Here's two and three quarter cents from someone who isn't a parent; take it for what it's worth:
Any discipline that you give a child is premised on fear. Not fear of the parent, but fear that if they do X, Y will happen. Of course, it's the parent(s) who performs Y, but ultimately the goal is to have them fear the consequence and not the consequence deliverer. Kids of different types fear different things. Some fear the physical pain of a spanking. Some fear the embarrassment of being spanked. Some fear the mere threat of being spanked. But fear doesn't only come from the threat of or execution of physical discipline. Some fear having a parent yell at them in an unpleasant tone. Some fear their parents being disappointed in or upset with them. Some fear not having their Xbox for a week.
The key (again, from someone who isn't a parent) is to determine what they fear, and use that fear as a deterrent to make them behave appropriately. Immediately and consistently resorting to physical discipline doesn't always work, and if that's all you rely on, then you eventually get to the point where your physical discipline gets more severe in an attempt to make it work. That's where things go wrong, especially on very young kids that can't take much punishment as it is.
Lastly, I'm not against spanking in the slightest, but the "Johnny got spanked and turned out fine" argument is weak. Johnny could have also gotten tortured in the basement by his father for a decade and turned out fine, but the end result doesn't necessarily make the preceding actions acceptable.