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Marketing Planning is a very essential tool for business and the first step towards, it is marketing audit.

(1) Describe and differentiate between internal and external marketing audit. Introduction:
The Marketing Audit The marketing audit has certain similarities to a financial audit in that it is a review or appraisal of your existing marketing activities. Carrying out the marketing audit provides the opportunity to review and appraise your whole marketing activity, enabling you to assess past and present performance as well as to provide the basis for evaluating possible future courses of action. Because the business environment is constantly changing, the marketing audit should be used as a reference tool, with constant updates reflecting changes in the external environment and your own internal business experiences. There are a number of tools and audit that can be used for example, SWOT analysis for the external environment as well as the internal environment. Other examples include the PEST and Five Forces Analyses, which focus solely on the external environment. In many ways the marketing audit clarifies opportunities and threats, and allows the marketing manager to make alterations to the plan if necessary. It considers the basics of the marketing audit, and introduces a marketing audit checklist. The checklist is designed to answer the question, what is the current marketing situation? For example lets consider the marketing audit three key headings: The Internal Marketing Environment The External Marketing Environment A review of our Current Marketing Strategy


The Internal Marketing Environment What resources do we have at hand? Meaning the five Ms 1. Men (labour). 2. Money (finance). 3. Machinery (equipment). 4. Minutes (time), 5. Materials (factors of production). There are also many questions which we should ask and they are as follows: How our marketing team is organised? How efficient is our marketing team? How effective is our marketing team? How does our market team interface with other organisations and internal functions? How effective are we at Customer Relation Management (CRM)? What is the state of our marketing planning process? Is our marketing planning information current and accurate? What is the current state of New Product Development?(Product) How profitable is our Product portfolio? (Product) Are we pricing in the right way? (Price) How effective and efficient is distribution? (Place) Are we getting our marketing communication right? (Promotion) Do we have the right people facing our customers? (People) How effective are our customer facing process? (Process) What is the state of our business physical evidence? (Physical Evidence) The external Marketing Environment As a market oriented organisation, we must start by asking- What is the nature of our customer? Such as 1. Their needs and how we satisfy them. 2. Their buyer decision processed consumer behaviour. 3. Their percentage of our brand, and loyalty to it. 4. The nature of segmentation, targeting and positioning in our markets.

What customers value and how we provide that value?

Customer Discovery Customer needs and how we satisfy them. Buyer decision process and consumer behaviour. Customer perceptions of our brand, and loyalty to it. Segmentation, targeting and positioning in our markets.

What is the nature of competition in our target markets? Our competitors level of profitability. Their number/concentration. The relative strengths and weakness of competition. The marketing plan and strategies of our completion. What is the cultural nature of the environment? Beliefs and religions. The standard and average levels of education. The evolving lifestyles of our target consumers. The nature of consumerism in our target markets. What is the demography of our consumers? Such as average age, levels of population, gender, make up and so on. How does technology play a part? The level of adoption of mobile and internet technologies. The way in which goods are manufactured. Information system. Marketing communications uses of technologies and media. What is the economic condition of our markets? Levels of average disposable income. Taxation policy in the target market Economic indicators such as inflation levels, interest rates, exchange rates and unemployment.


Is the political and legal landscape changing in any way? Laws for example copyright and patents. Levels of regulation such as quotas or tariffs. Labour laws such as minimum wage legislature.

A review of our Current Marketing Strategy What are our current objectives for marketing? What are our current market strategies? How do we apply the marketing mix? Is the marketing process being controlled effectively? Levels of staffing Staff training and development Experience and learning What is our market share? (total sales/trends/sales by product or customer or channel? Are we achieving financial targets (profits and margins/liquid and cash flow/debt: equity ratio/using financial ratio analysis) External and Internal Auditing: Whats the Difference? In order to compare and contrast the roles and responsibilities of external and internal auditors, as well as discuss the vast amount of career opportunities that comes with becoming an external or internal auditor, we must first define what they mean. The Institute of Internal Auditors (IIA) describes an internal auditor as one who performs an independent, objective assurance and consulting activity designed to add value and improve an organizations operations. An internal auditor helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. In contrast, an external auditor is defined as performing a periodic or specific purpose audit to determine, among other things, whether the accounting records provided are accurate and complete, prepared in accordance with the provisions of GAAP, and examine financial statements prepared from the accounts present fairly an organizations financial position, and the results of its financial operations. Now that we know the difference


between what an external auditor does versus an internal auditor, we may begin to describe the roles and responsibilities each has in the accounting field. External auditors have a great influence on the audit of internal controls through their audit activities, including conferring with management and their recommendations for improvement to internal controls. They provide important feedback on the efficiency of the internal control system. Specifically, external auditors examine on a test basis, transactions and records that support accompanying financial statements and the associated disclosures. They review the accounting principles applied and considerable estimates made by management, and evaluate the overall presentation of an organizations financial statements. Before an external auditor can conduct his responsibilities, however, they must comply with the generally accepted auditing standards. The most important being the independence the auditor must have in relation to the organizations he/she is auditing, and attaining the adequate training and proficiency to perform an audit. Internal auditors, on the other hand, evaluate and provide reasonable assurance of risk management and decide if internal control systems are implemented as intended to allow the organizations goals to be met. They report on deficiencies in the internal controls, issues involving risk management, and provide recommendations on how to improve in these areas. Security is also an area of expertise an internal auditor may have when employed by an organization. An internal auditor examines the security involving sensitive information that must be kept inside the organization. Other responsibilities include communicating with management and external auditors, constantly continuing their education, and provide support to an organizations anti-fraud controls.


(2) What are the impacts of a wrongly/inconsistent marketing audit on the organisation and its products and services?
Planning is a central part of the management task wherever you are working in the organization and the first stage should always be to clarify the current position. Controllable: different managers need to review different aspects of the business. The factors which can be controlled by the marketing manager can be primarily represented by the 7Ps of the marketing mix. Not controllable: issues of production capacity and sources of supply are of interest and of direct control. That said, marketing mix decisions and marketing activities do have a significant impact on these other department. Furthermore a wrongly marketing audit can cause many serious problems if not considering the function of marketing audit as it clearly states about: products, price and distribution. Lets take the characteristics of services in terms of products: 1. Sold exclusively on the basis of benefits since there is no physical product to sell. Thus a good reputation and word of mouth publicity re crucial in marketing services. 2. Cannot be produced in anticipation of demand because they are consumed as they are produced. They cannot be stored in inventory. 3. Time utility is crucial because services cannot be stored. Time spent idle is lost forever. That is why appointments are usually required. 4. Cannot be produced in one location for consumption in another. This is one reason why service firms tend to be small. 5. Perish upon offering; a person who misses a music concert can never recapture it as it perishes as it is produced. 6. Once consumed it cannot be returned to seller. Consumers will be extra careful in selecting service vendors as a risk reducing method. 7. Quality control is tougher than for tangible products and may vary by time of day or servers attitude. All these mentioned above if not considered properly can really cause an impact on the organisation. Besides that there is also about the price and distribution how they are done and can cause an impact on the organisation.

Market Oriented Pricing The price of a product should be set in line with the marketing strategy. The danger is that if price is viewed in isolation (as would be the case with full cost pricing) with no reference to other marketing decisions such as positioning, strategic objectives, promotion, distribution and product benefits. The way around this problem is to recognize that the pricing decision is dependent on other earlier decisions in the marketing planning process. For new products, price will depend upon positioning, strategy, and for existing products price will be affected by strategic objectives.

Distribution Marketing channels are sets of interdependent organizations involved in the process of making a product or service available for use or consumption. Marketing channels decisions are among the most critical decisions facing management. The channels chosen intimately affect all the other marketing decisions. The companys pricing depends on whether it uses mass-merchandisers or high-quality boutiques. The firms sales forces and advertising decisions depend on how much training and motivation dealers need. This lead to channel conflict which means disagreement among marketing channel members on goals and roles---who should do what and for what rewards. Moreover through marketing channels there are often three types of conflicts which always arise and they are s follows: Vertical channel conflict means conflict between different levels within the same channel. Horizontal channel conflict conflict involves conflict between members at the same level within the channel. Multi channel conflict exists when the manufacturer has established two or more channels that sell to the same market. All these cause an impact on the organisation as well as on its products and services like one major cause is goal incompatibility. For example, the manufacturer may want to achieve rapid market penetration through a low-price policy. Dealers, in contrast may prefer to work with high margins and pursue short-run profitability. Sometimes conflict arises from unclear roles and rights. Conflict can also stem from different in

perception. The manufacturer may be optimistic about the short-term economic outlook and want dealers to carry higher inventory. Dealers may be pessimistic. Conflict might also arise because of the intermediaries dependence on the manufacturer. In addition to that an inconsistent marketing audit can cause these effects if not well considered like there are certain factors which should be paid attention while selecting advertising media. Selecting the appropriate media is an important decision to be made by the advertiser. Such a selection usually depends on a number of factors like the business environment, marketing conditions, marketing programme and the characteristics of each medium of advertising. Honestly speaking, there is no such universally accepted advertising medium, which can be considered best for all types of companies and every type of product or service. However, there are certain important factors that need to be considered while selecting suitable media by the advertisers. They are:

1. Nature of the product. 2. Market potential. 3. Distribution strategy. 4. Advertising objectives. 5. Requirement of message. 6. Cost of media.
An inconsistent marketing audit an effect on communication which acts as a barrier. The word barrier means block or an obstacle. There are a number of interpersonal and intrapersonal barriers that help to explain why the message that is decoded by the receiver is often different than that which the sender intended. In a work setting, it is even more common since interaction involves people who not only dont have years of experience with each other, but communication is complicated by the complex and often confliction relationships that exist at work. In a work setting, the following suggests a number source of noises: Language the choice of words or language in which a sender encodes a message will influence the quality of communication. Because language is a symbolic representation of a phenomenon, room for interpretation and distortion of the meaning exists. Different people will interpret the same words differently.


Perceptual biases people attend to stimuli in the environment in very different ways. Some of these shortcuts include stereotyping, projection and self-fulfilling prophecies. Stereotyping is one of the most common. This is when we assume that the other person has certain characteristics based on the group to which they belong without validating that they in fact have these characteristics. Interpersonal relationship how you perceive the communication is affected by the past experiences you had as an individual. Perception is also affected by the organizational relationship two people have. Example, communication from a superior may be perceived differently than that from a subordinate or peer. Cultural differences effective communication requires deciphering the basic values, motives, aspirations and assumptions that operate across geographical lines. Given some dramatic differences across cultures in approaches to such areas like time, space and privacy, the opportunities for communication while we are in crosscultural situation are plentiful. Filtering it refers to sender manipulating information so that the receiver will see it more favourably or what is required. Example, when you as a manager tell your boss what you feel, you say things that your boss wants to hear, you are filtering information. As information is passed up to senior executives, it has to be condensed and synthesised by underlings so those on top dont become overloaded with information. Filtering is most likely to occur in organization in which there is emphasis on status differences and among employees with strong carrier mobility aspirations. Selective perception the receivers in the communication process selectively see and hear based on their needs, motivations, experience, background and other personal characteristics.

I. II. III. IV. V.

Information overload. Defensiveness. Misreading of body language. Noisy transmission. Receiver distortion.


The last effect is sales promotion; it refers to the selling activities concerned with the promotion of sales but excludes personal selling, advertisement and publicity. Sales promotion is intended to stimulate consumer buying and dealer effectiveness. In simple words, sales promotion means promoting sales. It is specialized function of marketing carried in a way so as to stimulate consumer buying and is essentially aimed at creation of demand. Nowadays sales promotion has become a necessity for all business organizations, which supplement and coordinate personal selling and advertising. If not executed properly, sales promotion can damage brand equity by replacing the image of a product with price competition. Because of the variety of formats and techniques of promotion, care must be taken to coordinate the various messages of advertising and sales promotion. Some forms of promotion such as couponing have become so prevalent that they no longer provide a competitive differentiation for a brand and in fact may become a consumer expectation rather than a temporary sales boost. The success of sales promotion activities largely depends on the nature of the prospective buyers and product characteristics. To be specific, all sales promotional activities can hardly used may even have an adverse impact on the volume of sales as well as companys image. Many promotional measures have limited and shoot-run impact on the consumers. The benefits of these activities for the seller in most cases are limited and short lived. As soon as promotional devices are withdrawn, the demand for such products and services automatically declines. Sales promotion is a costly form of enhancing sales. It requires a heavy promotion budget. Therefore, it is not feasible for the small organisations having limited sales and promotional budget. Sales promotion activities become counter- productive when they are used to promote defective and poor quality goods and services.

To sum up the notes above are about what is marketing audit, its internal and external effects and also about how an inconsistent marketing audit has an impact on the organisation and its products and services.

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References In the university books (marketing planning & marketing) msn

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