Marketing Management Mod 1 Asst.Prof.

Manini Hemanth

What is the Marketing Environment?

Marketing Environment is the combination of external and internal factors and forces which
affect the company’s ability to establish a relationship and serve its customers.

The marketing environment of a business consists of an internal and an external environment.

The internal environment is company specific and includes owners, workers, machines, materials
etc. The external environment is further divided into two components: micro & macro. The
micro or the task environment is also specific to the business but external. It consists of factors
engaged in producing, distributing, and promoting the offering. The macro or the broad
environment includes larger societal forces which affect society as a whole. The broad
environment is made up of six components: demographic, economic, physical, technological,
political-legal, and social-cultural environment.

Components of Marketing Environment

The marketing environment is made up of the internal and external environment of the business.
While internal environment can be controlled, the business has very less or no control over the
external environment.

Internal Environment

The internal environment of the business includes all the forces and factors inside the
organization which affect its marketing operations. These components can be grouped under the
Five Ms of the business, which are:

 Men
 Money
 Machinery
 Materials
 Markets
The internal environment is under the control of the marketer and can be changed with the
changing external environment. Nevertheless, the internal marketing environment is as important
for the business as the external marketing environment. This environment includes the sales
department, marketing department, the manufacturing unit, the human resource department, etc.

External Environment

The external environment constitutes factors and forces which are external to the business and on
which the marketer has little or no control. The external environment is of two types:

Micro Environment

The micro component of the external environment is also known as the task environment. It
comprises of external forces and factors that are directly related to the business. These
include suppliers, market intermediaries, customers, partners, competitors and the public

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 Suppliers include all the parties which provide resources needed by the organisation.
 Market intermediaries include parties involved in distributing the product or service of the
organisation.
 Partners are all the separate entities like advertising agencies, market research
organisations, banking and insurance companies, transportation companies, brokers, etc.
which conduct business with the organisation.
 Customers comprise of the target group of the organisation.
 Competitors are the players in the same market who targets similar customers as that of the
organisation.
 Public is made up of any other group that has an actual or potential interest or affects the
company’s ability to serve its customers.
Macro Environment

The macro component of the marketing environment is also known as the broad environment. It
constitutes the external factors and forces which affect the industry as a whole but don’t have a
direct effect on the business. The macro environment can be divided into 6 parts.

Demographic Environment

The demographic environment is made up of the people who constitute the market. It is
characterised as the factual investigation and segregation of the population according to
their size, density, location, age, gender, race, and occupation.

Economic Environment

The economic environment constitutes factors which influence customers’ purchasing power and
spending patterns. These factors include the GDP, GNP, interest rates, inflation, income
distribution, government funding and subsidies, and other major economic variables.

Physical Environment

The physical environment includes the natural environment in which the business operates. This
includes the climatic conditions, environmental change, accessibility to water and raw materials,
natural disasters, pollution etc.

Technological Environment

The technological environment constitutes innovation, research and development in technology,

technological alternatives, innovation inducements also technological barriers to smooth
operation. Technology is one of the biggest sources of threats and opportunities for the
organisation and it is very dynamic.

Political-Legal Environment

The political & Legal environment includes laws and government’s policies prevailing in the
country. It also includes other pressure groups and agencies which influence or limit the working
of industry and/or the business in the society.

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Social-Cultural Environment

The social-cultural aspect of the macro environment is made up of the lifestyle, values, culture,
prejudice and beliefs of the people. This differs in different regions.

Importance of Marketing Environment

Every business, no matter how big or small, operates within the marketing environment. Its
present and future existence, profits, image, and positioning depend on its internal and external
environment. The business environment is one of the most dynamic aspects of the business. In
order to operate and stay in the market for long, one has to understand and analyze the marketing
environment and its components properly.
Essential for planning

An understanding of the external and internal environment is essential for planning for the
future. A marketer needs to be fully aware of the current scenario, dynamism, and future
predictions of the marketing environment if he wants his plans to succeed.

Understanding Customers

A thorough knowledge of the marketing environment helps marketers acknowledge and predict
what the customer actually wants. In-depth analysis of the marketing environment reduces (and
even removes) the noise between the marketer and customers and helps the marketer to
understand the consumer behaviour better.

Tapping Trends

Breaking into new markets and capitalizing on new trends requires a lot of insight about the
marketing environment. The marketer needs to research about every aspect of the environment to
create a foolproof plan.

Threats and Opportunities

A sound knowledge of the market environment often gives a first mover advantage to the
marketer as he makes sure that his business is safe from the future threats and taps the future
opportunities.

Understanding the Competitors

Every niche has different players fighting for the same spot. A better understanding of the
marketing environment allows the marketer to understand more about the competitions and about
what advantages do the competitors have over his business and vice versa.

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DOMESTIC MARKETING AND INTERNATIONAL MARKETING

There are two types of marketing namely, domestic and international marketing. Domestic
marketing is when commercialization of goods and services are limited to the home country
only.

On the other hand, International marketing, as the name suggests, is the type of marketing
which is stretched across several countries in the world, i.e. the marketing of products and
services is done globally. In this article excerpt you can find the difference between domestic and
international marketing in detail.

DEFINITION OF DOMESTIC MARKETING

Domestic Marketing refers to the marketing activities employed on a national scale. Marketing
strategies were undertaken to cater customers of a small area, generally within the local limits of
a country. It serves and influences the customers of a specific country only.
Domestic Marketing enjoys a number of privileges like easy to access data, fewer
communication barriers, deep knowledge about consumer demand, preferences and taste,
knowledge about market trends, less competition, one set of economic, social & political issues,
etc. However, due to the limited market size, the growth is also limited.
DEFINITION OF INTERNATIONAL MARKETING
International Marketing is when the marketing practices are adopted to cater the global market.
Normally, the companies start their business in the home country, after achieving the success
they proceed their business to another level and become a transnational company, where they
seek to enter in the market of several countries. So, the company must be known about the rules
and regulations of that country.
International marketing enjoys no boundaries, keeping the focus on the worldwide customers.
However, some disadvantages are also associated with it, like the challenges it faces on the path
of expansion and globalisation. Some of which are socio-cultural differences, changes in foreign
currency, language barriers, differences in buying habits of customers, setting and international
price for the product and so on.

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Key Differences Between Domestic and International Marketing

The significant differences between domestic and international marketing are explained below:
1. The activities of production, promotion, advertising, distribution, selling and customer
satisfaction within one’s own country is known as Domestic marketing. International
marketing is when the marketing activities are undertaken at the international level.
2. Domestic marketing caters a small area, whereas International marketing covers a large
area.
3. In domestic marketing, there is less government influence as compared to the
international marketing because the company has to deal with rules and regulations of
numerous countries.
4. In domestic marketing, business operations are done in one country only. On the other
hand, in international marketing, the business operations conducted in multiple countries.
5. In international marketing, there is an advantage that the business organisation can have
access to the latest technology of several countries which is absent in case domestic
countries.
6. The risk involved and challenges in case of international marketing are very high due to
some factors like socio-cultural differences, exchange rates, setting an international price
for the product and so on. The risk factor and challenges are comparatively less in the
case of domestic marketing.
7. International marketing requires huge capital investment, but domestic marketing
requires less investment for acquiring resources.
8. In domestic marketing, the executives face less problem while dealing with the people
because of similar nature. However, in the case of international marketing, it is quite
difficult to deal with customers of different tastes, habits, preferences, segments, etc.
9. International marketing seeks deep research on the foreign market due to lack of
familiarity, which is just opposite in the case of domestic marketing, where a small
survey will prove helpful to know the market conditions.

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FUNDAMENTALS OF STRATEGIC MARKETING PLAN 

Definition of a marketing plan :According to The Marketing Plan Handbook, by Marian
Burk Wood (which I highly recommend you read), marketing plans are comprehensive
documents that summarize marketplace knowledge and the strategies and steps to be taken
in achieving the objectives set by marketing managers for a particular period.
Below are the four essential topics that must be covered in your marketing plans before you
proceed with any specific marketing activities, including content marketing, social media, email
promotion, websites, or any other “next big thing” emerging on the marketing landscape:
1. Assess the current situation:
          Determine what resources you have available.
          Analyze and summarize your market space(s).
          Analyze your company’s internal strengths and weaknesses.
          Analyze external opportunities and threats.
          Assess the competition and competitive environment.
          Assess the macro environment in terms of social, economic, political, and
technological opportunities and challenges.
          Identify critical issues to be addressed in your marketing activities.
2. Develop your marketing strategy, including:
          Your business mission and vision
          Your overarching business objectives
          Your marketing objectives
          A description of your target market and customers (i.e., buyer personas)
          Your unique positioning statement
          Your unique value proposition
3. Craft your marketing program, by outlining:
          Your product messaging
          Your pricing strategy
          The channels you will communicate across
          Your promotion plans
4. Determine your controls, benchmarks, and measurement processes, including:
          Budgets and resources
          Critical success factors
          Key performance indicators
          Your preferred technology solutions and platforms


MARKETING ORGANIZATION
The Marketing organization is the vehicle for making decisions on all marketing areas viz.
products, marketing channels, prices, physical distributions and promotions. It establishes the
authority relationships among marketing personals and specialists who are responsible for
making marketing decisions and planning that are essential for the success of any business firm.
Need for Marketing Organization

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In the technological arena, modern marketing activities are consumer oriented. Thus, to sustain
in the competitive market, the business enterprise requires a marketing organization that can take
decision on the marketing factors viz. product, price, promotions, etc. to satisfy the needs and
desires of customers and maximize profit of the enterprise.
Therefore, a sound marketing organization is the pillar for success for any business enterprise
and provides a framework to establish an authority among the sub ordinates, locate
responsibility, establish sales routines, enforces proper supervision of sales force, avoid
repetitive duties and enable the top executives to devote more time for planning policy matters.
Principles of Organization
Unity of Objectivity
The attainment of objectives is the main purpose of the organizing. An organization and every
part of it should be directed towards the accomplishment of objectives. Every member of the
organization should be familiar with the common objectives or goals. Thus, the organizational
goals, departmental goals and individual goals must be clearly defined.
Efficiency
An organization is efficient if it is able to accomplish pre-determined objectives at minimum
possible cost. An organization must also provide maximum possible satisfaction to its employees
and should also contribute to the welfare of the community.
Division of work
For the sound and effective organization, the total task should be divided in such a manner that
the work of every individual in the organization is limited and the work should be assigned to the
right person according to his physical, mental and psychological capacities.
Span of control
Due to limitation of time and ability, no executive can effectively supervise more than a
particular number of subordinates. Therefore, every executive should be asked to supervise a
reasonable number of executives depending upon his ability, his job, the complexities of duties
of his sub-ordinates, the nature and importance of work to be supervised, etc.

Scalar Principle
It is sometimes also known as the chain command. According to the principle, the authority and
responsibility should be in a clear line from the top to the bottom of the organization. The more
clear the line of authority in an enterprise, the more effective will be communication and
responsible decision making.
Delegation
The authority delegated to an individual manager should be adequate to enable him to
accomplish results expected of him.
Functional Definition
The duties, responsibilities, authorities and organizational relationships of an individual working
on a particular position should be clearly defined so that there is no confusion. The clearly
defined duties and authorities of an individual will contribute towards the accomplishment of
objectives more effectively.
Authority and responsibility

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It is the tool by which a manager is able to create an environment for individual performance.
Thus, the authority and responsibility of each manager and supervisor should be clearly defined.
Every manager should be held responsible for the acts of his subordinates as well as his own
acts.
Unity of command
The subordinates should receive orders from only one supervisor and no one should be
accountable to more than one boss at a time. This will avoid confusion, disorder and indiscipline.
Thus, this principle creates the feeling of personal responsibility and avoids the problems of
conflicts.
Unity of direction
For the sound and effective organization, there must be one head and one plan for group of
activities directed towards the same objectives.
Co-ordination
There must be an orderly arrangement of group effort and unity of action and co-ordination of
activities at various levels.

Flexibility
The organization structure should be flexible so that it can be easily adjusted to changing
conditions. The organization structure should permit expansions, mergers and replacements, etc.
without disturbing the basic design.
Continuity
The organization should be so structured as to have continuity of operations.
Communication
For the sound and effective organization, the effective communication is necessary. It is the
process of transformation of information from one person to another of different levels. It
involves the systematic and continuous process of telling, listening and understanding opinions
ideas, feelings, information, views, etc. of employees of the organization.
Simplicity
For the better communication and co-ordinations, the levels of the organization should be kept as
minimum as possible. This principle focuses on the simplicity of an organizational structure.

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CUSTOMER LIFETIME VALUE

Definition: Customer Lifetime Value or CLTV is the present value of the future cash flows or the
value of business attributed to the customer during his or her entire relationship with the
company.

How do you calculate Customer Lifetime Value?

When calculating CLV there are many nuances to consider based on the specific questions
you want answered. The most straightforward way to calculate CLV is to take the revenue
you earn from a customer and subtract the money spent on acquiring and serving them.

What can you do with Customer Lifetime Value?

Customer Lifetime Value is the single most important metric for understanding your
customers. CLV helps you make important business decisions about sales, marketing,
product development, and customer support. For example:

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 Marketing: How much should I spend to acquire a customer?

 Product: How can I offer products and services tailored for my best customers?
 Customer support: How much should I spend to service and retain a customer?
 Sales: What types of customers should sales reps spend the most time on trying to acquire?

MARKETING CONTROL TECHNIQUES

1.Annual Plan Control:

In this method, annul plans are prepared for various activities. Each plan includes setting
objectives (expected results or standards), allocating resources, defining time limit, and
formulating rules, policies and procedures. Annual plan control relates to sales. Periodically
(mostly annually) the actual results are measured and compared with standards to judge whether
annual plans are being (or have been) achieved.

Depending on the degree of difference between the planned and the actual results, causes are
detected and suitable corrective actions are undertaken. Thus, it contains checking ongoing
performance against annual plan and taking corrective action. Figure 1 shows five measures of
annual plan control.

Following five measures are used in annual plan control:

1. Analysis of Different Sales:

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Analysis of different sales contains measuring and evaluating different sales (total sales,
territory- wise sales, distribution channel-wise, product-wise sales, customer-wise sales, etc.)
with annual sales goals. Targets are set for different types of sales and actual sales of different
categories are compared to find out how far company can achieve its sales goals.

2. Analysis of Market Share:

Here, market share is used as base for measuring, comparing, and correcting results. Market
share is a proportion of company’s sales in the total sales of the industry. It helps to know how
well the company is performing relative to its close competitors. Thus, the performance is
assessed against expected market share and competitors’ market share.

It involves considering three types of market shares:

 Overall market share

 Served market share

 Relative market share

3. Analysis of Market Expenses-to-Sales:

This type of control checks marketing expenses. It ensures that the firm is not overspending to

achieve its annual sales goals. Different marketing expenses are watched in relations to sales.

i. Sales force-to-sales ratio

ii. Advertising-to- sales ratio

iii. Sales promotion-to-sales ratio

iv. Marketing research-to-sales ratio

v. Sales administration-to-sales ratio

Marketing managers needs to monitor these expenses in relation to sales. If the expenses fall

beyond permissible limits, it should be taken as a serious concern and needed steps are taken to

keep them under control.

4. Financial Analysis:

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Financial control consists of evaluating sales and sales-to-expense ratios in relation to overall

financial framework. It means net profits, net sales, assets, and expenses are studied to find out

rate return on total assets, and rate of return on net worth.

5. Analysis of Customer and Stakeholder Attitudes:

The measures of annual plan control discussed in former part are financial and quantitative in

nature. Qualitative measures are more critical because they give early warning about what is

going to happen on sales as well as profits.

Manager can initiate precautionary actions to minimize adverse impacts of forces on the future

outcomes. Under this tool, customers’ attitudes are tracked to project the way they will react to

the company’s offers. Alert company prefers to set up a system to monitor attitudes of

customers, dealers, and other participants.

Measuring Customers’ Attitudes:

Here, a firm tries to measure attitudes of customers by using various methods like, complaints

and suggestions, customer panels, customer survey, etc. It provides details about new customers

created, existing customers lost, dissatisfied customers, relative product quality, relative service

quality, target market awareness, target market preference, and other valuable information.

Measuring Stakeholders’ Attitudes:

It consists of measuring or recording stakeholders’ attitudes. It shows the pattern of stakeholders’

preference, attitudes, and overall response toward company and its offers. Stakeholders include
suppliers, dealers, employees, stockholders, service providers, etc. They have critical interest and
impact on company’s performance.

Without their cooperation and contribution, a company cannot realize its goals. When one or
more of these stakeholders register dissatisfaction, management must take suitable actions.

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Methods used to track attitudes of customers can also be used for measuring attitudes of
stakeholders.

2 .Profitability Control:

In this method, the base of exercising control over marketing activities is the profitability.
Certain profitability (and expenses) related standards are set and compared with actual
profitability results to find out how far company is achieving profits. Profitability control calls
for measuring profitability of various products, channels, territories, customer groups, order size,
etc. It provides necessary information to management to determine whether products, channels,
or territories should be expanded, reduced, or eliminated.

Process of Marketing-Profitability Analysis:

1. Identifying Functional Expenses:

It consists of determining expenses to be incurred for the marketing activities like salaries, rents,
advertising, selling and distribution, packing and delivery, billing and collection, etc.

2. Assigning Function Expenses to Marketing Entities:

Simply, expenses of particular head (for example, salary or advertising) are associated with
different entities like products, channels, territories or customers groups.

3. Preparing Profits and Loss statement:

A profit and loss statement is prepared for each type of products, channels, territories, etc., to
evaluate their relative performance. Based on relative performance in form of profitability,
management can decide on products, channels or territories to be expanded, reduced or
eliminated.

4. Taking Action:

On the basis of the profit and loss statement, necessary actions can be directed.

Actions include one or more of followings:

i. Expanding product(s)

ii. Reducing product(s)

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iii. Eliminating product(s)

iv. Reducing any of the expenses

v. Increasing sales, etc.

3.Efficiency Control:
This control, particularly, concerns with measuring spending efficiency. While profitability
control reveals the relative (in relation to different entities like products, territories, channels,
etc.) profits a company is earning, the efficiency control shows the ways to improve efficiency of
various marketing entities like sales force, advertising, distribution, sales promotion, and so
forth.

Types of Efficiency Control:

Figure 2 shows major types of efficiency control. Main types of efficiency control involve
controlling sales force efficiency, advertising efficiency, sales promotion efficiency, distribution
efficiency, and marketing research efficiency.

1. Sales Force Efficiency Control:

To measure efficiency of sale force (salesmen), certain key indicators/criteria are developed. A
manager has to make a lot of calculations and paperwork.

Common criteria used to measure and evaluate the sales force efficiency include:

o Average number of sales calls per salesman in a day

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o Average sales calls time spared per contact

o Average revenue generated per call

o Average costs incurred per call

o Entertainment cost per calls

o Percentage of orders per specific number of calls, i.e., how many orders have
been received from 100 calls made

o Number of new customers created during specific period

o Number of customers lost in a given period

o Contribution of salesmen in total sales, revenue, and profits

o Sales force costs as percentage of total sales.

2. Advertising Efficiency Control:

Advertising is the most expensive among all the promotional tools. Major part of promotion
budget is consumed by advertising alone. So, it is extremely necessary to find out efficiency
level of advertising efforts. A company sets advertising goals (standards) and compared actual
contribution of advertising to decide how far advertising has been capable to fulfill firm’s
expectations. Advertising efficiency control mainly involves measuring cost efficiency or
contribution efficiency.

Common criteria used for measuring advertising efficiently include:

o Advertising cost per thousand target customers reached by a specific media

vehicle, for example, television medium.

o Percentage of audience who read, noted, or saw message from print media.

o Customer opinion on advertising contents and effectiveness.

o Measurement of pre-post (before-after) advertising impact on attitudes of people

toward the product.

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o Number of inquiries generated by advertising.

o Cost per inquiry.

o Media suitability.

o Impact of advertising on personal selling, sales promotion, public relations,

publicity, and distribution.

o Need and performance of advertising agency, etc.

Manager can compared efficiency of advertising programme with internal as well as external
standards to judge comparative efficiency. He must find out causes leading to inefficiency.

3. Sales Promotion Efficiency Control:

This control is exercised by sale manager. Sometimes, sales promotion manager is also
appointed to deal with the issue. Sales promotion efficiency measures the impact of sales
promotion efforts on sales, profits, competitiveness, and consumer satisfaction. Such efforts
include offering a wide range of short-term incentives to stimulate buyer interest and consumer
trial. Sales promotion is, no doubt, costly, but it seems essential. Here, manager tries to measure
costs and impact of each of sales promotion tools. Normally, sales promotion tools are applied at
three levels – customer level, dealer level, and sale force level

4. Distribution Efficiency Control:

In an average, distribution costs account for 20 to 30 per cent of selling price. By a suitable
distribution network, company can improve its profitability on one end and consumer
satisfaction on the other end. Therefore, it is necessary to review or assess the entire distribution
system periodically. Distribution efficiency control measures how far company’s distribution
system is efficient to achieve marketing goals.

5. Marketing Research Efficiency Control:

Marketing research is process of gathering, analyzing, and interpreting data relating to any
marketing problem. Due to dynamic nature of marketing environment, a company needs data on
various relevant variables time to time. Marketing research is an expensive option. It is
imperative for a firm to know how far marketing research efforts and costs are instrumental in
achieving marketing goals. It provides necessary details to improve research policies and
practices.

4.Strategic Control:

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Strategic control implies a critical review of overall marketing effectiveness in relation to broad
and long-term objectives and firm’s response to marketing environment. It deals with assessing
firm’s ability to define and achieve marketing goals, and response pattern to environment.
Normally, strategic control verifies company’s long-term performance with reference to the close
competitors. Here, entire marketing system is reviewed to judge firm’s overall strengths and
weaknesses. It answers the question: How far is the firm capable to exploit emerging marketing
opportunities and face challenges and threats?

Methods or Tools:

As shown in Figure 3, four tools are used for strategic control – the marketing effectiveness
review, the marketing audit, the marketing excellence review, and the ethical and social
responsibility review. Let’s discuss each of them.

1. The Marketing Effectiveness Review:

It involves a review of overall marketing performance. It helps finding effectiveness of several

business plans in term of sales growth, market share, and profitability. Attempts are made to
detect causes for good-performing marketing department and poor-performing department.

Common criteria:

They include:

i. Company’s Customer Philosophy:

It shows company’s approach toward customers.

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ii. Integrated Marketing Efforts:

It shows the way company integrates efforts of all divisions and departments for achieving
marketing goals.

iii. Marketing Information:

It studies company’s policies and practices to collect, use, and disseminate critical information
on a regular basis.

iv. Company’s Strategic Orientation:

It shows company’s broad and long-term plans for survival and growth. It also indicates firm’s
long-term plans for profits, sales, and expansion.

v. Operational Efficiency:

It shows how efficiently a company managing its current operations.

2. The Marketing Audit:

Another alternative tool for critical review of overall marketing performance is the marketing
audit. Audit means to examine systematically. It is systematic examination/investigation of all
critical aspects of marketing department.

Philip Kotler defines: “A marketing audit is a comprehensive, systematic, independent, and

periodical examination of a company’s marketing environment, objectives, strategies, and
activities with a view to determine problem areas and opportunities, and recommending a plan of
action to improve the company’s marketing performance.”

Key characteristics of marketing audit have been discussed below:

i. Comprehensive:
The marketing audit covers all the major marketing activities of a business unit.

ii. Systematic:
It is a systematic examination of all marketing operations. It is a well-planned and orderly task.
All aspects are audited minutely. It indicates corrective actions to improve firm’s marketing
performance.

iii. Independent:
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Marketing audit is conducted objectively (bias-free) or neutrally. It includes self-audit, internal,

or external audit. However, the external audit is considered as the best one.

iv. Periodical:
The marketing audit should be conducted regularly to detect problems and avoid crisis.

v. Purposive:Its purpose is to find out marketing problem areas and opportunities. It

recommends actions to improve company’s marketing performance.
Components of Marketing Audit:
The marketing audit examines six major components of company’s marketing operations, such
as:

a. Marketing Environment Audit:

It examines impacts of micro and macro factors of marketing environment. Macro marketing
environment consists of demographic, economic, environmental (ecological), technological,
political and cultural factors. Micro marketing environment includes market segments,
customers, competitors, dealers, suppliers, facilitators, and general public’s.

b. Marketing Strategy Audit:

It examines company’s business mission, marketing goals and objectives, resources capacity, and
marketing strategies.

c. Marketing Organisation Audit:

It examines suitability of marketing organisation (structures) to implement marketing operations

effectively. It includes level, relations, authority- responsibility, communication, facilities,
organisation manual, etc.

d. Marketing System Audit:

It examines major systems like marketing information and research system, marketing planning
system, marketing control system, new product development system, etc.

e. Marketing Productivity Audit:

It examines company’s profitability for different products, territories, and channels. It also
examines cost-effectiveness for various operations.

f. Marketing Function Audit:

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It examines marketing mix elements such as product, price, promotion (advertising, sales
promotion, personal selling-sales force, publicity, and public relations), and distribution. For
each of the components, appropriate auditing questions are designed to examine how effectively
the company is performing. All relevant respondents like customers, suppliers, managers,
dealers, etc., are interviewed using these questions.
Finally, the auditor prepares marketing audit report. The audit report contains individual and
joint evaluation of main audit components (marketing areas). It detects strengths and weakness,
and recommends actions for improving marketing performance.

3. The Marketing Excellence Review:

This is more or less similar to market effectiveness review. But, here, some excellently
performing business units are taken as the base for evaluating firm’s performance. Here,
performance is reviewed relatively.

The marketing excellence review is used to judge how excellently the company is performing
with reference to high performing business units. A special instrument with adequate number of
criteria and appropriate scaling can be developed to judge poor, good or excellent performance.
Criteria used for the purpose include:

a. Market/customer orientation

b. Market segmentation

c. Product quality

d. Quality of services

e. Approach toward competition

f. Integration and alliance

g. Approach toward dealers

h. Dealing with other stakeholders

i. Social responsibility and national services, etc.

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Depending on result of the marketing excellent review, necessary actions are taken. Company’s
actions mainly include undertaking all possible steps to reach the level of excellently performing
business units.

4. The Ethical and Social Responsibility Review:

This review/verification decides whether firm’s marketing policies and practices are ethically
and socially true. Ethics are moral principles, norms, or standards of right or wrong. Every
business unit has social responsibilities toward a number of stakeholders.

In same way, marketing practices should be ethical with reference to moral norms, standards,
and values. Company’s products, policies, and practices should not have adverse impact on
customers, other stakeholders, and larger interest of society. Thus, here company tries to assess
its ethical and social responsibility. As per need, necessary actions are taken.

Criteria used to review social and ethical responsibility include:

a. Clear definitions of illegal, immoral, and antisocial activities.

b. Company’s active efforts to practice, promote, and disseminate moral principles and to hold
its employees fully responsible to observe them in practice.

c. Company’s direct contribution for social welfare of people.

d. Fulfilment of social responsibility toward various parties.

e. The adherence to all laws and regulations in force.

f. Use of business ethics in areas of product, price, promotion and distribution.

On the basis of ethical and social review, company can evaluate its performance in this regard
and, if necessary, appropriate actions are taken.

https://www.slideshare.net/silpaHlu/fast-changing-consumer-behaviour-in-india

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