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PART 1 Executive summary

The key finding 1. Accomplishments: What have we done well? 2. Disappointments: What did not happen as planned? 3. Critical Actions: To improve results what needs to be done the same/differently next year? The purpose of the audit see marketing audit elements  To help company understand how it relates to the environment in which it operates  To help company can identify own strengths and weaknesses as they relate to opportunities and threats  To support the market ing plan serves as a roadmap that guides the context and scope of marketing activities Scope of the audit The audit seeks to provide information on two key aspects of the marketing environment, the external and internal environment.

An external marketing audit covers issues such as economic political, infrastructure, technological, and consumer perspective, market size & structure; and competitors, suppliers, and distributors. And internal marketing audit covers aspect such as the companys mission statement, goals, and objectives, its structure, corporate, culture ,system , operation & processes, product development and pricing; profitability and efficiency, adverstising, and deployment of the sales force.

Schedule of Audit Activities 1. Identification 3-4 weeks

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2. Measurement 3. Collection

3-4 weeks 3-4 weeks 3-4 weeks

4. Analysis of all facts and opinions that affect a companys problem

Participants in marketing audit what people/position will be interviewed to get information The key includes 1. Director marketing 2. Executive marketing support manager, Marketing development manager, Marketing Information manager, Brand manager. 3. Product manager : National retail marketing manager 4. Sales manager

PART 3 Situation Analysis  Market: - The apparel market in Australia is well developed, More opportunities for niche markets for brand name products and upper/ mid range to high-end fashion. - Trends in Australia are current with global fashion trends. Source: http://www.buyusainfo.net  Customers: - Consumers knowledgeable, discriminating and selective. - Australian buyers attend major international collection releases and purchase directly from the shows. Australia is in step with the leading fashion countries.  Competitor: - Online retail occurring, they offers customized product  Distributor: - Department stores still account for a significant proportion of total clothing sales in Australia. This channel is dominated by two national chains, David Jones and Myer,

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PEST analysis to find out what are the changes happening from a variety of perspectives, Factor Political Economic Details in marketing plan - No elements expected to influence this time period -Low growth retail market overall due to buyer more likely to move to fashions based on harder-wearing traditional clothes -People will be more interested in traditionally inspired values i.e. realism, authenticity and certainty Finding - No elements expected to influence this time period -

Social

-the casual lifestyle and temperate climate in the populous Southeast portion of the country has meant that Australians spend far less on clothing -consumers and leading to an explosion of ''bad buys'' online. http://www.theage.com.au/national/jeangenie-your-number-is-upor-down20110527-1f8my.html#ixzz1O4AZS1FY - Internet has sped up trend awareness

Technology

Environment

-Internet usage is growing rapidly in traditional marketparticularly in youth market Natural environment is apparently interest such as fibres, bio-sustainability, indigenous culture., etc.

Natural environment is apparently interest such as fibres, biosustainability, indigenous culture., etc

Comments The demand for personalised products is growing, are giving DIY consumers what they want by letting them design exactly what they want. - They are a vertically integrated company performing manufacturing, distributing and retailing of their products themselves.

Competitor analysis audit Who are our major competitors and what are their strengths and weaknesses? MJ Miller Icon of Australia Thomas smith Wide range Blue Hills Quality apparel, T-

Product

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cloths, boots and accessories

country cloth and shirts for men, women and children

shirt, polo, skirts,tops and jumper

Price

Place

Promotion

Key message

Wider range product and good reputation brand (Source: survey 2011)

Porters 5 forces: traditional cloth product

Barrier to entry

The threat of new entrants to the apparel industry market leaders in the clothing and apparel industry are relatively low. This is mainly due to the fact that the big players superior financial resources greatly overpower the new entrants. The threat of substitute products for the clothing and apparel industry is non-existent purely because there is

Threat of product substitute

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no substitute for wearing clothes. Barring a huge technological breakthrough, in mainstream society everyone buys clothing from somewhere. This means that because there are no substitutes, the competition for the consumer clothing shoppers is that much more intense. Customer bargain power -In the clothing and apparel industry, the bargaining power of buyers is relatively large. As previously stated above, the cost of switching companies is nonexistent and as simple as walking from one store to another. -In addition, consumers do not see high-end clothing products as an essential commodity so, its price inelastic. Bargain of supplier -GRC control all components of the supply chain from power raw materials all the way to the customers shopping bag -For GRC in general, the power of suppliers is low merely because there are many different suppliers who are readily available to offer up their services. Competition a few of their main competitors target a very similar demographic. SWOT analysis Strength Details in marketing plan - Well-established own store distribution network -Good relationship with department store -Lack of direct distribution in some area -Small target market -limited number of serious competitor in current and new market. Finding -Low awareness among new target segment which it could effects sales growth of company -Customer have medium to low brand loyalty, easy to brand switching due to high competition. - Greatest success will be achieved from participating in the mid to upper price ranges in Australia, with a quality product that offers consumers a point of difference. -Global competition could attack company and market -Store brands movement is quick and they provide similar

Weakness

Opportunity

Threat

-Global competition could attack company and market

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product and quality. Comments

Marketing function audit Marketing mix Product Detail in marketing plan New market: GRC Range Star: Country casual range Cash cow: Traditional clothes, footwear. Dogs: None T A new life style concept casual wear retailer in a fair price Finding- interview & Questionnaire -For men products vary from denim jeans, belts, t-shirts, hooded sweatshirts and even shoes. -Need more effort to enhance brand acceptance as a manufactured overseas product. If GRC cost is high in relation to brand reputation, take note of new design elements, using a better quality fabric or adding a new design feature. How well are we supporting our distributors? A strong Aboriginal/outback theme. APP should participates in approximately two dozen trade shows annually to expand and enhance customer relationships, exhibit product offerings, and share new promotions with customers while low cost.

Price

Place

Promotion

Marketing audit Strategy Objective General corporate objective Performance targets/sales Strategy in marketing plan -Return on investment by 20% -Increase gross margin > 25% -Increase our direct retail sales 65% Objective being met

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objective Comments To reach mission and goal of widen range of GRC products including new market is Sales objective

Marketing organization audit

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The organization chart of Green River Clothing Company

Formal structure

Formal efficiency

Interface efficiency

How to improve relationship

Marketing system audit to find out that we achieving short- and long- marketing objectives? MKT info system What training or support is needed?

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MKT planning system Does everyone understand the marketing goals and various activities? What changes should be made to improve the results from our marketing and/or PR agencies? MKT control system New product development system initial, development, launch, evaluation

Organisations productivity audit (profitability and cost effectiveness) Profitability analysis what is the profitability by product, market and channel

Cost-effectiveness analysis Are there excessive costs associated with any of the marketing activities being undertaken by the business? Are there costs valid? Can they be reduced?

Reference: 1 www.mosbygrey.com/pdf/tips/marketing_audit_new.pdf 2 3 4 5 6

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This paper primarily provides the PEST Analysis of ABC Clothing Company in line with the planned expansion in international business operations. This provides insightful details regarding different factors of in the external environment that an organization must monitor. After which, this paper will attempt to select one of the most essential factors that must be given emphasis by the company in order to sustain their competitive advantage among their competitors for the foreseeable future. Further, this report will also outline the role of marketing research to support the company's decision making process.

International expansion is one of the main representations of business success as it suggests the companys ability to meet foreign market demands and supply resources needed for foreign operations. Financially, operating abroad can be demanding; in addition, the company would need to adjust a number of its standard operation in order to adjust to foreign business practices. In other words, there are many risks involved in global trade. As this business activity requires significant resource allocation, the companies must then ensure that they are capable of overcoming possible risks and will be able to achieve success.

One way of doing this is by analyzing the environment that the companies wish to invest on. It is important that business entrepreneurs are aware of the distinct features of each foreign setting; in this way, the investors will know how to address the risks in the most effective way. If for example the food company is from the West, establishing a branch in the Eastern section will naturally make western and eastern differences apparent. In ABC Clothing Companys case, the company has been

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operating successfully based on Western standards; as it aims to expand into newer international markets such as Asia, this concept applies very well to the company.

Foreign origins have distinct differences on various aspects like politics, philosophy, society and history. Hence, it is imperative that entrepreneurs understand their market prospects well. From this aspect, learning and adaptation are perhaps the two most important factors that should be present.

The Marketing Environment Todays market is characterized by highly competitive organizations which are all vying for consumers loyalty. Firms are faced with the challenge to maintain their own competitive edge to be able to survive and be successful. Strategies are carefully planned and executed to gain the ultimate goal of all: company growth. However, external factors are not the only elements which influence growth. There are also internal factors, components working within the organization which shape the direction of the company.

The companys marketing environment influences the business organization directly. This includes the suppliers that deal directly or indirectly to the people within the business organization, the consumers and customers who demand for the products or services offered by the company, and other local stakeholders who influence the decision-making process or affected by the business decisions made by the business firm. As such, the marketing environment of a particular company describes the relationship between firms and the driving forces that control this relationship who are

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members of a specific industry wherein the relationship is local and the firm may exercise a degree of influence. PEST Analysis Overview The environment we live in can be very volatile. All organization has its considered internal weaknesses and strengths, but the outside world will also have a major impact on the organizations future. PEST Analysis is a popular marketing management tool and method of examining the many different external factors affecting an organization. The acronym PEST stands for the following: Political, this is the current and potential influences from political pressures; Economic, the local, national and world economy impact; Sociological, the ways in which changes in society affect the organization; and Technological, the effect of new and emerging technology.

Since the company is offering clothing designs for all ages which depend on the needs and demands of their customers, there are some external factors that the company must consider in order to stay in the competitive world of business. The following are some of the factors within the external environment that the management of the company must consider.

Political (Legal) Aspects A company will not be able to gain success, good reputation and trust if it will not

consider legal and political sector as part of their strategy. Political and legal sectors include the needs of the company to follow the given policies and regulations of the government in order to be considered as legal and authorized business company. In this manner, ABC Clothing Company should be able to consider political and legal

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aspects so as to show that they value the policies and regulations of the government in any of the business operations.

tax policy employment laws political stability environmental regulations trade and tariff restrictions Economic Aspects

It is important that a certain company must also give enough attention to its economic stability. The economic goal of a certain industry is like an axis in which other objectives or goals are revolving. The economic factor involves the context in which an industry belongs, i.e. the configuration of the competition in which a company operates the active demand of the products, general economic condition of the nation or region, conditions in relation with other industries, and the situation of the resource markets.

economic stability economic growth interest rates inflation rates exchange rates Socio-cultural Sector

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Society and culture is an important factor that must be given emphasis by any business, specifically those who are operating in the global arena. It is important that the company must operate in compliance with the social systems in order to gain good reputation and effective public image. On the other hand, cultural aspects is equally essential, in order to understand the various needs of different individuals that belongs to different cultures.

population growth rate age distribution career attitudes consumer behavior religion and culture itself Technological Aspects

The complexities of achieving business success through increased efficiency, effectiveness and competitiveness, combined with innovative applications of modern technology, has heightened the awareness of both technology and business managers towards more strategically oriented approaches for planning and management of any industry. Hence, it is important that a company must be able to give consideration to the technological aspects.

distribution and communication channels technology incentives automation rate of technological change

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environmental and ecological aspect barriers to entry production level outsourcing decisions

Emphasis on Economics The marketing concept has been defined as the key to achieving organizational goals and the marketing concept rests on market focus, customer orientation, coordinated marketing and profitability. In a profit making business the firm obviously has to try and achieve this level of customer satisfaction as a way of staying ahead of the competition and making a profit. Traditionally, marketing has been utilized by the private sector in decisively increasing the capabilities of an organization. Marketing can be considered as one of the most important element underpinning successful business creation. The importance of marketing concept incorporates oft-repeated elements such as: customer orientation; integrated marketing efforts; and resultant profitability.

In marketing operations, the marketing manager must have the ability to strategically decide the most essential external environment factors to be monitored in order to sustain the competitive advantage of the company in the future. In the case of ABC Clothing Company, the marketing manager of the company should give focus on the economic aspects. As mentioned, economic aspects includes the possible conditions needed in order to gain competitive advantage within the

marketplace. Economic sectors include all the possible factors that drive an industry to know where it belongs such as the condition of its competitors, entire economic situation of the region and nation in which the company is operating. In this particular

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case, ABC Clothing Company is operating in different areas or regions of the world, including Asian market.

In this manner,

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Just like what big as well as small multinational companies that are operating globally. Herein, the marketing manager should be able to monitor the economic status of a certain country where the company is currently operating or the economic status of a country in which the company would plan to operate in the future. It is said that if a country with a good economic status or which is economically stable, there is possibility to gain more customers which would avail the quality products offered by the company.

Industry Analysis Companies in the industry sell to a few large customers/buyers. Likewise, the industry also displays an apparent impracticality for customers/buyers to switch from one source of supply to another. This is reflected by the cost of raw materials as well as the costs of operations. Moreover, the products offered by companies in the industry are essentially interchangeable and indistinguishable. The product could also be considered as a commodity for the retail industry especially in the clothing business. Moreover, the industry shows that the cost of the product and service represents a relatively large percentage of the buyers and customers total cost. Nonetheless, the customers could if desired backward-integrate specifically by acquiring a company in the industry to which is included. The following are micro-environmental aspects that are necessary to consider.

Suppliers Power Many suppliers provide raw materials to the industry. Moreover, companies in the industry are not likely to backward-integrate. On the other hand, it could also be posited

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that the companies in the industry are the primary source of revenues for the suppliers. This makes the competition among suppliers more rigid. Likewise, if raw -material costs get out of line, companies in the industry would be able to have a hard time using a different type of raw material to produce the product. The industry is also characterized with the quality and costs of raw materials having a significant impact on the quality and price of the products and services produced by the industry.

Moreover,

the

raw

materials

provided

by

suppliers

are

essentially

interchangeable and indistinguishable. The raw materials are essentially commodities. Likewise, in an industry where loyalty is also considered necessary, there is also the possibility for the suppliers to forward-integrate.

Rivalry Among Competitors Companies in the industry considered to be diverse in their history and culture and in how they do business. Moreover, the product/service sold by the industry has low storage costs or is not perishable. Nonetheless, the industry is experiencing fast market growth.

The

products

offered

by

companies

in

the

industry

are

essentially

interchangeable and indistinguishable. It has also been established that the product provided by the company is a commodity to a major part of its stakeholders. Moreover, it also shows that there are considerable numbers of large competitors that dominate the industry.

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In the said industry, companies in the industry have high fixed costs and spend a lot of money on plant and equipment. Likewise, production capacity, to be economically feasible, must be done in large, expensive increments. Significant barriers as well hinder companies that want to exit the industry. These include regulations, labor agreements, costs of closing facilities, and the absence of secondary market for assets. In addition, it could also be observed that staying in the industry is of great strategic importance to companies in the industry, probably because they have nowhere else to go.

Threats of New Entrants The economies of scale play a significant role in the cost of produce the product and service. Companies in the industry have low fixed costs and spend relatively little on plant and equipment. Moreover, competitors in the industry are not likely to cut their price to defend their market position. In an industry experiencing fast market growth, patents, proprietary knowledge, and brand reputation are also considered as barriers for companies entering the industry.

Threat of Substitute Products The price of substitute products is more expensive. This provides the industry a great following. Moreover, the quality, features and benefits of substitute products are generally lower.

The Role of Marketing Research in Decision Making Process The structured method of marketing research has enabled countless of producers and consumers alike to better understand their relationship. Generally, the

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role of marketing research in every business environment is to provide information that are necessary in the decision making processes for the development and benefit of the company.

There are numerous studies conducted to verify the potential effects of information in business environment obtained through marketing research. The value of information in decision making is proven especially in enhancing performance, reducing uncertainty, and processing business plans. The information collected through marketing research, may it be qualitative or quantitative in nature is essential in the overall being of the company.

Furthermore, there are other several experimental studies that have proved that marketing research is indeed an important element in companies' success formulae. give evidence that the level of use of marketing research is positively related to company effectiveness. Every effort exerted in the research process is justified when the by-product is the optimal performance of the business. In the same way, that more successful companies carry out marketing research, in sharp contrast to less successful companies. Focusing on small firms environment, found a positive relationship between the use of environmental information and small firm financial performance.

Decisions based on marketing research information are an important factor in overall business success. These studies show the linkage of marketing research and companys performance. Again, the role of marketing research in the decision making process of the company is to provide imperative information that is very vital in the

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growth, success and survival of the marketing course of the product in relation to the business as a whole. Conclusion The results of the PEST analysis carried out on the macro-environment of ABC Clothing Company indicated very significant effects for the industry and company itself. Therefore, one could conclude that the international expansion of ABC Clothing Company is expected to be feasible and grow faster than average. Regardless of current trends and unpredicted circumstances, the company is now ready for the implementation of plans.

In relation to the role of marketing research in decision making processes of the company, it could be considered that marketing research is undeniable one of the most important tool in starting a business. Thus, its role is indispensable in the process of business expansion especially to the case of ABC Clothing Company who is now ready for international take-off of its operations and products.

Read more: http://ivythesis.typepad.com/term_paper_topics/2008/02/pest-analysiso.html#ixzz1O4ZLtaaU