Marketing Audit

A Systematic, Critical & Impartial Review & Appraisal of The Marketing Environment and The Companys Total Marketing Operations

Marketing Audit Framework

EXTERNAL AUDIT
(`UNCONTROLLABLE' FACTORS)

INTERNAL AUDIT
(`CONTROLLABLE' FACTORS)

THE MARKETING ENVIRONMENT

`MACRO' FACTORS MARKET TRENDS

COMPANY MARKETING OPERATIONS

MARKETING MIX ORGANISATION& SYSTEMS STRUCTURE

POLITICAL/LEGAL

COMPETITORS

PRODUCTS

ECONOMIC

CUSTOMERS

PRICING

PERFORMANCE

SOCIO-CULTURAL

PLACE

INFORMATION

TECHNOLOGICAL (P.E.S.T)

PROMOTION (4 P's)

PLANNING

Situation analysis internal external

Company analysis Quantitative and qualitative resources of the firm Analysis of the competitors Which competitors have what potential? Strength-weakness analysis Strengths and weaknesses of the firm compared to the competitors.

SWOT Analysis

SWOT Analysis
strengths-weakness-analysis environmental analysis

External Environment Audit

WHERE ARE WE NOW? OPPORTUNITIES AND THREATS?
Macro environment: Economic: growth, inflation, interest rates, unemployment Socio/cultural: demographics, lifestyles, values, attitudes Technological: new product and process technologies, materials technologies Political/legal: taxation, anti-trust, health and safety Ecological: conservation, pollution, energy The Market: Market size, growth, trends and developments Customers: who are they? What are their choice criteria? How, when, where do they buy? How do they rate our marketing mix vis--vis our competitors? How does the market segment? What benefits does each segment seek? Balance of power in the marketing chain: channel attractiveness, backward and forward integration, physical distribution methods, logistical management systems Competition: Who are they - actual and potential? Market shares and size. Profitability. How do they conduct their business - objectives and strategies What are their strengths and weaknesses? Barriers to entry.

Results
An ideal business is high in major opportunities and low in major threats. j th t A speculative business is high in both major opportunities and threats. A mature business is low in major opportunities and low in threats. A troubled business is low in opportunities and high in threats.

Balanced Scorecard
Financials

Environment

Customers

Internal Processes

Learning & Innovation

Opportunities & Threats Strengths & Weaknesses

From 4Ps to 4Cs

The 4Ps framework offers a sellers view. 4Cs translates this into a customer perspective. Four Ps Product Price Place Promotion Four Cs Customer Solution Cost to Customer Convenience Communication

Marketing Mix
PRODUCT Product variety Quality Design Features Brand name Packaging Sizes Services Warranties Returns PRICE List price Discounts Allowances Payment period P i d Credit terms

TARGET CUSTOMERS PLACE Channels Coverage Locations Inventory Storage Distribution

PROMOTION Advertising Personal selling Sales promotion Public relations Direct marketing

Effective Marketing Mix

MATCHES CUSTOMER NEEDS

CREATES A COMPETITIVE ADVANTAGE

EFFECTIVE MARKETING MIX

WELL BLENDED & CONSISTENT

MATCHES CORPORATE RESOURCES

Product Strategies
Product Positioning Single Brand Multiple Brands Product Repositioning Among Existing Customers Among New Customers For New Uses Product Overlap Competing Brands Private Labels OEMs Product Scope Single Systems Multiple Systems Product Design Standard Design Customized Design Product Elimination Line Simplification Line Divestment New-Products Improvement-Modification Innovation Imitation Product Diversification Concentric Horizontal Conglomerate

Market Strategies
Market Scope Single Market Multiple Markets Total Market Market Entry Strategy First in the Market Early Entry Laggard

Market Geography Local Market Regional Markets National Market International Markets

Market Commitment Strategy Strong Commitment Average Commitment Light Commitment

Market Dilution Strategy De-marketing Pruning of Marginal Markets Key Markets Market Harvesting

Promotional Strategies
Advertising
National advertising Retail/local advertising Advertising to increase demand Business-to-business advertising g Professional advertising Trade advertising

Sales Promotions
Coupons, Sampling Premiums, Rebates Contests, POP materials Promotion allowances Merchandise allowances Price deals, Sales contests Trade shows Publicity Special publications Community activity participation Fund-raising Special event sponsorship Public affairs activities

Direct Marketing
Direct mail Catalogs Telemarketing Direct response Direct selling Interactive / Internet

Public Relations

Personal Selling
Across the counter Door-to-door Institutional

Pricing Strategies
New-Product Pricing Differential Pricing Psychological Pricing Promotional Pricing

Price skimming Penetration pricing

Negotiated pricing Secondary-market

pricing

Periodic discounting Random discounting

Product-Line Pricing

Odd-number Odd number pricing Multiple-unit pricing Reference pricing Bundle pricing Everyday low prices Customary pricing

Price leaders Special-event pricing Comparison

discounting

Captive pricing Premium pricing Price lining

Ansoffs Matrix
Existing Products New Products Existing Markets Market Penetration Product Development

New Markets

Market Development

Diversification

Ansoff's matrix provides four different growth strategies: Market Penetration - the fi seeks to achieve growth with existing products in their current market M k t P t ti h firm k hi h ih i i d i h i k segments, aiming to increase its market share Market Development - the firm seeks growth by targeting its existing products to new market segments. Product Development - the firms develops new products targeted to its existing market segments. Diversification - the firm grows by diversifying into new businesses by developing new products for new markets.

Product-Market Growth Strategy

The Market Penetration strategy is the least risky since it leverages many of the firm's existing resources and capabilities. In a growing market, market simply maintaining market share will result in growth and there growth, may exist opportunities to increase market share if competitors reach capacity limits. However, market penetration has limits, and once the market approaches saturation another strategy must be pursued if the firm is to continue to grow. Market Development options include the pursuit of additional market segments or geographical regions. The development of new markets for the product may be a good strategy if the firm s core competencies are firm's related more to the specific product than to its experience with a specific market segment. Because the firm is expanding into a new market, a market development strategy typically has more risk than a market penetration strategy.

Product-Market Growth Strategy

A Product Development strategy may be appropriate if the firm's strengths are related to its specific customers rather than to the specific product itself. In this situation, situation it can leverage its strengths by developing a new product targeted to its existing customers. Similar to the case of new market development, new product development carries more risk than simply attempting to increase market share.

Diversification is the most risky of the four growth strategies since it requires both product and market development and may be outside the core competencies of the firm. However, diversification may be a reasonable choice if the high risk is compensated by the chance of a high rate of return. Other advantages of p y g g diversification include the potential to gain a foothold in an attractive industry and the reduction of overall business portfolio risk.

Corporate Growth Strategies

Current Products Current Markets t
Market Penetration Strategies
Increase market share Increase product usage Increase frequency of use Increase quantity used New applications

New products
Product Development Strategies
Product improvements Product-line extensions New products for same market

Market Development Strategies

Diversification Strategies
Vertical integration Forward/backward integration Diversification into related businesses (concentric diversification) Diversification into unrelated businesses (conglomerate diversification)

New Markets M

Expand markets for existing products Geographic expansion Target new segments g g

Growth Strategies
Intensive Growth Market Penetration Market Development Product Development Integrative Growth Diversification Growth

g Backward Integration Concentric Diversification Forward Integration Horizontal Diversification Horizontal Integration Conglomerate Diversification

10

Strategic Planning Gap

Desired Sales Diversification growth Integrative growth Strategic Planning gap

Sales

Intensive growth

Current Portfolio 0 5 10

Time (years)

11