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MARKETING AUDIT

The marketing audit is a fundamental part of the marketing planning process. It is conducted not only at the beginning of the process, but also at a series of points during the implementation of the plan. The marketing audit considers both internal and external influences on marketing planning, as well as a review of the plan itself. There are a number of tools and audits that can be used, for example SWOT analysis for the internal environment, as well as the external environment. Other examples include !ST and "ive "orces #nalyses, which focus solely on the external environment. In many ways the marketing audit clarifies opportunities and threats, and allows the marketing manager to make alterations to the plan if necessary. This lesson considers the basics of the marketing audit, and introduces a marketing audit checklist. The checklist is designed to answer the $uestion, what is the current marketing situation% &ets consider the marketing audit under three key headings' The Internal (arketing !nvironment. The !xternal (arketing !nvironment. # )eview of Our *urrent (arketing lan. 1.The Internal Marketing Environment. What resources do we have at hand% +i.e. The "I,! -(-s.' (!/ +&abor0&abour.. (O/!1 +"inances.. (#*2I/!)1 +!$uipment.. (I/3T!S +Time.. (#T!)I#&S +"actors of roduction..

2ow is our marketing team organised% 2ow efficient is our marketing team% 2ow effective is our marketing team% 2ow does our marketing team interface with other organisations and internal functions% 2ow effective are we at *ustomer )elationship (anagement +*)(.% What is the state of our marketing planning process% Is our marketing planning information current and accurate% What is the current state of /ew roduct 4evelopment% + roduct. 2ow profitable is our product portfolio% + roduct. #re we pricing in the right way% + rice. 2ow effective and efficient is distribution% + lace. #re we getting our marketing communications right% + romotion. 4o we have the right people facing our customers% + eople. 2ow effective are our customer facing processes% + rocess. What is the state of our business-s physical evidence% + hysical !vidence. 2. The External Marketing Environment.

4r. 3ma Sankar (ishra, #ssociate rofessor, I5*S, S 6O7 # 3niversity, 55S)

#s a market orientated organisation, we must start by asking 8 What is the nature of our -customer%- Such as' Their needs and how we satisfy them. Their buyer decision process and consumer behaviour. Their perception of our brand, and loyalty to it. The nature of segmentation, targeting and positioning in our markets. What customers -value- and how we provide that -value%.What is the nature of competition in our target markets% Our competitors- level of profitability. Their number0concentration. The relative strengths and weaknesses of competition. The marketing plans and strategies of our competition.

What is the cultural nature of the environment+s.% 5eliefs and religions. The standards and average levels of education. The evolving lifestyles of our target consumers. The nature of consumerism in our target markets.

What is the demography of our consumers% Such as average age, levels of population, gender make up, and so on. 2ow does technology play a part% The level of adoption of mobile and Internet technologies. The way in which goods are manufactured. Information systems. (arketing communications uses of technology and media. What is the economic condition of our markets% &evels of average disposable income. Taxation policy in the target market. !conomic indicators such as inflation levels, interest rates, exchange rates and unemployment. Is the political and legal landscape changing in any way% &aws, for example, copyright and patents. &evels of regulation such as $uotas or tariffs. &abour0labor laws such as minimum wage legislation.

. A Revie! o" #ur $urrent Marketing %lan What are our current ob9ectives for marketing% What are our current marketing strategies% 2ow do we apply the marketing mix% +Including factors covered above in +a.. Is the marketing process being controlled effectively% #re we achieving our marketing budget% #re we realising our S(#)T ob9ectives%

4r. 3ma Sankar (ishra, #ssociate rofessor, I5*S, S 6O7 # 3niversity, 55S)

#re our marketing team implementing the marketing plan effectively% &evels of staffing. Staff training and development. !xperience and learning.

What is our market share% +total sales0trends0sales by product or customer or channel. #re we achieving financial targets% +profit and margins0 li$uidity and cash flow0 debt' e$uity ratio0 using financial ratio analysis.

The Audit %ro&e''


(o! !e !ill audit )our marketing o*eration' # Marketing Audit does exactly what it says. If your marketing operations are inline with your business ob9ectives, and fit well within your corporate capabilities, you will benefit from improved marketing and higher profit potential. The audit involves the following broad tasks' Under'tand )our goal' 8 what do you want to improve Gathering marketing material' 8 what you are using, and how are you using it Intervie!' 8 talking to employees from all departments, and where appropriate, suppliers and customers Anal)'e 8 anyone can collect information and write down some goals, but the analysis and understanding we can provide will give you an enormous insight into the marketing functionality of your business Re*ort' 8 we will provide you with a full report, with an actionable checklist for you to follow, using your own people, or with our help

The marketing audit


Our audit process follows the following areas'

!nvironmental audit
(o! )ou "it into the !ider market*la&e We audit your marketing processes by starting by looking at the factors that affect all companies operating in your marketplace, looking at your customers and their profiles. The audit will examine the following' o Ma&roenvironmental audit It+' a,out !here )ou are- not !hat )ou are

4r. 3ma Sankar (ishra, #ssociate rofessor, I5*S, S 6O7 # 3niversity, 55S)

The (acro8environmental component examines six main areas, the detail depending on the involvement of the business and involvement re$uired by the industry. The audit covers the following broad areas. Demogra*hi&' What ma9or demographic developments and trends pose opportunities or threats to the company% What actions has the company taken in response to these developments and trends% E&onomi& What ma9or developments in income, prices, savings and credit will affect the company% What actions has the company taken in response to these developments and trends% Environmental What is the outlook for the costs and availability of natural resources and energy needed by the company% What concerns have been expressed about the company-s role in pollution and conservation, and what steps has the company taken0planned% Te&hnolog) What ma9or changes are occurring in product and process technology% What is the company-s position in these technologies% What ma9or generic substitutes might replace the company product0s% %oliti&al What changes in laws and regulations might affect marketing strategy and tactics% What is happening in the areas of pollution control, e$ual employment opportunity, product safety, advertising, price control, etc, that affects the marketing strategy% $ultural What is the public-s attitude towards business and toward the company-s products% What changes in customer lifestyles and values might affect the company%
o

Ta'k environmental audit

Are )ou &om*etitive in )our market*la&e. 2ow competitive is the marketplace% What are competitors doing, and are they doing it well% What might they be preparing to do% These are all vital to understand in preparing yourselves for the battle. We evaluate the following' 4r. 3ma Sankar (ishra, #ssociate rofessor, I5*S, S 6O7 # 3niversity, 55S)

Market' What is happening to market si:e, growth, geographical distribution and profits% What are the ma9or market segments% $u'tomer' What are the customers- needs and buying processes% 2ow do customers and prospects rate the company and its competitors on reputation, product $uality, service, sales force and price% 2ow do different customer segments make their buying decisions% $om*etitor' Who are the ma9or competitors% What are their ob9ectives, strategies, strengths, weaknesses, si:es and market shares% What trends will affect future competition and substitutes for the company-s products% Di'tri,ution / dealer' What are the main trade channels for bringing products to customers% What are the efficiency levels and growth potentials of the different trade channels% 0u**lier' What is the outlook for the availability of key resources used in production% What trends are occurring among suppliers% 1a&ilitator' / marketing "irm' What is the cost and availability outlook for transportation services, warehousing facilities and financial resources% 2ow effective are the company-s advertising agencies and marketing research firms% %u,li&' Which publics represent particular opportunities or problems for the company% What steps has the company taken to deal effectively with each public%

Marketing 'trateg) audit


Doe' )our 'trateg) "it )our ,u'ine''. Strategy is vital for companies, and it is ama:ing how many companies seem to operate on a wing8and8a8prayer. We ensure that you are not one of these companies. The audit involves the following' 2u'ine'' Mi''ion 4r. 3ma Sankar (ishra, #ssociate rofessor, I5*S, S 6O7 # 3niversity, 55S)

Is the business mission &learl) 'tated in market8oriented terms% Is it "ea'i,le%

Marketing o,3e&tive' / goal' #re the company and marketing ob9ectives and goals stated clearly enough to guide marketing planning and performance measurement% #re the marketing ob9ectives a**ro*riate, given the company-s competitive position, resources and opportunities% 0trateg) 2as the management arti&ulated a clear marketing strategy for a&hieving its marketing ob9ectives% Is the strategy &onvin&ing% Is the strategy a**ro*riate to the stage of the *rodu&t li"e &)&le, competitorsstrategies and the state of the economy% Is the company using the best ,a'i' for market segmentation% 4oes the company have clear &riteria "or rating the segments and choosing the best ones% 2as it developed a&&urate profiles of each target segment% 2as the company developed an e""e&tive positioning and marketing mix for each target segment% #re marketing re'our&e' allo&ated o*timall) to the ma9or elements of the marketing mix% #re enough resources or too many re'our&e' ,udgeted to accomplish the marketing ob9ectives%

Marketing organi'ation audit


Doe' )our marketing organi'ation &om*liment )our o*eration'. The audit covers the following' 1ormal 'tru&ture 4oes the marketing director have ade$uate authorit) and re'*on'i,ilit) for company activities that affect customers- satisfaction% #re the marketing activities o*timall) 'tru&tured along functional, product, segment, end8user and geographical lines% 1un&tional E""i&ien&) #re there good &ommuni&ation' and working relations between marketing and sales% Is the product8management system working e""e&tivel)% #re product managers able to plan *ro"it' or only 'ale' volume'% #re there any groups in marketing that need more training, motivation, 'u*ervi'ion or evaluation% Inter"a&e E""i&ien&) 4r. 3ma Sankar (ishra, #ssociate rofessor, I5*S, S 6O7 # 3niversity, 55S)

#re there any problems between marketing and manufacturing, );4, purchasing, finance, accounting and0or legal that need attention%

Marketing ')'tem audit


Are )our ')'tem' 'u**orting )our marketing e""ort'. In this section the company has the opportunity to put the business under the microscope. 4o you know as much about your business situation as you should% Marketing in"ormation ')'tem' Is the marketing intelligence system producing a&&urate, 'u""i&ient and timel) information about marketplace developments with respect to customers, prospects, distributors and dealers, competitors, suppliers and various publics% #re company de&i'ion maker' asking for enough marketing research, and are they using the results% Is the company employing the best methods for market mea'urement and sales "ore&a'ting% Marketing *lanning ')'tem' Is the marketing planning system well conceived and effectively used% 4o marketers have decision 'u**ort ')'tem' available% 4oes the planning system result in acceptable sales target' and 4uota'% Marketing &ontrol ')'tem' #re &ontrol *ro&edure' ade$uate to ensure that the annual plan ob9ectives are being achieved% 4oes management periodically analyse the *ro"ita,ilit) of products, markets, territories and channels of distribution% #re marketing &o't' and *rodu&tivit) periodically examined% Ne! *rodu&t develo*ment ')'tem' Is the company well organised to gather, generate and screen ne! *rodu&t idea'% 4oes the company do ade$uate concept re'ear&h and ,u'ine'' anal)'i' before investing in new ideas% 4oes the company carry out ade$uate *rodu&t and market te'ting before launching new products%

Marketing *rodu&tivit) audit


Are )ou *ro"ita,le. rofitability is ke) in business, but this involves understanding both your profit and your cost structure. The audit involves the following' %ro"ita,ilit) anal)'i' 4r. 3ma Sankar (ishra, #ssociate rofessor, I5*S, S 6O7 # 3niversity, 55S)

What is the *ro"ita,ilit) of the company-s different products, markets, territories and channels of distribution% Should the company enter, expand, contract or withdraw from any ,u'ine'' 'egment'%

$o't e""e&tivene'' anal)'i' 4o any marketing activities seem to have ex&e''ive &o't'% *an &o't5redu&ing steps be taken%

Marketing "un&tion' audit


U'ing the marketing mix to anal)'e )our "un&tion' The marketing mix comprises of framework comprising of roduct, rice, lace +4istribution. and romotion. %rodu&t' What are the company-s product8line o,3e&tive'% #re the ob9ectives sound% Should the product line be 'tret&hed or &ontra&ted upward, downward, or both ways% Which products should be *ha'ed out% Which products should be added to% What are the buyers- kno!ledge and attitude' toward the company-s and competitors- product $uality, features, styling, brand names, etc% What areas of product and brand strategy need im*rovement% %ri&e'

What are the company-s *ri&ing o,3e&tive', policies, strategies and procedures% To what extent are the prices set on cost, demand and competitive criteria% 4o the customers see the company-s prices as being in line with the value of its offer% What does management know about the *ri&e ela'ti&it) of demand, ex*erien&e5 &urve effects and competitors- prices and pricing policies% To what extent are price policies &om*ati,le with the needs of distributors and dealers, suppliers and government regulations%

%la&e 6Di'tri,ution7 What are the organisation-s adverti'ing o,3e&tive'% Is there ade$uate market &overage and service% 2ow e""e&tive are distributors, dealers, manufacturers- representatives, brokers, agents and others% 4r. 3ma Sankar (ishra, #ssociate rofessor, I5*S, S 6O7 # 3niversity, 55S)

Should the company consider changing its di'tri,ution &hannel'%

%romotion Including advertising, sales promotion, publicity and direct marketing. What are the organisations adverti'ing o,3e&tive'% #re the ob9ectives sound% Is the right amount being spent on advertising% #re the ad5theme' and &o*) effective% What do customers and the public think about the advertising% #re the adverti'ing media well chosen% Is the internal advertising staff ade$uate% Is the sales promotion ,udget ade$uate% Is there effective and sufficient use of 'ale' *romotion tool' such as samples, coupons, displays and sales contests% Is the public relations staff &om*etent and &reative% Is the company making enough use of direct, online and database marketing% 0ale' 1or&e What are the sales force-s o,3e&tive'% Is the sales force large enough to accomplish the company-s ob9ectives% Is the sales force organi'ed along the proper principles of '*e&iali'ation +territory, market, product.% #re there enough +or to many. sales managers to guide the field sales representatives% 4o the sales &om*en'ation level and structure provide ade$uate in&entive and re!ard% 4oes the sales force show high morale, a,ilit) and e""ort% #re the procedures ade$uate for setting 4uota' and evaluating *er"orman&e% 2ow does the company-s sales force compare to competitor-s sales forces%

4r. 3ma Sankar (ishra, #ssociate rofessor, I5*S, S 6O7 # 3niversity, 55S)

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