MARKETING AUDIT
The first formal step in the marketing planning process is that of conducting the markerting audit. Ideally during producing the marketing plan, this will involve bringing together the source material which has recently been collected throught the entire year. Within the normal work of the marketing department.
Kotler define marketing audit at lenght as a systematic, independend, comprehensive and periodic study of a company's or business units markerting environment, objectives, strategies and activities with a view to determining problem areas and opportunities and recommending an idea of action to enhance the company's marketing performance.
It ensures that those who'll have to implement the results of the look process understand and are commited to, the assumptions which lie behind it. A marketing audit should be as explained in the definition
1. Comprehensive
The marketing audit covers all the major marketing activities of an business. It should be called an operating audit if it covers only the saleforce, pricing or various other marketing activities. A comprehensive marketing audit is usually far better in seeking the real source of problem.
2. Systematic
The marketing audit is an orderly examination of the organisation's macro and micro marketing environments, marketing objectives and strategies, marketing systems and specific activities. The audit indicates the most needed improvements, incorporating them into a corrective action plan with short and long-run steps to improve overall effectiveness.
3. Independent
Marketers can conduct marketing audit in six ways and they are self audit, audit from across, audit from above, company auditing office, company task-force audit and outsider audit. The very best audit comes from outside consultants who have the required objectivity, broad experience in several industries, some knowledge of the industry being audited, and undivided time and attention.
4. Periodic
Typically organizations initiate marketing audits only after sales have turned down, sales force morale has fallen, and other problems have occurred. Companies are thrown into crisis partly because they didn't review their marketing functions during good times.
A periodic marketing audit will benefit companies in good health as well as those in big trouble. A marketing audit starts with meeting between the company officers and the marketing auditors to work out on agreement on the audit's objectives coverage, depth, data sources, report format an timeframe. It includes an in depth plan of who is to be interviewed, the questions to be asked and where so when to minimise time and cost. The cardinal rule in marketing auditing is never to rely solely on company managers for data and opinions ask customers, dealers and other outside groups.
It is apparent a marketing audit can be a complex process, however the aim is simple. It is only to recognize those existing external and internal factors which will have a significant impact on the near future plans of the company. It is crear that the foundation material to be input to marketing audit should be comprehensive. The best method of accumulate this material continuously, as and when it becomes available; since this avoids the otherwise heavy workload involved in collecting it as part of the regular, typically annual, planning process itself.
The analysis of the material will demand significant effort. What's important, and will need to be considered in the marketing plan will eventually emerge from the overall process, changes from each service or product in each situation. Among the most crucial skills to be learned in marketing is that of being in a position to concentrate on precisely what is important. The process of marketing planning encompases every one of the marketing skills. However lots of these may be particularly relevant at this stage.
POSITIONING
The starting point of marketing plan must be a customer. It it a matter of difinition that his or her needs should drive the whole marketing process. The techniques of positioning and segmentation therefore usually provide best starting point for what must be achieved by the complete planning process.
PORTFOLIO PLANNING
In addition the cordinated planning of the average person products and services can contribute to the balanced portfolio.
80:20 RULE
To achieve other maximum impact, the marketing plan must be clear, concise and simple. It needs to concentrate on the 20% of product or sevice and on 20% of customers that may take into account 80% of the volume and 80% of the profit.
MARKETING MIX 4PS
The 4ps can sometimes divert attention from the client, but the framework they provide can be quite useful in building the action plan.
SWOT ANALYSIS
On technique which is specially useful in the analysis of the material within which the marketing audit, is that of SWOT analysis. It groups some of the key bits of information into categories internal and external factors and then by their dual positive and negative aspects. Strenght and opportunities as the former aspects with weaknessses and threats representing the later.
Internal Factors:
Strength and weakness internal to the organisation. Its strategies and its position in relation to its competitors
External Factors:
Opportunities and threts presented by the external environment and your competition.
CUSTOMER ANALYSIS
The purpose of an enterprise is to build and keep a customer. Strategy development or review starts with external analysis, an analysis of the factors external to an enterprise that make a difference strategy. To conduct an external analysis the market or submarket boundaries need to be specified.
In most strategic marketing-planning contexts, the first logical step is to analyse the customer. Customer analysis consists of addressing the three sets of strategic question and this are about the next.
1. Segmentation which is usually the key to developing a sustainable competitive advantage based on differentiation, low cost, or a focus strategy. The marketplace can be segmented predicated on customer charateristics like sex, age, occupation, lifestyle and or based on product or service related approaches like usage, application.
2. Customer mativation what lies behind their perchase decision and exactly how does that differ by segment. Customer motivation analysis starts with the duty of identifying motivations for confirmed segment. Although several managers can identify motivation a more valid list is usually obtained by getting customers to discus the product or service in a systematic way.
3. Unmet needs are strategically important because they represent opportunities for businesses to increase their markets share or break into a market. They can also represent threats to established firms in that they could be a lever for competitors to disrupt a recognised position. One reaction to the identification of unmet need is for a company to develop something or product modification that will be responsive.
COMPETITOR ANALYSIS
Induce your opponents not to spend money on the products markets and services where you expect to get the most that is the fundamental rule of strategy by Bruce Henderson founder of BCG. Competitive analysis is the second phase of external analysis. The analysis give attention to the identification of threats, opportunities or strategic question created by emerging or potential opponents moves, weaknesses or strenght. It starts with identfying current and potential competitors and they are two ways of identifying current competitors.
1. Examines perspective of the customer who must make choices among competitors.
2. Identification approach attempts to put rivals into strategic groups on the basis of their competitive strategy.
In additional to current competitors, it's important to consider potential market entrants such as organizations that might engage in the following:
A. Market expansion possibly the most obvious source of potential rivals is companies operating in other geographic regions or in other countries.
B. Productor service expansion thus exploiting one common market to take benefit of technological and didtribution overlap. eg Insurance firms doing banking.
C. Backward integration customers are another potential way to obtain competition.
MARKET ANALYSIS
It builds on customer and copmetitor analysis to make some strategic judgements about market and its dynamics. One objectives of market analysis is to look for the attractiveness of market to current and potential participants. The type and content of an analysis of market and its relevant product markets will often are the following dimensions:
1. Actual and potential market size.
The starting place for the analysis of market is the full total sales level. It really is then often beneficial to consider the potential markets a fresh use, new user group, or even more frequent consumption could change considerably the size and prospects for the marketplace.
2. Market growth.
If all remains constant growth means increased sales and profit even without increasing market share. Additionally, it may mean less price pressure when demand increases faster than supply, and firms are not engaged in experience curve pricing, anticipating future less expensive.
3. Market Profitability.
Firms create a strategy that will bring above-average profits. Porter's approach to estimating the profitability of market is called industry strucure analysis. The essential idea would be that the attractiveness of a business or market as measured by the long-term return on investiment of the common firm depends largely on five factors that influence profitabilt
A. The intensity of competion.
B. The existence of potential opponents who will enter if profits are high.
C. The bargaining power of customers.
D. The bargaining power of suppliers.
E. Risk of substitute services.
4. Distribution system.
An analysis of distribution systems should include three types of question and these are;
What are the alternative distribution channels.
What exactly are the trends. What channels are growing in important. What new channels have emerged or will probably.
Who has the power in the channel and how is that likely to shift.
Access to a highly effective and efficient distribution channel is usually a key success factor. Channel alternatives can vary in a number of ways you are the degree of directness. The companies closest to the end user possess the most control over marketing and usually assume the best risk.
5. Cost structure:
understanding of the cost structure of market can provide insights into present and future key success factors. The first step is to conduct an analysis of the value chain to determine whore value is added to the service. It may be possible to develop control over a resource or technology. Competitors will try to be the lowest cost competitor in a higher value-added stage of the value chain. Another market cost structure consideration is the extent to which experience curve strategies are feasible, can businesses develop sustainable cost advantage based on volume.
ENVIRONMENTAL ANALYSIS
Technology: One dimension of environmental analysis is technological trends or technological events occuring beyond your market or industry which may have the to impact strategies. They can represent opportunities to those in a position to capitalise and a fresh alternative technology could pose a significant threat. Impact of new technology certainly it could be important even critical to manage the transition to anew technology successful one, will not indicate that businesses based on the last technology will suddenly become unhealthy. Government: Additional and removal of legislative or regulatory constraints can pose major strategic threats and opportunities. The impact of government efforts in deregulation in banking has had enormous implications for the businesses involved.
Economics: The analysis of some strategies will be afflicted by judgements made about the economy, particulary inflation and general monetary health as measured by unemployment and economical growthj. A forecast of the relative valuation of currencies can be relevant for industries with multinational competitors. Thus an analysis of the total amount of payment and other factors affecting currency valuation might be needde.
Culture trends can present both threats and opportunities for a wide varietyof firms, as the next examples illustrate. The usage of more contemporary values in the advertising for threatened traditional values.
Demographics
Demographic trends can be considered a powerful underlying force in market. Among the influential demographic variables are age, income, education and geographic location. The movement of businesses and population into differnt areas of the united states has implication for many service organisation such as brokerage houses, real estate venture and insurance companies.
