Overview
In the marketing audit blog you will get to understand the concept, how marketing teams conduct different audits, what are advantages and how you can simplify the process of audits. The purpose of a marketing audit is to improve the performance of all the elements of the marketing mix.
Definition of marketing audit
A marketing audit is termed as a systematic, comprehensive, evaluation, interpretation and analysis of the specific business’s marketing environment including both external and internal.
The main idea, goal, strategy, objectives or principle lies to ascertain the segment of the problem, and opportunities and suggesting an action plan to endeavour the respective firm’s marketing performance.
An audit is usually conducted by a third person and not by a member of an organisation for greater objectivity and information. To analyses past performance and present marketing activities to identify functions that need attention for the future.
It helps to determine which strategies are working and thrones that are wasting budget. It builds up foundations for future marketing decisions. Moreover, it explains what the audience wants and needs to be served.
Characteristics of Marketing Audit
- A comprehensive audit must be executed that covers all areas of the problem under consideration from identification of the need to satisfaction of the desires of a customer.
- A systematic audit that explains evaluating micro and macro environments, orderly analysis, strategies, marketing principles etc that indirectly or directly influence the performance.
- An audit can be conducted in ways like an audit from across, a self-audit, a company auditing office, an audit from above, an outsider audit and a company task-force audit. As a result, a marketing audit should be independent. To remove bias, an outsider audit is considered best since the auditor is an external party to a company.
- There must be a periodical audit to rectify the issues at its source. However, it is generally preferred when a problem occurs in the marketing operations of the companies.
Importance of Marketing Audit
Apart from the formulation of marketing strategy, there are other ways in which the marketing audit benefits which are as follows:
- Firstly, the major contribution thatit provides is in-depth management and evaluation of business looking after effectively the planning, implementation and management of the marketing segment.
- The company discovers inefficiencies that they never knew existed. It do a SWOT analysis telling the strengths, weaknesses, threats and opportunities during the entire process. It pinpoints the perfect market activities, the practices that need improvement and the methods that are going extremely wrong.
- The findings and recommendations of the audit make the process of developing a marketing strategy easier through its systematic and structured approach.
- Before causing any serious damage, it showcases corrections to be made and catches mistakes and errors. As a result, the company can implement the desired or necessary changes and adjustments.
This must be noted that the audit majorly adds up to a great function for top management which counts decision making.
Marketing Audit Components
The marketing audit components basically include the external environment, internal environment and strategical ways that affect the audit which are as follows:
Marketing environment audit
There are two major categories under the marketing environment namely micro and macro environment.
Macro Environment
The factors influencing the firm’s marketing performance from outside becomes part of this category. They are majorly economic, demographic, political, technological and cultural.
- Demographic factors – gender, age, status, employment etc. of the consumers.
- Economic factors- assessment of taxation policies, looking at economic indicators such as inflation levels and interest rates.
- Cultural factors- a lifestyle of consumers and consumerism figures, religion, beliefs, etc.
- Environmental factors- technology used, the evolution of the internet, new marketing and information systems etc.
- Political factors- affect the economy like tariff regulations, property laws, lack of stability, other labour legislation etc.
Micro-environment
The micro-environment, however, covers the internal aspects of the marketing plan which the company controls. It includes staff performances, brand ambassadors, multi-channel marketing and marketing tools.
Task environment audit
The closely related factors linked to the firm like customers, markets, competitors, retailers, distributors, public, facilitators etc that hit the efficiency of the marketing programs include the task environment.
Marketing strategy audit:
It aims at focussing on the feasibility of marketing objectives, goals, business missions and strategies that directly impact the firm.
Marketing systems audit:
Planning, updating and maintaining the marketing audit checklist system are checked. The marketing systems can be marketing planning systems, marketing information systems, new product development systems and marketing control systems.
Marketing organisation audit:
This step is related to internal management where the performance of staff is evaluated by standing at different levels of hierarchy or checking formal structure, functional structure etc.
Marketing function audit:
It includes an eye on the core competencies or the 4Ps of the company such as price, product, marketing communication, distribution, supply chain management, promotion and sales force. However, the components exclude or include according to the type and requirement of the firm.
Marketing productivity audit:
Checking on the performance of marketing activities concerning cost-effectiveness and profitability (explains expenditure and profits on marketing).
Process for Marketing Audit
The reason to conduct an audit is different since companies have variable structures, priorities and goals. Therefore, there are no fixed guidelines for a marketing audit. However, a general approach can be framed which are as follows including three main phrases:
Pre-audit
Determine the person
The marketing audit first determines the key person who conducts the audit which has two options either a self-audit or an audit from outside.
Self-audit
The management forms a marketing audit group, inside the organisation of employees. They could evaluate their department, effectiveness, and marketing activities. However, if the management is scared that it may violate the independence then the auditing team may be staffed from another unit performing related functions.
Also, they may direct the executive with higher authority over the department being audited to perform their task. Few cases form task force teams composed of senior management. Large corporations might set up individual auditing units which will perform the task of audit exclusively.
Outside audit
The company hires an auditor from outside to perform the task. The person can either be an individual, practitioner, or agency specializing in this field.
An outside auditor considers reliable that guarantees objectivity and independence leading to an effective audit. It avoids the scope of biases and pre-judgement to hamper the results.
Determine the timing of the audit
The marketing sector is volatile and changes happen frequently. As a result, it must conduct regularly not just at the beginning but also at various intervals. The company should tweak its plan from time to time to ensure that the strategies are up-to-date and relevant.
Establish Objectives and Methods
To guide the members of the audit team, the objective of a marketing audit must be known. It provides a reference for identifying the next steps and identifying stakeholders involves in the audit indirectly or directly. Further, it states the methods, tools and techniques used in data analysis and collection by the auditors.
Audit proper
Classifying the methodology used earlier, the main audit process includes various steps and substeps which are as follows:
Data collection
It is stated as the time-consuming and tedious part of the entire process. Also, it can be quite expensive as well. Research work carries from various sources including standardised resources and publish data.
The next count is the historical marketing audit checklist which is termed as primary sources like marketing budget, systems, training plans, organisation structure with job descriptions etc. The auditors may also visit on-site for firsthand information or interview respondents to receive data. The data collected will pertain to the components discussed above.
Assemble an Overview
This step includes the basic terms that need to be known as company location, sales history, data established, key personnel, estimation of current awareness of the company, a chronology of company events( mergers, divestitures etc), number of employees and the perception of company on buying influencers.
Describing Market Goals and objectives
States whether the company is focusing on long-term goals (6-8 things in priority to be achieved in the next three years )or short-term goals (1-2 to be covered in one year).
They can be achieved by concepts like differentiating from competitors, increasing usage with existing customers, enhancing company visibility, increasing market share or audience size or generating qualified sales leads.
Current customers
This step involves knowing the size or current customer audience. The segmentation or behavioural descriptions and other demographic factors describe their needs and desires.
Target customers
This part of the marketing audit defines to know the type of target customers of the company. This includes behaviour to be present for retargeting, target customers outside the usual industry or change in current internal-external environment factors causing the company to target a particular group.
Describe the product or service
It includes looking after the company’s product features, pricing, benefits, distribution channels and sizing. Referring to the competitor’s strengths and weaknesses, any PESTEL factors that affect the product, current awareness of the product and market share history or changes over time.
Marketing encounters
The competitor’s actions used to grow the business, the factors not helping the current marketing effort and the methods or strategies not yet used form a part of marketing encounters in audit that needs to be identified.
Knowing major competitors
A company should follow the actions and activities of the major competitors from which they compare results. The strategies, campaigns, unique areas, name, location, features of product etc identified and studied.
Communication Plan
This step involves initiating action and making a marketing audit checklist of current or future resources. Therefore, identifies the funds for new efforts, advertising routes (broadcast, print online ads etc), media relations (public relations, articles etc), analytical vehicles(databases, tracking systems etc)and promotional vehicles(collateral, interactive, direct marketing etc).
Once all the areas are watched, it uses as a roadmap to achieve marketing objectives for the following year. Therefore, the audit helps to give a bigger picture of the new ideas along with minor adjustments which might be required throughout the year.
Data analysis
This step of the marketing audit defines as the core of the audit process, building a picture of a marketing program or strategies by subjecting collected data to analysis. The analysis should provide insight into performance, marketing team skills, alignment of objectives, execution and communication of the marketing plan. Therefore, some tools of data analysis are as follows:
1. Swot analysis ( strengths, weaknesses, opportunities and threats)
2. Five forces analysis
Competition in industry
Threat from the entry of new players
Customer power
Supplier power
The threat of substitute products
3. PEST/PESTEL analysisPreparation of Recommendations
The final layout of the audit process documents and termed a marketing audit report. However, the major concern of the beneficiaries or recipients is the recommendation section based on the results of the above analysis. As a result, while making recommendations, it should be present in a prioritized marketing audit checklist.
Post-audit
At last, the audit report presents to management, is used by them for decision-making. The recommendations might not be easily acceptable to the company. As a result, they have to go for long discussions with all parties to make them satisfied and comfortable by making marketing strategy decisions.
Steps that Simplify Marketing Audit
Knowing the step to conduct an audit refers to paying attention while gathering data through consumer interactions and using it for the company’s advantage. Following are the steps that simply the process.
Inventory creation for marketing assets
The company needs to make a marketing audit checklist of efforts that it wants to analyse during the audit. The comprehensive audit would involve gathering everything like an email newsletter, social media announcements, website blog posts etc. To reduce work stress last 6 months can be a target to collect data.
Aligning audit with goals
A baseline requires to measure the success of the company’s efforts. When the company knows what to achieve, they can find out the present marketing campaigns. Their compare with the standard and then look for the deviations. As a result, it helps to find out corrective measures in the marketing sector to achieve desired goals.
Gathering data on marketing performance
Tracking all the information about the marketing is need to be done. However, the return on investment each marketing channel is providing and the improvement requires from the report. As a result, a marketing campaign would always add up to sales with better word of mouth and social presence giving the company brand reach.
Comparing results from goals
Sometimes the marketing campaign that the company is using can lead to failing targets. But, there is a possibility that the goals are set too high or unrealistic with the marketing efforts. As a result, the company should compare the results of marketing campaigns with competitors in the same space.
Adapt and optimize
Lastly, with a vision of positive change through details of marketing audit, the company can improve return on investment or streamline its marketing budget. Working with the sales group and marketing audit agencies gives an idea of where the collection of data can be used in an actionable way. Like switching to different social media or driving employee advocacy adoption etc.
Frequently Asked Questions (FAQs)
what is the marketing audit?
It is a systematic, comprehensive, evaluation, interpretation and analysis of the specific business’s marketing environment including both external and internal. It is an assessment that is performed to analyze your current marketing strategy from top to bottom.
What are the 7 components of a marketing audit?
This is a seven-stage process. The stages in this process are,
- Task Environment Audit,
- Marketing Strategy Audit,
- Marketing Organization Audit,
- Marketing System Audit,
- Marketing Productivity Audit,
- Marketing Function Audit,
- Macro Environment Audit.
What is digital marketing audits?
A digital marketing audit consists of making analysis and review of all the actions and strategies that a company has carried out to improve its online presence and be able to draw conclusions from the results of them.
What is the objective of a marketing audit?
It is a systematic, objective review of an organization’s marketing function to verify marketing systems are accurate, relevant, reliable, and aligned with defined processes and best practices.