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Marketing Audit Overview

This overview discusses the Marketing Audit, which is the final individual assignment in MKT 551. It will cover the following:

Ð'* What is a marketing audit?

Ð'* Why do a marketing audit?

Ð'* Tips and cautions for preparing a marketing audit.

Ð'* Components of a marketing audit, and the final assignment.

WHAT IS A MARKETING AUDIT?

To conduct an audit, according to Cambridge Dictionaries Online, is "to make an official examination of the accounts of a business" (2003). While the concept of an audit is commonly associated with the accuracy of financial reports, it is no less important for marketing. Many businesses judge the impact of their marketing program on sales numbers. While sales may be one measure of marketing effectiveness, sales data do not tell management what worked, what didn't, and what external factors impacted the results. Interpretation of sales data does not provide "report cards" for prior marketing efforts, or direction for future efforts. Whether conducted by an outside auditor or by in-house personnel, regular examinations of all aspects of the marketing function can provide information on the external environment; the internal organizational structure; and the objectives, strategies, and tactics used by a firm or a brand.

In Week One, SWOT analysis was covered. A marketing audit can provide the information needed to conduct a SWOT analysis. Conversely, in the absence of a Marketing Audit, an up-to-date SWOT analysis can provide benchmark data for a full audit.

WHY CONDUCT A MARKETING AUDIT?

"If we fail to learn from mistakes in the past, we are doomed to repeat them in the future."

A business, or a brand, that does not regularly examine its total marketing program cannot understand why it has succeeded or why it has failed. A business that thoroughly and objectively examines its marketing environment or program can take steps to improve on what worked well and modify or eliminate what worked poorly.

TIPS AND CAUTIONS FOR PREPARING A MARKETING AUDIT

There is a tendency in business to only conduct thorough reviews of any program when there are problems. All too often, that is too late. Marketing audits should be conducted at regular, scheduled, intervals. An ideal time to do an audit is just prior to preparing a marketing plan.

It is important that top management make it clear that all personnel who are asked to contribute to the audit provide full cooperation to the audit team, and that the analysis be objective. An audit conducted to justify/rationalize past actions may be worse than no audit at all. The ramifications of a marketing audit planned to produce favorable results can be as severe as the ramifications of a biased financial audit.

In considering which organization you, as a student, want to use for your marketing audit, keep the following in mind:

Ð'* Will the information I need be available from public sources?

Ð'* If I want to use my own organization as the subject, can I do so without violating confidentiality agreements?

Ð'* A wealth of corporate data is available in the University of Phoenix Library. Databases such as Hoovers are there for your use, without fee. Both the Library and corporate Web sites offer annual reports, 10K reports, and other relevant material. Use the resources available to you. It will make the task easier and the outcome more accurate.

Ð'* There will be elements of a marketing audit that are corporate secrets. When that happens, you may include what you would expect the audit to show and the reasons for your expectations. (Example: It is unlikely that you will be able to discover the specific methods an organization uses to research potential new products. However, based on their pattern of new product introductions, you can draw reasonable conclusions as to their research process).

COMPONENTS OF A MARKETING AUDIT

Note: This is a "typical" list of components in a marketing audit. Organization or industry circumstances may dictate that items be added or deleted.

1. Executive Summary (required for final Marketing Audit)

In preparing the executive summary, keep in mind that the summary will probably be the only part of the audit top management will review. It will be assumed that the full document provides all the support needed to reinforce both your conclusions and recommendations. For that reason, it is imperative that any claims you make in the summary be fully documented in the full audit, and that no conflicts exist between the summary and the audit. As you plan the summary, decide which conclusions and recommendations you consider the most important for management to accept. You may wish to consider, if applicable, enhancements to the marketing mix, optimization of marketing resources, and strategic/tactical-marketing adjustments in response to changes in the organization's environments. You will also need to consider additional categories. In most cases, major changes are needed in some of these areas as well.

Your summary should be 700-1,400 words that highlight the conclusions from each section of the audit. Key findings and supporting data can be in bullet format. Conclude with a summary of recommended future action.

2. Table of Contents (required for final Marketing Audit)

3. Environmental Aspects (include any 3 of the 10 elements in this section in the final Marketing Audit. You may, with the approval of your instructor, add an item to this section, and include it as one of the three in your final paper)

a. EconomicsÐ'--How have changes in the economy impacted the organization or brand? Have changes in interest rates, labor costs, raw materials costs, consumer spending, bad debt ratios, exchange rates, or other economic factors impacted the organization or brand? Is it sufficient to respond to just the domestic economy, or do multinational considerations apply? What adjustments were made? Have they succeeded? What additional adjustments are being contemplated? Why?

b. DemographicsÐ'--How have population and other demographic trends impacted the organization or brand? What adjustments have been made in response to those