Marketing Audits and its importance
to an organisation
As of I am starting to write this essay, an historic and astonishing incident happened in US—Standard & Poors first time downgraded American Federal Bonds form AAA to AA+. Look at the messed up world economic picture--US is suffering from recession without any better signs, Europe is struggling with debt crisis, only growth engine China is also slowing down. We are facing the greatest uncertainty ever experienced before, as for economic society, walking away from this desperate situation needs to review history and find appropriate tools, from an organisation’s point of view, one of the effective tools is to seek for effective and regular marketing audits to cope with rapidly changing economic environment.
Definition and Purposes of Marketing Audit
The concept of marketing audit dated back to 1950s and evolved through application phase of 1960s, turbulent 1970s, growing period of 1980s and 1990s until now. The followings are several definitions of marketing audits:
“A comprehensive examination of an organisation’s marketing structure, programs and performance”----Peter Rix, Marketing-a practical approach
“Systematic, critical, rigorous and unbiased study of efficiency of all marketing activities within an organisation extending to evaluation of each and every functional objective and their effective coordination”----Brian Monger, Marketing in black white
“A periodic, comprehensive, systematic, and independent examination of the organisation’s marketing environment, internal marketing system and specific marketing activities”----Philip Kotler
The purposes of marketing audit are to find marketing opportunities, locate marketing issues, seek right short term and long term solution, which ensure the implementation of marketing plans or the revision of unreasonable plans to improve an organisation’s overall marketing performance.
Components of the Marketing Audit
An effective and rounded marketing audit covers six components:
1/ Marketing Environment Audit
Through auditing marketing environment in which it operates, an organisation could find if its marketing strategy is adapt to the marketing environment, and if any changes needed.
The marketing environment consists of two subclasses, one is the macro environment which includes political/legal, economic, social/cultural and technological, and another one is industry and competitive environment. In short, PEST+C.
2/ Marketing Strategy Audit
It mainly examine whether or not an organisation’s goals and objectives reflect market orientation, if the organisation takes right competition position, seizes market opportunities and allocates appropriate resources.
3/ Marketing Organisation Audit
The marketing auditor needs to consider the decision-making ability of marketing organisation, as well as its ability of analysis, planning and execution. Other factors include its strain capacity to market, and its interaction with other function departments.
4/ Marketing Systems Audit
It focuses on whether or not an organisation has well-established and effective systems for information gathering, planning and control. All these systems can be classified as internal systems, external systems, vertical and horizontal marketing systems.
A vertical marketing system (VMS) is one in which the main members of a distribution channel—producer, wholesaler, and retailer—work together as a unified group in order to meet consumer needs.
A horizontal marketing systems(HMS) means in which members at the same level in a channel of distribution band together in strategic alliances or joint ventures to exploit a new marketing opportunity.
5/ Marketing Productivity Audit
A marketing organisation needs analyses on profits, cost-benefit, the audit covers performance examinations on sale-profit rates, costs...
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