THE MARKETING AUDIT

MARKETING AUDIT

- Comprehensive, systematic, independent,

periodic examination of a company’s – or
business unit’s:
ú marketing environment
ú objectives
ú strategies, and
ú activities
§ To determine problem areas and opportunities
and
§ To recommend a plan of action
ú to improve the company’s marketing performance.
MARKETING AUDIT

Examines six major components of the

company’s marketing situation:
§ Marketing Environment (Macro and Task)
§ Marketing Strategy
§ Marketing Organization
§ Marketing Systems
§ Marketing Productivity
§ Marketing Function
Reference: Marketing Management by K. Keller and P. Kotler
THE MARKETING EXCELLENCE REVIEW

Marketing Review Instrument

MARKETING CONTROL

Types of Marketing Control

MARKETING EVALUATION
Some evaluative/analytical tools used in auditing
the marketing area:
§ Sales Analysis
§ Market-Share Analysis
§ Marketing Expense-to-Sales Analysis
§ Market-Based Scorecard Analysis
§ Marketing-Profitability Analysis
§ Sales Force Efficiency
§ Advertising Efficiency
§ Sales Promotion Efficiency
§ Distribution Efficiency
SALES ANALYSIS
§ Measures and evaluates actual sales in relation to
sales goals.
§ 2 specific tools used :
ú Sales-variance analysis
ú Microsales analysis

1. Sales-variance analysis:
- measures relative contribution of different
factors (e.g., price decline, volume decline) to a
gap in sales performance.

2. Microsales analysis :
- looks at specific products, territories, etc. that
failed to produce expected sales.
MARKET-SHARE ANALYSIS
3 ways to measure market share:

1. Overall market share:

- company’s sales expressed as a percentage of total
market sales.

2. Served market share:

- sales expressed as % of total sales to served
market.
- Served market: all buyers able and willing to buy
co’s product.

3. Relative market share:

- market share in relation to its largest competitor.
MARKETING EXPENSE-TO-SALES
ANALYSIS
- Key ratio to watch in ensuring that the
company is not overspending to achieve sales
goals
- May consist of 5 component expense-to-sales
ratios:
- sales force-to-sales ;
- advertising-to-sales;
- sales promotion-to-sales;
- marketing research-to-sales; and
- sales administration-to-sales.
MARKET-BASED SCORECARD
ANALYSIS

§ 2 market-based scorecards that reflect

performance and provide possible early
warning signals may be used:

1. Customer performance scorecard:

- records how well the company is doing
year after year on such customer-based
measures as:
§ New customers
§ Dissatisfied customers
§ Lost customers, etc.
MARKET-BASED SCORECARD
ANALYSIS
2. Stakeholder-performance scorecard
- satisfaction of various constituencies with
critical interest in & impact on the
company’s performance is tracked:
- employees
- suppliers
-banks, etc.
MARKETING-PROFITABILITY
ANALYSIS

Step 1. Identify functional expenses

How much of each expense (salaries,
rent, supplies) was incurred in each
activity (selling, advertising, packing
and delivery, billing and collecting)?
MARKETING-PROFITABILITY
ANALYSIS

Step 2. Assign functional expenses to

marketing entities
How much functional expense
(selling, advertising, packing and
delivery, billing and collecting) was
associated with selling through each
type of retail channel (hardware,
garden supplies, department stores)?
MARKETING-PROFITABILITY
ANALYSIS

Step 3. Prepare a profit-and-loss

statement for each marketing entity.
SALES FORCE EFFICIENCY

§ Examples of key indicators of efficiency in a sales

territory:

ú Average number of calls per salesperson per

day
ú Average sales call time per contact
ú Average revenue per sales call
ú Average cost per sales call
ú Percentage of orders per 100 sales calls

§ The foregoing often reveals areas for

improvement.
ADVERTISING EFFICIENCY

§ Some statistics:
- Advertising cost per 1,000 target buyers
reached by media vehicle
- Consumer opinion on ad’s content &
effectiveness
- No. of inquiries stimulated by ad, etc.
§ To improve advertising efficiency:
ú Improve product positioning
ú Pretest messages
ú Look for better media buys
SALES PROMOTION EFFICIENCY

§ Sales promotion: stimulates buyer interest &

product trial
§ Some statistics:
- Display costs per sales peso
- % of coupons redeemed
- No. of inquiries resulting from
demonstration
DISTRIBUTION EFFICIENCY

§ Consider distribution economies in:

ú Inventory control
ú Warehouse locations
ú Transportation modes

Problem: distribution efficiency when sales