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"BUSINESS
INSIGHTS”
An Occasional Newsletter
to our Clients, Readers, and Friends
FINDING
HIDDEN PROFITS USING A MARKETING AUDIT
“Half the money you spend on marketing is wasted
The trouble
is: you don't know which half."
William Lever founder of Lever Brothers (1885) now Unilever PLC
Are you getting all the sales you should?
Are you prepared for a possible economic
downturn?
Are you getting the biggest bang for your
marketing dollar?
Are you taking advantage of available
international opportunities?
Are you taking advantage of new methods of
reaching your markets?
Are your marketing objectives in tune with fast changing markets and customers?
If you cannot answer
yes to all six questions, you are not receiving a satisfactory
return on your investment in marketing. Most companies wait until
they see their sales and profits decline before they launch an
examination of their marketing efforts and, by this time, they are
scrambling for solutions. The
best time to prepare for a potential downturn in sales is before it
happens, while you can still act to maintain you’re hard won gains.
A
marketing audit is a comprehensive, systematic examination of a
company’s marketing organization, strategies, tactics, objectives,
and activities. A marketing
audit enables senior management to discover your organization’s
strengths and weaknesses in relation to opportunities and threats
you face in the marketplace, and pinpoint more effective uses for
your marketing resources. A good marketing audit is:
Systematic.
It follows a logical, predetermined framework - an
orderly sequence of diagnostic steps.
The marketing audit will indicate improvements needed to
accomplish your company’s goals.
An audit results in a comprehensive action plan to
address short and long term marketing needs of the company.
Independent.
Audits where managers complete a checklist lack objectivity and independence; the best audits come from outside
consultants who are objective, have broad exposure in a number of industries, and some familiarity with your industry.
A marketing audit begins with a meeting between
the company’s senior management and the individual conducting the
audit. They decide on the audit’s objectives, report format, timing,
and other matters. The individual performing the audit then reviews
business plans, company financials, organization charts; interviews
management, tours facilities, visits/interviews customers and
competitors; analyzes marketing budgets, product costs and sales.
The following is a sampling of topics treated in a marketing
audit:
Economic – What does the company expect in the way of inflation, raw material availability, labor, unemployment, credit, etc. What effect will forecasted trends have on existing and planned strategies, both domestically and globally?
Macro Environment – What major changes are occurring in product and process technologies? What are the major generic substitutes that could replace you product or service? What laws are pending that may affect marketing strategies and tactics? What is the public's attitude towards your industry, your products and your firm? What changes in consumer lifestyles and values could influence your target markets and/or marketing methods?
Markets – What is happening to your market size, growth and profits? What are your major market segments, their expected growth rates and which segments provide you with the greatest opportunity to meet your objectives? What is the global potential for your product?
Competitors – Who are your major competitors (domestic and international) and what are their objectives and strategies? What are their trends in market share and size? What are the trends for your product's substitutes and your future competition?
Distribution - Which channels are the most efficient and have growth potential?
Supplier - What is the outlook for key resources needed for production? What are the trends occurring among your suppliers?
Marketing Organizations
Inter-company Communications – Are there any problems between marketing and manufacturing? R&D? Finance? Purchasing? International units?
Marketing Systems
Marketing Information - Is the marketing intelligence system procuring accurate,
timely, and sufficient information? Do decision makers use
marketing research information?
Is customer satisfaction effectively measured?
Are the results used? Is a global information system in
place?
Marketing Planning -
Is the marketing
intelligence system
well-conceived
and effective? Are the
forecasts soundly based?
Are sales quotas effectively set?
Marketing Control
-
Are control procedures adequate to
insure that the annual plan objectives are being met?
Are product profitability, markets, and distribution
channels periodically analyzed?
Are marketing costs reviewed?
Are marketing dollars effectively allocated across the
marketing mix?
New Product/Service Development – Is the company organized to identify, screen, and develop new product/service ideas? Does the company do adequate market research before investing in a new product/service? Does the company do adequate market and product/service testing before product launch?
Market Productivity
Profitability Analysis
– What is the profitability of
the company’s products, services, markets, sales territories,
and distribution channels?
Should the company expand, enter or withdraw from any
business segment? How do you compare to your competition?
Cost Effectiveness Analysis – Do any marketing activities seem to have excessive costs?
Price – What are the pricing
objectives, policies, and strategies? Are prices set on sound
costing, customer demand, and competitive criteria?
Are the company’s prices in line with the product’s
perceived value in the market? Is the international pricing
competitive in each country?
Distribution
– What are the distribution objectives and strategies?
Is there adequate market coverage?
Sales Force – What are the sales force’s objectives? Are they realistic? Is the sales force large enough, well motivated, properly trained? Do they have high morale? Are the procedures for setting quotas and evaluating performance adequate? How is the sales force perceived in relation to the competition?
When the marketing audit is completed, it will be
the basis for developing comprehensive corrective action plans to
improve your overall marketing effectiveness.
Senior management will gain an independent,
objective view of their firm’s marketing performance.
The assessment of the firm may lead to an
entire reevaluation of the company’s direction, not just a
fine-tuning of current marketing efforts.
The marketing audit will help management set priorities for the marketing programs. The auditor can help management focus on important changes, while avoiding the political struggles that hinder change.
The best time to prepare for the future is now.
About the Author: Ken Wilson: Strategist, marketing guru, educator, facilitator, author, university lecturer and consultant, he can be reached at ken@wmg-mn.com or 763-476-2216
Copyright ©2019 by Ken Wilson All rights reserved.