms of duplicators, and so on and so forth. It
is a nonsense; you have got to define your market in
terms of market needs. That is the first part of it; it’s
understanding the market.
The second bit of it is understanding, obviously, your
competitors. So you understand the market, you
understand the users, the consumers, the users in that
market; you understand your competitors. You
understand your own strengths and weaknesses
compared with what is required in the market, and
having done the really hard work, you can then go on to
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Professor Malcolm McDonald
start developing offers or products or services to meet
those needs better than your competitors.
That is the process. Now obviously when you get that
far you have got to start putting the numbers in and
thinking about how much it is going to cost you and what
the revenues are going to be and what the costs are.
But you have got to do it over a period of at least three
years. When I started marketing plans it was five years,
but now most organisations in the world use three year
strategic plans as the basis of their commercial
enterprise. But I would say that the book on which it is
based, the Marketing Plans text book, which has been
out now for thirty years, has sold almost half a million
copies worldwide; it is still selling like hot cakes because
it’s simple, it’s doable. The one thing that differentiates,
I think, my books from many others, not all books, is the
fact that you take complex processes like that and make
them doable, make them implementable. And that is
what people like about the Marketing Plans book.
Steve Macaulay
And this is a complement to that, it’s a very much a how
to guide?
Malcolm
McDonald
The book, The Malcolm McDonald on Marketing
Planning book is a slimmed down version of the main
book because the main book has in it lots and lots of
stuff for teachers around the world; people who teach
marketing planning in universities. So it’s got DVDs, it’s
got case studies, it’s got tutor’s guides and all those
kinds of things.
The Marketing Plans book that you are referring to is a
slimmed down version for practising managers so that
they can pick it up. It’s got templates in it, they can get
90% of the way there fairly quickly without having to
plough through a 650 page long book that is more
geared towards the academic community.
Steve Macaulay
So if you would like to leave people with a single
message from the book, what would it be?
Malcolm
McDonald
It would be if you cannot explain to your people why the
market out there, having defined it, should buy what you
are offering, rather than what somebody else is offering,
then I would have failed and they haven’t read the book
properly.
Steve Macaulay
Malcolm McDonald, thank you very much..
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