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Create Your Marketing Strategy With A Marketing Audit

Create Your Marketing Strategy With A Marketing Audit

The marketing audit is a fundamental part of the marketing planning process. We find many companies do not use this technique when determining their marketing plans and budgets. And because of this they end up planning without measuring past performance.

Marketing accountability requires effective measurement of the performance of their marketing department.  It is essential to assist senior management’s decision-making and provides direction in shaping future strategy.

What Is A Marketing Audit?

A marketing audit is a structured approach to the collection and analysis of information and data on the internal and external environment, including information on the business and economic climate, the market, competition, major competitors and the company’s operating performance. The audit is an essential prerequisite to marketing strategy formulation

A marketing audit is a structured survey of company’s Marketing efforts. It looks at the way Marketing is planned and managed. Essentially, it asks what has worked and what has failed.

The purpose of a marketing audit is not to criticize particular activities, but rather to identify whether there are any working practices that could be more effective.

The golden rule in performing a market audit is that you must be objective and read the market as it actually is. The audit is based on market research activities and must be completely independent from research on the performance of your product, service, or business.

Characteristics Of The Marketing Audit

A valuable and successful marketing audit must have the following characteristics:

  • Comprehensive – The marketing audit covers all the major marketing issues facing an organization, and not only one or a few marketing trouble spots. The latter would be called a functional audit if it covered only the sales force, or pricing, or some other marketing activity.
  • Systematic – The marketing audit involves an orderly sequence of diagnostic steps covering the organization’s marketing environment, internal marketing system, and specific marketing activities. The diagnosis is followed by a corrective action plan involving both short-run and long-run proposals to improve the markets.
  • Independent – The marketing audit is normally conducted by an inside or outside party who has sufficient independence from the marketing department to attain top management’s confidence and the needed objectivity.
  • Periodic – The marketing audit should normally be carried out periodically instead of only when there is a crisis. It promises benefits for the organization that is seemingly successful, as well as the one that is in deep trouble.

How Often A Marketing Audit Should Be Performed?

If your business is in a constantly changing environment, then you should perform frequent audits. Some companies will perform a complete audit every year. Others will conduct an audit every four years, with modified versions used in between. Depending on the complexity of a given industry and the amount of growth or change it is experiencing, the timing of a marketing audit will differ.

The key is to perform a complete audit (to form a solid baseline) in establishing your marketing approach, and then update that information as you feel it is warranted.

Typically, we see Marketing audits occurring when a crisis has occurred and there is panic scrambling to discover the reasons why sales are in a steep decline. A marketing audit can be a useful measure at such times providing it has not arrived too late for recommendations to effect a turn around. A better procedure, therefore, would be to have had a regular audit when things appeared to be going well in the same way an apparently healthy individual might take a regular medical exam.

The Marketing Audit Process

The complete marketing audit process involves three major steps. These include:

  1. Pre-Audit Activities. Pre-audit activities involve determining who will conduct the audit and when it will be performed. It also involves establishing the scope, objectives and methodology.
  2. The Audit Process. The audit process itself involves a number of sub-steps:
    • Data Collection. Assembling the information about the overall environment, the industry, the company as well as the marketing mix is the most expensive and time-consuming aspect of the marketing audit.
    • Information Analysis. This involves evaluating the data collected in an attempt to provide a solid picture of the company’s marketing program: How well it meets the requirements of the marketing concept in providing for customer needs as well as corporate profitability, facing the competition, adapting itself to changes in the larger environment, and how efficient it is in doing this.
    • Preparing Recommendations. An audit report is prepared based on the strengths and weaknesses identified.
  3. Post-Audit Activities. After the audit report is prepared it must be shared with other key groups within the company. The findings and recommendations should be debated. Plans to implement recommendations complete with time table should be established.

The Marketing Audit Team

Selection of the appropriate people to perform the marketing audit is also crucial to its success. The auditor(s) must have experience, know-how, and creative imagination if they are going to be able to discover the problems and foresee opportunities.

Objectivity is also important. You wan to ensure the auditor is not too close to the system to see it clearly or may be reluctant for political reasons to find fault with co-worker’s or superior’s policies or their efficiency in implementing them.

There are essentially six types of audit methods ranking from least effective to most effective:

  1. Self-audit. A company can ask the executive who is directly in charge of an activity to appraise its strengths and weaknesses.
  2. Audit from across. A company can assign persons in a related activity on the same function level to prepare an audit of the neighboring activity.
  3. Audit from above. The audit can be conducted by the executive to whom the manager reports.
  4. Company auditing office. The company can establish an office with the responsibility for conducting all company marketing audits.
  5. Company task-force audit. The company can appoint a team of company executives with varied backgrounds and experience to conduct the audit.
  6. Outside audit. The company can hire an outside individual or agency to conduct the marketing audit.

Outside consultants provide the needed impartiality and generally are able to bring a broader range of experience as well as the most up to date audit methodologies into play. However, a combination of several of these techniques may work best for you.

Need help with an audit? Give us a call.

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About the Author Michael Klausner

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