What is a marketing audit?
A marketing audit has many similarities to that of a financial audit…
A marketing audit is essentially an appraisal of your existing marketing activities. It provides an opportunity to review and appraise all your marketing activity, enabling you to assess past and present performance as well as evaluating possible future courses of action.
The audit will help your business to understand its existing and prospective customers and help the organisation anticipate any possible problems with its product or service offering as well as creating any necessary changes to strategy, target groups and deployment of the products.
Due to the business environment constantly changing (the latest recession being a perfect example) it is imperative that the audit is planned periodically so that your marketing activities can be aligned to the constantly changing environment.
The audit will be constructed broadly into three groups:
- The economic environment.
- The competitive environment.
- Your own market environment.
It is extremely important to consider these areas from your own business’s point of view:
- Will any changes have a direct impact on your business?
- Will they affect your competitors?
- Will they allow you to compete in new markets?
All of these questions need to be considered and if the answer is yes, then all factors should be explored in the audit.
Philip Kotler defines the marketing audit as ‘a comprehensive, systematic, independent, and periodic examination of a company’s strategies, objectives, activities, and environment, designed to reveal problems and opportunities, and to recommend actions that would improve the company’s marketing performance.’
If utilised correctly and periodic audits are carried out, the process can provide the following benefits for your business:
- Provide a comprehensive look at every market, channel, competitor, customer and mix element.
- Reduce the need for crisis management.
- Identification of information needs.
- Force the internal organisation to understand objectives and drive growth.
- Provide opportunities for growth and the ability to obtain a sustainable competitive advantage.
- Offers a good starting point for performance measurements and a framework for effective business planning to maximise positive external perception and current levels of demand.
- An unrestricted look at effective and ineffective practises in order to refine and improve productivity and profitability.
- Aids in strategic marketing change, with the view to reassessing the overall direction of the company.
It has to be said that the marketing audit does carry some limitations for businesses, for example the process is usually only conducted periodically and is not a regular review of marketing performance.
Additionally, the process can sometimes prove to be fairly complex and does require focus and time to ensure that any defined problems are addressed and practical solutions are implemented. It is important the correct resources are allocated and that time can be given to the audit results.
Taking these limitations into consideration is important but overall the audit will help your business to determine accurate customer needs – which is ultimately what we all want to achieve!
So in a nutshell, the audit will involve diagnostic steps covering the entire marketing environment and will provide insight into the overall improvement of marketing planning which in turn will improve your marketing efficiency and effectiveness.