Northrise University

30029 Kitwe - Ndola Dual Carriage Highway. P.O Box 240271, Ndola, Zambia.

ASSIGNMENT COVER SHEET

Student ID: 1905368

Student Name: Mercy Munalula

Course Code: FIN304

Course Title: Auditing

Instructor Name:

Essay/Assignment Title: Responsibility of Managers and Internal Auditors for Systems and Internal Controls

Due Date:
Declaration:
I acknowledge that submitting this document binds me to the following:
To the best of my knowledge, I assert that no part of this assignment has been copied from the work of anyone else, be it another stude
or any other author or from any source except where due credit is given in the text below, or has been written for me by someone else
except where the relevant instructors and authorities have explicitly permitted such collaboration .

SIGNATURE:

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The Montana Mountain Biking Case 2

Introduction

This paper is going to discuss the importance of clearly setting the responsibilities of

management to those of internal auditors as they design systems and internal controls for the

organization and what could go wrong if these responsibilities are not clearly defined. As per the

foregone, the reminder of this paper is structured as follows; In the first section, the paper will

define organizational systems of internal controls. In the second section, the paper will discuss

why the responsibilities of management and internal auditors need to be set clear as they design

organizational systems of internal control and finally what could go wrong if these

responsibilities are not clear. In the last section, the paper will conclude the entire discussion.

Case Overview

Montana Mountain Biking Company has been in business for 16 years providing guided

mountain biking trips at four locations in Montana. The success of the company is linked to

retaining its customers. Eighty percent of the customers who sign up for the one-week guided

mountain biking expedition are repeat customers (University of Phoenix, 2007). An important

part of any marketing plan is to understand the customer relationship because ultimately, all

profits come from the customers. The challenges facing the Montana Mountain Biking company

is not only retaining customers but to attract new customers. The advances in e-marketing have

given Montana Mountain Biking some alternatives to traditional marketing plans.

The Five Stages of Customer Loyalty

Customer loyalty comes from the personal relationship that is developed between the

customer and the business. One method used to understand the customer relationship is called
The Montana Mountain Biking Case 3

customer relationship intensity and Life-cycle segmentation (UOP, 2007). This process includes

classifying all the customer relationships into one of five groups. The first of the five groups

include customers who are aware of the business or service. This is considered the weakest of the

groups because in the beginning of the relationship and the customer knows little or nothing

about the company. The second group of customers is those who have explored or expressed

interest in the products or services but have not made a purchase. These customers may see some

value in the product or service but is still exploring the various options available to them. The

third group is familiar customers or customers who have done business with the company. At

this stage, service and customer satisfaction are important to building customer loyalty. The

fourth stage is the commitment stage. In this stage, the customers are repeat buyers. Highly

committed customers will be the best sales tool for the customer. The customer is happy with

what they have experienced and is willing to recommend the business to their family and friends.

This person is in essence, a part of the marketing and sales team. The fifth and final stage is the

one that all businesses try to avoid, the separation stage (UOP, 2007). This happens when the

customer has filled their needs or when the company fails to provide continuous value to the

customer. The customer moves on to a new product or service.

The five Stages of MMB Customers

The success of the Montana Mountain Biking (MMB) Company is based on repeat

business from current customers (UOP, 2007). Increasing awareness and moving more

customers into the committed stage can only be achieved by understanding where the customers

are today. Awareness is the first of the five stages. One could estimate the size of the customers

in the awareness stage is relatively small in comparison to the market size. It could be estimated
The Montana Mountain Biking Case 4

that five percent of potential customers are aware of the business. This is based on the fact that

MMB logo is recognized in the mountain biking industry but the company is not actively

marking the company outside of operating a web site. The number of customers in the familiar

stage could be estimated to be between 5 and 10 %. This is base on the number of e-mails

received by the company from customers requesting additional information about the services

provided by MMB. As mentioned earlier, 80% of all the customers are repeat customers (UOP,

2007). These customers would fall in the familiar or committed stage. The final stage is the

separation stage and MMB will have to allow for a 5% or so of customers who will end their

relationship with MMB for one reason or another.

E-Mail Marketing Strategy for MMB

Companies are in a constant battle to gain new customers. E-mail marketing is a relative

new e-business tool that makes it easy to keep in touch with existing customer and can be used to

find new customers. E-mail marketing involves sending e-mails to potential customers. This

method can be broken down into two categories; random and permission marketing. E-mails that

are unanticipated by the receiver or e-mails that are just randomly sent by the company to an e-

mail address. The conversion rate is very low and most of the e-mails are deleted or blocked

before they are read. Permission marketing consists of sending e-mails to people who have

expressed interest in receiving information about the product or service (UOP, 2007). Permission

marketing usually involves purchasing a mail list from a company. This method is less costly

than traditional email marketing and can yield a higher conversion rate if done correctly. In the

case of MMB, permission marketing would be the most effective method for email marketing as
The Montana Mountain Biking Case 5

the company can target potential customers who have already expressed interest in outdoor

activities and mountain biking.

Affiliate Marketing for MMB

Montana Mountain Biking can develop a successful affiliate marketing strategy by partnering

with relevant websites and influencers, offering competitive commission rates and providing

high-quality promotional materials. They can also utilize social media platforms to build a strong

online presence and engage with potential affiliates. According to a study by Business Insider,

81% of brands use affiliate marketing, with the industry expected to reach $8.2 billion by 2022.

By leveraging the power of affiliate marketing, Montana Mountain Biking can increase brand

awareness and drive traffic to their website, ultimately leading to an increase in sales and

revenue (Forbes). By maintaining strong relationships with their affiliates and continuously

monitoring their program's performance, Montana Mountain Biking can create a successful and

sustainable affiliate marketing strategy (Entrepreneur).