MARKETING MANAGEMENT

THE MARKETING AUDIT

Learning outcomes

Understand the development of the concept of the marketing audit its usefulness in marketing strategy and marketing tactics Understand purpose of the audit and its importance to performance Explore the characteristics of the audit and link to business needs

CONTENTS

DEFINING THE MARKETING AUDIT PURPOSE OF THE MARKETING AUDIT 4 CHARACTERISTICS OF THE AUDIT GOAL FORMULATION STRATEGIC FORMULATION PROGRAMME FORMULATION & IMPLEMENTATION FEEDBACK & CONTROL

DEFINING THE MARKETING AUDIT

Is a comprehensive ,systematic, independent, and periodic examination of a companys or business units marketing environment, objectives, strategies & activities.

MARKETING AUDIT
PURPOSE View to assessing problems areas or weaknesses, opportunities & recommending a strategic plan for action to improve the companys marketing performance

4 CHARACTERISTICS OF MARKETING AUDIT

1.

COMPREHENSIVE - covers ALL aspects of the business. So not just trouble areas. Unlike the Functional audit which would only cover the sales force or pricing etc. More effective in locating the real source of the problem.

4 CHARACTERISTICS OF MARKETING AUDIT

2. SYSTEMATIC the marketing audit is an orderly examination of macro marketing environment and micro marketing environments. Marketing objectives & strategies, marketing systems and specific activities.

Cont.
Indicates the most need improvements these are incorporated into a corrective action plan include both short and long term steps for improving all round effectiveness.

4 CHARACTERISTICS OF MARKETING AUDIT

3. INDEPENDENT - ,FREE FROM
CONTROL BY OTHERS. The best AUDITS come from outside consultants objective , board experience in various industries or specific or some industry knowledge. Plus the time and attention to give to the audit.

cont
1. 2. 3. 4. 5. 6.

Audits come in 6 types Self audit Audit from across Audit from above Company auditing office Company task force audit Outsider audit

4 CHARACTERISTICS OF MARKETING AUDIT

4.

PERIODIC - Typically audit are after, a down

turn in sales or profits, sales force morale has fallen, and other problems occur

A periodic marketing audit can benefit companies in good health as bad corporate health Generally companies wait till when they are in crisis to conduct an audit

Marketing audit

Starts with:Meetings between the companys officers and the auditors to work out the audits

1.

Objectives Coverage Depth Data Report format Time frame

6 COMPONENTS OF MARKETING AUDIT

1. 2. 3. 4. 5. 6.

Marketing Marketing Marketing Marketing Marketing Marketing

environment audit strategy audit organisation audit systems audit productivity audit functions audits

PROGRAMME FORMULATION & IMPLEMENTATION

The resulting profile exposes weakness and strengths highlighting problems or opportunities, with a view to the company becoming an outstanding player in the marketplace.

FEEDBACK & CONTROL

As strategies are implemented a company need to detail and record results then monitor new developments or new opportunities

Micro/competitive environment
Market entrants Barriers Bargaining Competitive rivalry power to entry Bargaining Buyers power

Suppliers

Substitute goods

Macro environment

Political/legal Economic/competitive Socio/cultural Technological

Environmental types - The Miles Framework

1. What degree of complexity exists in the environment? 2. How standardised or routine are the organisations interactions with its environment? 3. What interconnections exist between the various dimensions of the environment?

Types of Environment

Simple/static Dynamic Complex

Environmental Analysis

Audit the environment Assess its nature Examine specific factors Identify own position Assess how environment will affect organisation Decide future strategic position

Types of environmental information

Market Tidings

Broad issues

structure, industry competitors, customers leads for mergers, JVs and acquisitions licenses, patents, processes etc.

general conditions and trends suppliers, resources

Acquisition leads

Other tidings

Technical tidings

Micro/competitive environment
Market entrants Barriers Bargaining Competitive rivalry power to entry Bargaining Buyers power

Suppliers

Substitute goods

Strategic Groups

Organisations within the same industry that are pursuing equivalent strategies. Organisations targeting groups of consumers with similar products. Provides basis for competitor analysis by focusing on most relevant competitors.

Attributes identifying Strategic Groups

Size Assets and skills Scope of operations Breadth of product range Choice of distribution channel Brand image Relative product quality

Strategic groups in the airline industry

KLM British Airways Air France Brittania Air 2000 Monarch

Easyjet Ryanair etc.

Global

eci r P
Regional

Scope

Competitor analysis
Goals Motivation Response to challenge Vulnerable areas Likely directional shifts What provokes them Assumptions How realistic? Strengths and weaknesses Current strategy & performance

Thoughts of Chairman Porter

Competition in an industry is rooted in its underlying economic and competitive forces that go well beyond the established competence in a particular industry.

Vulnerability

Financial factors Market factors Product factors Organisational factors

The Innovation Audit

Conclusion

DEFINING THE MARKETING AUDIT PURPOSE OF THE MARKETING AUDIT 4 CHARACTERISTICS OF THE AUDIT GOAL FORMULATION STRATEGIC FORMULATION PROGRAMME FORMULATION & IMPLEMENTATION FEEDBACK & CONTROL