MARKETING AUDIT

DEFINITION

A strategic approach to review marketing environments, objectives & activities in todays evolving market.. The best way to review, evaluate and improve the marketing function is to undertake a marketing audit
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a Comprehensive, systematic, independent, examination of the companies environment, objectives, strategies, and activities to determine problem areas and opportunities and to recommend a plan of action to improve the companies marketing performance It covers all major marketing areas, not just a few trouble spots
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It is a evaluation of the effects of alternatives before a decision is reached It is the practice of preventative as well as curative marketing medicine Will measure marketing effectiveness across all areas of the business by questions. Will highlight decisions to be made
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WHY MARKETING AUDIT?

Identifies weaknesses
Suggests ways to eliminate Capitalise on successful operations Anticipate future situations Covers all business areas

Findings can surprise & shock

Improves marketing performance
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Characteristics of Marketing Audit

Comprehensive- The marketing audit covers all the major marketing issues facing an organization, and not only one or a few marketing trouble spots. The latter would be called a functional audit if it covered only the sales force, or pricing, or some other marketing activity.

Systematic- The marketing audit involves an orderly sequence of diagnostic steps covering the organization's marketing environment, internal marketing system, and specific marketing activities. The diagnosis is followed by a corrective action plan involving both short-run and long-run proposals to improve the markets.

Independent- The marketing audit is normally conducted by an inside or outside party who has sufficient independence from the marketing department to attain top management's confidence and the needed objectivity. Periodic- The marketing audit should normally be carried out periodically instead of only when there is a crisis. It promises benefits for the organization that is seemingly successful, as well as the one that is in deep trouble.
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Audit preparation
Agree dont stop looking for answers Agree no personal attacks, hidden agendas vendetta's. Determine how to handle Gross negligence when found. Focus on information accuracy. Team talk before starting, during and end. No half baked decision results until finished audit.

The marketing audit micro/macro

The economy and environment: history, economy, government, demographics, culture, e-commerce, technology Short/Long term markets Profitability, economic Buying habits Product Life cycle Marketing Control

Components of Marketing Audit

Marketing Environmental Audit

Marketing Strategy Audit

Marketing Organization Audit

Marketing System Audit

Marketing Productivity Audit

Marketing Functions Audit

MARKETING AUDIT TOOLS AND TECHNIQUES SWOT Analysis

Internal
Strength Weakness

SWOT

Opportunity

Threats

External

PEST Analysis
P Political

E Environment

PEST analysis
S Social

Technological

Five Force Analyses

Buying power of customer

Buying power of supplier

Rivalry among competitor s

Threats of substitute products

The marketing audit social criticisms

High prices
Poor quality Dangerous Misleading advertising claims

Deceptive practices
Planned obsolescence Poor service High pressure selling
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The marketing audit resources

People? Equipment?

Technology?

Systems?

Time?
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The marketing audit Distribution

Customer service Costs expectations

Efficiency levels
Alternatives

Channels

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The marketing audit information

Internal records Market intelligence Systems Market research Quality control Information analysis Reviews planning
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Types of marketing audit

The External Marketing Environment

The Internal Marketing Environment

A Review of our Current Marketing Plan

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External Audit
External factors can be split broadly into three groups,
Economic environment, Competitive environment Own market environment.

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The Economic Environment

Political Government actions, tax levels, privatization, schools policy etc Economic Income levels, employment levels, rate of inflation, rate of economic growth Social and Cultural Demographics (population growth/distribution, age), lifestyles and cultural values (changing beliefs, skills, family values) Technological IT, internet, home shopping Legal UK Law (health & safety, employment law, store opening etc), EU Law Environmental Affect of your business on environment, 'green' credentials

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Competitive Environment
The threat of new entrants to your industry The threat of substitute products The bargaining power of customers The bargaining power of suppliers The rivalry amongst current competitors Who are your competitors? Who are your major competitors, how big are they, what is their market share? What reputation do they have? How do they distribute their products, what are their production capabilities? What is their marketing like - do they diversify? What are their key strengths and weaknesses?
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The Market Environment Total market size growth and trends Market characteristics, growth and trends Products, prices Physical distribution channels Customers/consumers Industry practices

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Internal Audit This is your opportunity to put your own business under the microscope - do you know as much about your own situation as you should? Sales (total, split by geography, industry, customer, product) Market shares Profit margins Costs Marketing information research Effectiveness of marketing mix Key outcomes from this audit can then be summarised in the Current Market Position and Market Overview sections of your marketing plan.
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CASE STUDY MARKETING AUDIT

Nike is the leading footwear company in the world. PEST Analysis sums up how the company's business strategies fare in the macro environmental level.

PEST Analysis of Nike Nike, being an international organization, needs to focus on macro environmental factors. Macro environmental factors comprise Political, Economics, Society, and Technology, viz, PEST Analysis.
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Political Analysis The government must create economic policies that will foster the growth of businesses. Nike, fortunately, has been helped by the US policies which enable it to advance its products. The support accorded to Nike by the US government, particularly in the general macroeconomic stability, low interest rates, stable currency conditions and the international competitiveness of the tax system, form the foundation critical to Nikes growth.
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Economic Analysis In economy, the biggest threat for Nike would be economic recession. During recession, Nikes growth will be adversely affected. The US economy is experiencing a downturn right now. Consumer purchases are slowing down. Currently, Nike's feeling the pinch of the economic recession. The Asian economic crisis also affects Nike since its goods are manufactured in Asia. The labor costs and material prices are going up. Nike's growth is not just affected by the local economy but also in the international economy. A weak Euro and an Asian recession could mean weak sales for Nike. The overall results in the sales generated by Nike in athletic footwear, however, remained stable. The global market makes up for the variances in sales particularly between peak and lean seasons.
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Society Analysis People are more health conscious nowadays. Diet and health are getting more prominence. Consequently, more and more people are joining fitness clubs. There is an accompanying demand for fitness products particularly exercise apparel, shoes and equipment. Nike is at the forefront of this surge in demand as people are looking for sports shoes, apparel and equipment. Nike, however, failed to foresee problems brought about by a sweatshop expose pertaining to labor and factory conditions at production locations in Asia. This caused bad publicity and declining sales as society and consumers demand more socially responsible companies.
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Technology Analysis Nike uses IT in its marketing information systems very effectively. Nike applies marketing information systems to the economics of innovation, segmentation and differentiation for most of its businesses. Nikes leadership status owes in large part to the use of extremely valuable Information Technology, and applying it to every aspect of the product from development to distribution. Nike, being the world leader in the athletic footwear industry, is able to effectively harness its environment to boost its marketing efforts. This strategy has translated into robust sales of Nike's products.
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