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ILSC Business College

CONDUCT A MARKETING AUDIT



Project

Business Report: Sartos Gourmet Pasta


June 2014

Prepared for: Mario Sarto

Prepared by:


ILSC Business College
213 Adelaide St 4000
BRISBANE
QLD
Australia

Contact: Dott.ssa Caterina De Filippo










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TABLE OF CONTENT


1. Introduction 3
1.1 Purpose 3
1.2 Background 3
2. Marketing Audit 3
2.1 External Audit 4
2.2 Internal Audit 11
3. Marketing productivity 13
3.1 Profitability 13
3.1 Cost effectiveness 13
4. Conclusion and recommendations 14











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1. Introduction

1.1 Purpose

The aim of the audit is to verify if the objective planed in the marketing
plan have been reached and if not to review them and the marketing
strategy.

1.2 Background

Sartos Gourmet Pasta is consider the leading gourmet pasta
restaurant in Graceville, leveraging the rapidly developing consumer
demand for pasta and a growing customer base. The signature line of
innovative, premium, pasta dishes include pesto with smoked salmon,
pancetta and peas linguini in an alfredo sauce, and fresh mussels and
clams in a marinara sauce. Sartos Gourmet Pasta also serves distinct
desserts and beverages including alcohol.
Sartos Gourmet Pasta is reinventing the sit-down and home-delivery
pasta experience for individuals and families, with high discretionary
income by selling high quality, innovative exotic products at a reasonable
price, designing tasteful, convenient locations, and providing industry-
benchmark customer service.

2. Marketing Audit

The marketing audit is a review or appraisal of the existing marketing
activities. Carrying out the marketing audit provides the opportunity to
review and appraise your whole marketing activity, enabling you to assess

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past and present performance as well as to provide the basis for
evaluating possible future courses of action.
Because the business environment is constantly changing, the marketing
audit should be used as a reference tool, with constant updates reflecting
changes in the external environment and in the internal business
experiences.


2.1 External Audit

External factors can be split broadly into three groups:
the economic environment
the competitive environment
the market environment
Consider these areas from Sartos Gourmet Pastas point of view it will be
stated if any changes have an impact on the business, if they will affect the
competitors.

Five Forces Analysis

In order to conduct the external marketing audit the Five Forces
Analysis was used. This method helps the marketer to contrast a
competitive environment. It has similarities with other tools for
environmental audit, such as PEST analysis, but tends to focus on the
single, stand alone, business or SBU (Strategic Business Unit) rather than
a single product or range of products.
The Competitive Rivalry is the most likely to be high where entry is
likely; there is the threat of substitute products, and suppliers and buyers
in the market attempt to control. This is why it is always seen in the center
of the diagram.
The Five forces analysis looks at five key areas namely:
1. The threat of entry:
time and cost of entry
specialist knowledge required
economies of scale

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cost advantages
technology
barriers to entry
2. The power of buyers:
number of customers
size of orders
differences between competitors
price sensitivity
ability to substitute products
cost of changing products

3. The power of suppliers:
numer of suppliers
size of suppliers
uniqueness of service
ability to substitute products
cost of changing suppliers
4. The threat of substitutes:
substitutes performance
cost of substitution
5. Competitive rivalry:
numbers of competitors
quality differences
customer loyalty
cost of switching
cost of leaving market

FIVE FORCES ANALYSIS
1.The threat of entry:
Stating the fact that Satos is not a new
company right now there are not threat of
entry
2.The power of buyers:
The power of customers is not strong as it
should be even if the population and the
target is growing.

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FIVE FORCES ANALYSIS
3.The power of suppliers:
The number of suppliers it is overall good
knowing that the price have not increase in
the last year
4.The threat of substitutes:
The threat of substitute is really high
because nowadays that are a lot of different
companies which offer the same products
like delis and supermarket with pasta bar.
5.Competitive rivalry:
Sartos competition is really high, the
business has several local competitor and
national competitors.

Macro-Environment Factors ( PESTEL Analysis


Demographic Factors
As showing in the marketing plan the
population is growing 10% per years
which will have a positive impact in profit
if Sartos can reach new customers and
transform them in loyal costumer.
The total targeted population is estimated
at 46.000
The segment of the ages between 25-50,
is the one which counts 53%of the
Graceville market according to the
Graceville Chamber of Commerce.
It is important to consider also the
behaviour factor which considers that
people like to enjoy quality meal without
spending time of making it themselves.

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Economic Factors In order to understand the situation it is
important to look at the following
statements:
the current levels of credit availability are
decreasing which will create more
disposable income and more money
available for families to dine out.
the unemployment levels are still the
same currently remain at 5.1% but will not
be threat to potential sales.
Technological Factor Nowadays technology is very important for
a business success and it feels that Sartos
it is not adjusting well to technological
changes. Customers required an online
ordering site but they still just take phone
orders.
Social Factors It was discover that Sartos image is not
want the company wanted to state. Their
pasta is seen as not an healthy choice and
they should provide more healthy choice
which now healthy is a social concerned.
Political- Legal Factors As a company a few legal factor have to be
consider such as: food standards and
safety standard. In addition, the
government is looking towards work/life
balance legislations which could have an
impact on Sartos business activity.








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Micro-Environmental Factors

Market
As previously mentioned the population is
growing 10% per years which will give
Sartos can reach new customers and
transform them in loyal costumer.
The government has not yet built the
Park & Ride parking area that was
promised. They have stopped the project
to another year which had a massive
impact on Sartos business because
customers had troubled parking at nigh.

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Customer
needs
According to the focus group, the gathered
informations states the following founding:
want
convenience products and more healthy
options.
Take away and eat at home was the
preferred dining option rather than eat
out.
Pasta products should be designed to be
low fat. Tomato-based sauces rather than
cream.
Customers want to order via the internet
and not be stressed out by the phone
system with its delays and difficult to
understand accents and noise.
Customers prefer fewer flyers which they
saw as junk mail, and the flyer should be
more informative about the ingredients
and offer a full menu.
Some customers questioned the ethics of
Sartos Gourmet Pasta, who charged
more for delivery into the neighbouring
gated estate than to every other home
delivery customer.

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Competitor Talking with the owner, it was collected that
Sartos currently has 2 powerful
competitors, which are:
Stellas - a local restaurant which has 30
seats outdoor eating area. From
observation it was records that the
business was full for every meal time.
Pasta Bite - franchise chain which has
opened in the nearest suburb giving the
locals a new choice where to eat pasta.
Suppliers It was found that Sartos has build a strong
and loyal relationship with vendors which
offers high quality ingredients and
fast/frequent delivery schedule.
Distributors




















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2.2 Internal Audit

Existing research data

During the interview of the sales and promotion specialist Adriana
Como, the following informations were gathered:
she also worked as a kitchen supervisor (most of the time)
a large amount of research was available on the restaurant association
monthly magazine but Mario, the owner, never decide to look at.

Internal sales data

Interview the accountant Eric Yeung, the following was discovered:
pasta gross profit was only 45%
huge increase in flyer unit cost due to Marios advertising strategy
reading Sartos tax return was found that the scheduled budget and the
real budget did not match
take away revenue has increased 23.000 and the number of families has
decreased to 38.000
take away is growing but not for the families that Mario has target with
his Bmag campaign

Funcional efficiency

With the help of Adriana Como it was stated that the phone order
system was build in the kitchen near the cooking area which made not
very functional. In fact, they had communicating issues because there was
no coordination between the timing of the promotional flyers and the stock
purchasing and preparation of the advertised food.






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Internal Interface

Due to the previous issue, during the survey was discovered that
most people commented that They may be great cooks, but they dont
know how to handle telephone sales. To sum up, the currently greater
issue is to update the phone order system. Firstly it is essential to replace
it at the reception and further more it would be best to embrace the online
order system.

Marketing Information

In order to understand the marketing situation Eric Young, Sartos
accountant, explained that Sartos did not invest in market research
because it was considered too expansive. In this way, the staff members
just look at the tax figures and finances of the business and make their
own sales forecast (based on their feelings and not logical knowledge).
As previously mentioned, a several amount of research was
available buy the restaurant monthly magazines but Mario never consulted
it.

Planning and control

As stated earlier, Sarto did not have any market research done.
Another reason for that is that Mario believed that giving away free
samples of new products in order to test them would be too expensive. So
Mario himself tested the new productive which caused a lack of objectivity.









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3. Marketing productivity

3.1 Profitability

Gathering financial information through Sartos finance books and
tax return, it was found that the actual revenue did not reach what it was
expected in the marketing plan.
take away revenue has increased to $ 23.000
families has decreased to $ 38.000 from the budget
the business is considered not profitable
The following charts represent the information about the business
tax return preparation:

SEGMENT BUDGET - 2009 ACTUAL - 2009
Individuals 120.000 121.000
Groups 150.000 112.000
Take Away 180.000 203.000
TOTAL 450.000 436.000



3.1 Cost effectiveness

Interviewing the account it was found that there was a big increase in
the flyer unit cost due to Marios latest advertising strategy. From the focus
group it was understood that the customers saw those flyers as junk mail
and did not appreciate them. In addition, the informations on the flyer were
not precise and people would like to read about menus and food
ingredients which were not stated at all. Nowadays people care about
healthy choices and low fat food.




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4. Conclusion and recommendations

In conclusion, Sartos Gourmet Pasta should revisit not only their
marketing strategy but also their products and service.
The recommendations are the following:
do marketing research
update the phone system: relocate it and add the online service
use more magazines adds as advertising strategy ( no more flyers)
more collaboration between the staff member (currently lack of
communication)
change market objective
change the menu to healthier options