The Marketing Audit

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The Marketing Audit

The marketing audit has certain similarities to a financial audit in that it is a review or appraisal of your existing

marketing activities. Carrying out the marketing audit provides the opportunity to review and appraise your whole

marketing activity, enabling you to assess past and present performance as well as to provide the basis for evaluating

possible future courses of action.

Because the business environment is constantly changing, the marketing audit should be used as a reference tool, with

constant updates reflecting changes in the external environment and your own internal business experiences.

1. External Audit

External factors can be split broadly into three groups, the economic environment, thecompetitive environmentand

your own market environment. Consider these areas from your own business's point of view - will any changes have

an impact on your business, will they affect your competitors, will they allow you to compete where you could not, or

inhibit your ability to compete. If the answer is yes, then the factors should be included in the audit.

With the advent of the internet, there are now many sources of information on your competitors and your

environment. You may also be surprised how much business information is available from your nearest city library.

And remember, Company Reports are a good source of competitive information and can be found at www.companies-

house.gov.uk.

1.1 The Economic Environment

Political Government actions, tax levels, privatisation, 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 (changingbeliefs, 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

1.2 Competitive Environment
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How competitive is your market? What are your competitors doing, likely to be doing? Evaluate the following:

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?

1.3 The Market Environment

Total market size growth and trends

Market characteristics, growth and trends

Products, prices

Physical distribution channels

Customers/consumers

Industry practices

2. Internal Audit

This is your opportunity to put your own business under the microscope - do you know as much about your ownsituation as you should?

Sales (total, split by geography, industry, customer, product)

Market shares

Profit margins

Costs

Marketing information research

Effectiveness ofmarketing mix
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Key outcomes from this audit can then be summarised in the Current Market Position and Market Overview sections

of yourmarketing plan.

How to Write a Marketing Plan

The Marketing Plan is a highly detailed, heavily researched and, hopefully,

well written report that many inside and possibly outside the organization will evaluate. In many respects,

the Marketing Plan is the most important document produced by marketers as it not only helps to justify

what has occurred in the past, but is critical for explaining where a company intends to go in the future.

Th Marketing Plan is widely used by both large large corporate marketing departments and also by small

startup companies. It is particularly important for marketers who seek funding for new projects or to

expand existing products or services.

Essentially the Marketing Plan:

forces the marketing personnel to look internally in order to fullyunderstand the results of past marketing decisions.

forces the marketing personnel to look externally in order to fullyunderstand the market in which they operate.

sets future goals and provides direction for future marketing efforts thateveryone within the organization should understand and support.

is a key component in obtaining funding to pursue new initiatives.

The Marketing Plan is generally undertaken for one of the following reasons:

1. Needed as part of the yearly planning process within the marketingfunctional area.

2. Needed for a specialized strategy to introduce something new, such asnew product planning, entering new markets, or trying a new strategy tofix an existing problem.
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3. Is a component within an overall business plan, such as a new businessproposal to the financial community.

There are many ways to develop and format a marketing plan. The approach taken here is to present a 6-

Part plan that includes:

1. Purpose and Mission

2. Situational Analysis

3. Marketing Strategy and Objectives

4. Tactical Programs

5. Budgets, Performance Analysis and Implementation

6. Additional Consideration

This plan is aimed at individual products and product lines, however, it can be adapted fairly easily for use

in planning one or more strategic business units (SBU). The page length suggested for each sectionrepresents a single-spaced typed format for a plan focused on a single product. Obviously for multi-

product plans lengths will be somewhat longer.

It is assumed that anyone developing a Marketing Plan possesses a working understanding of marketing

principles. If you do not, it is suggested you spend considerable time learningabout basic marketing

through the previous sections of the Principles of Marketing Tutorials.

Note, throughout the plan the word "product" is used. However, the information presented in the

Marketing Plan tutorials applies to both products and services.
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The Marketing Audit

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