Marketing audit: a systematic, independent and periodic diagnosis of the marketing effectiveness of your organization
Use the five key attributes to perform a marketing–effectiveness rating review in your organisation.
In my earlier articles on the topic of marketing controls, I have covered annual-plan control, profitability control and efficiency control. In this article, I shall be covering the topic of ‘strategic control’, the most important marketing control which can help every company, small and large, survive this utmost competitive market.
There is an old adage, ‘Having lost sight of our objective, we redoubled our efforts’.’ Rapid obsolescence of marketing objectives, policies, strategies, and programmes in today’s ever changing Digital Era is a constant possibility. Therefore, all companies need to undertake a critical review of their overall marketing effectiveness. The two tools available to a company to periodically assess its overall approach to the marketplace are:
1) Marketing-Effectiveness Rating Review
2) Marketing Audit
Marketing-Effectiveness Rating Review
The marketing effectiveness of an organisation is not revealed by current sales or profits, as that could be due to a division being in the right place at the right time. Improvements in the division marketing will boost results from good to excellent. In another case, a division may be having poor results in spite of excellent marketing, in which case replacing present marketing managers might only make things worse.
Marketing effectiveness of a company or division is reflected in the degree to which it exhibits the following five attributes of a marketing orientation:
A marketing-effectiveness review can be done with the marketing manager and other managers, wherein each attribute is measured using a set of questions, answers to which are scored either 0, 1, or 2. The total score is then added for each attribute and subsequently for all the five attributes. This total is on a scale of 0-30 with a score of < 5 indicating no marketing effectiveness and >26 indicating superior effectiveness. I have detailed these questions below for reviewing the attributes of Customer Philosophy, Adequate Marketing Information and Strategic Orientation.
Once marketing weaknesses are discovered by applying the marketing–effectiveness rating review, a company will need to undertake a more thorough study, known as marketing audit. Whereas a functional audit covers marketing activity like sales force, pricing, promotion et al, a marketing audit covers all major marketing activities and helps in finding the trouble spots. This comprehensiveness is very useful in finding the real source of the problem. For example, excessive sales force turnover may not necessarily be a symptom of poor sales training or compensation but rather due to weak products and promotion.
The marketing audit is very systematic in the sense that it involves an orderly sequence of diagnostic steps covering the company’s internal marketing system, environment, and marketing activities. This step is followed by a corrective-action plan of short and long-term proposals to help in improving the company’s overall marketing effectiveness. The six ways to conduct the marketing audit include self-audit, audit from across, audit from above, company auditing office, company task-force audit and outsider audit. Although all these methods are used by companies depending on this structure, resources etc., it goes without saying the best option is to do an outsider audit, conducted by marketing consultants having the necessary objectivity and independence along with some familiarity with the specific industry and focused time for conducting the audit.
As the old saying ‘Prevention is better than cure’ goes, a periodic marketing audit done in good times protects healthy companies from getting into trouble. Marketing operations can always be improved, even in companies that have best processes and people in place. This is also true because no marketing operations can remain successful over the years by maintaining status quo.
The marketing audit covers the following six areas:
- Marketing environment
This covers major macro environment forces and trends in the key components of the company’s task environment, including markets, customers, competitors, distributors, dealers, suppliers and facilitators.
- Marketing strategy
This is a review of the company’s marketing objectives and marketing strategy to appraise how well these are adapted to the current and forecasted marketing environment.
- Marketing organisation
This evaluates the capability of the marketing organisation for implementing the necessary strategy for the forecasted environment.
- Marketing systems
This assesses the quality of the company’s systems for the analysis, planning and control.
- Marketing productivity
This examines the profitability of different marketing entities and the cost-effectiveness of different marketing expenditures.
- Marketing function
This makes in-depth evaluations of major marketing-mix components including products, price, distribution, sales-force, advertising, promotion and publicity.
After collecting and analysing all the information, the marketing auditor or consultant presents a report to the management consisting of all the findings along with the short-term and long-term recommendations.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)