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The Internal Environment

Internal Audit

Factors comprising internal environment

Organization Staff Culture Structure Management style MIS

The internal environment is what makes the organization and what it is and it drives from the people who are its members

After going through this module you should be able to: Explain the role of organization culture Describe the ways of managing change Explain how MIS can be constructed Show how MIS can used as effective competitive tool Describe the ways of monitoring and auditing strategy

Internal audit categories

The marketing strategy audit The Marketing organization audit The marketing system audit The marketing productivity audit The marketing functions audit

What is audit ?
To uncover and provide SNAPSHOT of the current state of affairs within the organization Objective is not to criticize the staff It is done in a transparent way by sharing the information that is used in the audit May be out side consultant for feasible It is in a way easy to perform as information required is readily available with the people concerned

Beware : People may perceive it a threat to their job They may give politically motivated answers or may avoid , modify or hide the information They may perceive that it is an attempt by the management to find faults in their work

Marketing Strategy Audit

Mission Statement Marketing strategy clear goals and objectives Examine core marketing strategy Budgeting and allocation of resources Are the objectives appropriate? Are the major policies and plans appropriate ? What assumption have been used in strategy formulation? Are they confirmed ?

Criteria for auditing the strategy for success

CONSISTANCTY CONSONANCE ADVANTAGE FEASIBILITY coordinating effectively response to PEST core competency addition Finance, HR motivation

Auditing the strategy is likely to be an organizational process probably undertaken as part of the normal planning reporting control and reward systems of the organization


Formal and Informal structures Both structures affect organization performance Informal structure thrives on corporate culture Organizations differ in their structures Hierarchical, Mechanical or Bureaucratic structures which is rigid Organismic organizational structure more adaptive and flexible to changes

Organismic organization

Functional efficiency audit

Is current structural systems type correct for the organizations marketing environment and goals Do marketing managers occupy the right level in the structure ? Should marketers be placed in more strategic roles? Are people clear about their roles and level of responsibilities and their impact on organizations performance ?

Marketing organization structured by product type

Marketing Information Systems

To automatic flow of data of every marketing/sales activity into databases Used as decision support systems (DSS) Market intelligence and research Sales reporting and analysis Sales planning Customer purchase behavior and trends Customers profiling and contacts Projections

developing CIS
Determine what needs should the CIS serve Determine the objectives of the system Set parameters and limitations What types of analytical reports it should be able to generate Involve direct users to determine its SW Simplicity in terms of distribution and layout Sorting capabilities of the system Update function and data security

Productivity Audit
The marketing productivity audit is concerned with two areas: Profitability analysis & effectiveness analysis Profitability is assessed in terms of profits made from each brand, product, By segment, by retail outlet Profitability analysis determines the worth of marketing opportunity ( cost versus benefits) Effectiveness is measure in terms of consumer awareness, effect of promotion on sales,

Resource and competency audit

Competency related to how strategic marketing objectives are achieved the way resources are combined and utilized Managers need resources combined with their competency skills to achieve targets Competency is defined in terms of firms knowledge, capability and attitude in a certain area of expertise

Elements of resource audit

Physical Resources Human Resources Financial resources Intangibles Resources

Marketing Value Chain Audit


Primary Activities
Inbound logistics Operations Outbound logistics Marketing communication Before and after sales service

Support Activities
Procurement HRM Finance R&D MIS Administration