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)

THE MARKETING ENVIRONMENT

INTERNAL AUDIT
(`CONTROLLABLE' FACTORS)

COMPANY MARKETING OPERATIONS

`MACRO' FACTORS

MARKET TRENDS

POLITICAL/LEGAL

COMPETITORS

PRODUCTS

STRUCTURE

ECONOMIC

CUSTOMERS

PRICING

PERFORMANCE

SOCIO-CULTURAL

PLACE

INFORMATION

TECHNOLOGICAL

PROMOTION

PLANNING

(P.E.S.T)

(4 P's)

MARKETING MIX

ORGANISATION&
SYSTEMS

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,
technologies materials
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
j threats.
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

Environment

Financials

Internal
Processes

Customers

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

PROMOTION
Advertising
Personal selling
Sales promotion
Public relations
Direct marketing

PRICE
List price
Discounts
Allowances
P
Payment
period
i d
Credit terms

TARGET
CUSTOMERS
PLACE
Channels
Coverage
Locations
Inventory
Storage
Distribution

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 Design
Standard Design
Customized Design

Product Repositioning
Among Existing Customers
Among New Customers
For New Uses

Product Elimination
Line Simplification
Line Divestment

Product Overlap
Competing Brands
Private Labels
OEMs
Product Scope
Single Systems
Multiple Systems

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

Direct Marketing

Direct mail
Catalogs
Telemarketing
Direct response
Direct selling
Interactive / Internet

Sales Promotions

Coupons, Sampling
Premiums, Rebates
Contests, POP materials
Promotion allowances
Merchandise allowances
Price deals, Sales contests
Trade shows

Public Relations

Publicity
Special publications
Community activity participation
Fund-raising
Special event sponsorship
Public affairs activities

Personal Selling
Across the counter
Door-to-door
Institutional

Pricing Strategies
New-Product
Pricing

Price skimming
Penetration pricing

Differential
Pricing

Negotiated pricing
Secondary-market
pricing

Periodic discounting
Random discounting
Product-Line Pricing

Psychological
Pricing

Promotional
Pricing

Odd number pricing

Odd-number

Price leaders
Special-event pricing
Comparison

Multiple-unit pricing
Reference pricing
Bundle pricing

discounting

Everyday low prices

Customary pricing

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
M k t Penetration
P t ti - the
h fi
firm seeks
k to achieve
hi
growthh with
i h existing
i i products
d
in
i their
h i current market
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 simply maintaining market share will result in growth
market,
growth, and there
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
firm'ss core competencies are
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 it can leverage its strengths by developing a new product targeted to its
situation,
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
p
byy the chance of a high
g rate of return. Other advantages
g of
diversification include the potential to gain a foothold in an attractive industry and the
reduction of overall business portfolio risk.

Corporate Growth Strategies

New M
Markets

Currentt Markets

Current Products

New products

Market Penetration Strategies

Product Development Strategies

Product improvements
Product-line extensions
New products for same
market

Increase market share

Increase product usage
Increase frequency of use
Increase quantity used
New applications

Market Development Strategies

Diversification Strategies

Expand markets for existing products

Geographic expansion
Target
g new segments
g

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

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
Strategic
Planning gap

Sales

Integrative growth
Intensive growth

Current
Portfolio
0

10

Time (years)

11