Definition of Marketing Audit

The definition of marketing audit as stated by Abe Schuchman is as follows:

Marketing audit is a systematic, critical and impartial review and appraisal of the total marketing operation: of the basic
objectives and polices and the assumptions which underlie them as well as the methods, procedures, personnel and
organization employed to implement the policies and achieve the objectives.
Abe Schuchman gave this definition of marketing audit in his writings on its first extended discussions. He wrote this
discussion for the American Marketing Association (AMA) in 1951.


Meaning of Marketing Audit


The meaning of marketing audit is depicted in the following chart.

Marketing audit is an analysis, examination, review or evaluation of marketing activities of a company. It evaluates
marketing environment, objectives, plans, policies and strategies of a company. After evaluation, it identifies various
defects, vulnerabilities, deficiencies, problems, and other weaknesses encountered in the company's marketing activities. It
suggests measures and/or recommendations to overcome, solve or remove these limitations. It also seeks out new
marketing opportunities for a company. Overall, it tries to enhance (improve) the marketing performance of a company.
Marketing audit is an extensive, systematic, independent and regular examination process of a company's marketing
activities.
It is an extensive or comprehensive process because it covers all (entire) marketing activities of a company.
It is a systematic or methodical process since it strictly follows all involved steps or procedures properly.
It is an independent or autonomous process conducted by an external person. This person is not from the marketing
department of a company.
It is a periodic process because it is conducted continuously after some fixed interval of time.
Marketing audit is very beneficial for the success of a company. It examines, How well the marketing department of a
company works or functions. It compares the marketing plans of a company with its actual marketing performance. It
finds out the strengths and weaknesses of a company's product. It suggests measures to remove the product's weaknesses.
It guides a company to adapt its marketing strategies with the changing marketing environment. It helps a company to
update its marketing strategies and control its marketing expenses. In short, a company cannot survive without conducting
a proper marketing audit.
Additional topics on marketing audit are continued in the following articles:
Characteristics of marketing audit.
Types of marketing audit.
Methods of conducting a marketing audit.
Marketing audit evaluates the following three main (key) responsible areas:
External marketing environment : Here, the marketing audit mainly focuses on customers and competition in the business.
Internal marketing environment : Here, the marketing audit studies the structure of company's marketing team and its
effectiveness.
Evaluation of current marketing strategy : Here, the marketing audit continuously reviews current marketing strategy of a
company. It also takes help of lessons learned from its past marketing plans.


Explain the Characteristics of Marketing Audit


The eight important characteristics of marketing audit are depicted below.






The salient features or characteristics of marketing audit are as follows:
Marketing audit is a comprehensive study of all marketing activities.
It is a systematic-process that follows a step-by-step procedure.
It is a periodic activity and must be conducted regularly.
It is conducted by an independent person who is not from company.
It is a critical review of marketing activities of company.
It is an evaluation of marketing activities of company.
It finds out marketing opportunities and weaknesses of company.
It is a preventative and curative marketing medicine.
Now let's briefly discuss or explain each characteristic of marketing audit.


1. Comprehensive study


Marketing audit is a comprehensive or complete study of all the marketing activities of company. It studies the marketing
environment, marketing objective, marketing plans, policies and strategies, etc.


2. Systematic process


Marketing audit is a systematic process. It follows a step-by-step procedure.
It studies marketing environment.
It studies the internal marketing system.
It examines the marketing activities.
It finds out the problems.
It makes an action plan to remove the problems.
The main aim of marketing audit is to improve the effectiveness of marketing.


3. Periodic activity


A company must conduct a marketing audit regularly or periodically. It must conduct the marketing audit even if it has
no problems. This is because it helps the company to analyze the post performance and to make future marketing
strategies.
A company must not conduct a marketing audit only if it has problems or when it suffers a loss. It must be a compulsory
and not an optional activity.
Marketing audit is like a postmortem of failure.


4. Independently conducted


Marketing audit is independent. That is, it is conducted by an autonomous person. It is not conducted by a person who is
working in the marketing department. Mostly, it is conducted by an outside agency.


5. Critical review of marketing activities


Marketing audit is a critical review of marketing activities of the company. It finds out the defects, deficiencies, problems
and weakness in company's marketing activities. It also gives suggestions about how to remove these defects or
deficiencies.


6. Evaluates marketing activities


Marketing audit is an explanation or evaluation of marketing activities of company. It evaluates company's objective, plans,
policies, programs, etc.


7. Finds out opportunities and weaknesses


Marketing audit finds out the marketing opportunities and weakness of the company. It helps the company to take
advantage of the marketing objectives. It also helps the company to remove all its weakness.


8. Preventative and curative marketing medicine


Marketing audit is a preventative and curative marketing medicine. It prevents marketing problems. It also cures (solves)
marketing problems.












Methods of Conducting a Marketing Audit


Marketing audit is an examination of the marketing activities of company. It must be conducted by impartial
persons.
Auditors must be properly qualified, trained and experienced enough to do the audit. They must have a complete
knowledge and exposure of marketing.
Image below depicts the methods of conducting a marketing audit.

Following methods are used to conduct a marketing audit:
Outside auditor : Company appoints an outside auditor to conduct a marketing audit.
Task force audit : Company selects a team of its own senior executives to conduct a marketing audit.
Self audit : In this method, marketing manager of a company conducts a marketing audit.
Audit from above : Here, a senior executive of company (for example, a Director) is appointed to conduct a
marketing audit.
Now let's discuss, How is marketing audit conducted?


1. Outside auditor


In this method, the company can appoint an outside auditor to conduct a marketing audit. An outside-auditor
must be professional, a consultant or an agency.
Outside auditors conduct marketing audits for many companies. They have enough skills and experience. They
are also more independent, impartial and objective oriented. They give good suggestions for improvement.
Therefore, it is better to use an outside auditor.
Auditor studies information and submits a report to the company. The company has to pay him fees for his
services.


2. Task force audit


In Task Force Audit method, the company appoints a team of its own executives for conducting a marketing
audit. These executives are highly experienced. They conduct the marketing audit independently. They submit
their report to the top level of management.


3. Self audit


In Self Audit method, the company appoints the marketing manager to conduct a marketing audit. Here, the
marketing manager has to conduct a marketing audit himself. This is called self-audit. He has to critically-
examine the marketing performances. He has to find out the plus and minus points. Then he has to submit his
report to top level of management.
Self audit must be conducted impartially by the marketing manager.


4. Audit from above


In Audit From Above method, the company appoints a senior executive to conduct a marketing audit. This
executive is mostly a director or a person who has complete knowledge about marketing. This is a type of internal
audit.
It is always better to use an outside auditor for conducting a marketing audit. Internal methods have many
limitations and hence must be avoided.











Scope, Areas or Types of Marketing Audit


There are no fixed guidelines regarding the scope, areas or types ofmarketing audit. In other words, the scope of
marketing audit is not fixed. It changes from company to company. Each company can make its own marketing
audit plan. However, the scope of marketing audit must include the following areas or types:

The six important types of marketing audit are:
Marketing Environment Audit.
Marketing Strategy Audit.
Marketing Organization Audit.
Marketing Systems Audit.
Marketing Productivity Audit.
Marketing Function Audit.
Now let's discuss each main area or type of marketing audit.


1. Marketing Environment Audit


Marketing Environment Audit consists of the external environment of company. It includes natural environment,
economic environment, political environment, demographic environment, etc. The marketing audit analyses the
marketing consumer, competitors, suppliers, so on. This audit helps the company to make marketing strategies.


2. Marketing Strategy Audit


Marketing Strategy Audit is a critical analysis of marketing objectives and strategies. It finds out whether the
company's marketing objectives are clear and proper. It also examines the marketing strategies of the company.
This audit is done to find out the utility of the marketing strategies.


3. Marketing Organization Audit


Marketing Organization Audit is a systematic study of the company's organizational resources like manpower,
organization, structure, employee training and development, Research and Development facilities, motivation,
communication and working relations.


4. Marketing Systems Audit


Marketing Systems Audit finds out the company's ability of collecting and analyzing data. It looks for the
company's ability to plan and control the marketing activities. It also studies the company's marketing information
system, planning and control system, etc.


5. Marketing Productivity Audit


Marketing Productivity Audit finds out the profitability of the company's products. It examines the markets. It also
examines the measure to improve cost-effectiveness.


6. Marketing Function Audit


Marketing Function Audit is a complete study of marketing functions in relation to the product, price, promotion
and place of distribution. So, it is an audit of the marketing mix (4 P's) of the company.