Auditing the Organisation

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A marketing audit serves as a potent instrument for evaluating the efficacy of a marketing strategy. This involves a meticulous analysis of the objectives, policies, and strategies embraced by the company’s marketing department, alongside an assessment of the methods and resources deployed to achieve these objectives. Such an audit becomes especially crucial during the scrutiny of two pivotal aspects:

  1. The Structure of the Marketing Department
  2. The Functioning of Marketing Systems

Conducting a comprehensive review of the marketing organization and its systems at least twice a year is strongly advised. This practice is prompted by the tendency of marketers to become engrossed in day-to-day operations, often overlooking the significance of periodic marketing audits.

Auditing the Marketing Organisation

Marketing organization audits encompass a methodical examination of the company’s organizational assets, which encompass human resources, structural framework, employee training and enrichment, research and development capabilities, motivational mechanisms, communication protocols, and inter-departmental collaborations. For optimal results, it is recommended that senior marketing professionals and Chief Marketing Officers collaborate closely with the Human Resource Management department to execute this audit seamlessly. An effective approach could involve amalgamating the marketing organization audit within the framework of the employees’ individual appraisal scheme.

In broad terms, the audit encompasses an assessment of the following areas:

  • Does the marketing director have adequate authority and responsibility for company activities that affect customers’ satisfaction?
  • Are the marketing activities optimally structured along functional, product, segment, end-user and geographical lines?
  • Are there good communications and working relations between marketing and sales?
  • Are managers able to plan profits or only sales volumes?
  • Is the cooperation between different marketing roles excellent?
  • Are there any groups in marketing that need more training, motivation, supervision or evaluation?
  • Are there any problems between marketing and manufacturing, R&D, purchasing, finance, accounting and/or legal that need attention?

Auditing The Marketing Systems

The marketing systems audit serves as a comprehensive evaluation of the company’s capacity to amass and dissect data. It delves into the company’s proficiency in orchestrating and overseeing marketing undertakings, while also scrutinizing the functionality of its marketing information system, planning mechanisms, and control systems. A robust marketing information system establishes the bedrock for meticulous marketing planning, encompassing a spectrum of data pertaining to economic trends, consumer purchasing behavior, market dynamics, competitive offerings, pricing structures, and insights derived from market research.

Operating as an integral facet of the broader management information system, the marketing information system operates as a decision support framework for four distinct systems:

  1. The internal accounting system, which generates a gamut of data through routine business activities. This encompasses not only financial and cost-related information but extends to all data acquired and produced within the organization.

  2. The marketing intelligence system, which contributes internal data by managing and administering business operations. This type of information is acquired in a less structured manner compared to formal marketing research and pertains to everyday developments in the marketing landscape.

  3. The marketing research system, which employs both pre-existing secondary data and freshly gathered primary data via desk and field research methods.

  4. The analytical marketing system, constituting the culminating component of the overarching marketing information system. While it doesn’t generate new data, it assimilates data from the aforementioned components, enhancing its value. This enhancement is achieved through the application of “management science” techniques, typically of a statistical nature. The outcome is data transformed into a more intelligible format for marketing decision-makers, subsequently laying the foundation for the formulation of marketing plans.

To guide your evaluation, consider the following inquiries:

  • Are our financial records in a form that permits important and regular sales analyses?
  • What adjustments could reasonably be incorporated in record keeping, in order to obtain key performance data in relation to markets and marketing?
  • What internal and external market and marketing surveillance systems exist?
  • Who in the organization is responsible for collection and dissemination of information?
  • Does any system exist to check (a) efficiency of collection, (b) accuracy of dissemination, (c) extent of utilization?
  • What constraints prevent greater exploitation of the available information?
  • Do the sales personnel’s reporting forms encourage collection and dissemination of market information?
  • How are sales calls reports used and with what frequency?
  • Do we feed back the use of sales calls reports to the individuals reporting?
  • Do sales calls provide information on market and individual customer sales opportunities?
  • What marketing research – internal and external – has been undertaken?
  • What factors were considered when deciding to undertake the research internally or externally?
    • special skill requirements
    • need for anonymity
    • total objectivity
    • existence of special resources or experience
    • knowledge of company and / or its markets
    • product / service knowledge
    • nature of the research problem
    • advantage of cross-industry fertilization
    • cost
    • timing
    • location
  • How was the marketing research data utilized?
  • Does the firm have a central source of market and marketing information?
  • Do we monitor multi-client studies being made available, or encourage agencies to undertake the examination of subjects of interest to us?
  • Are control procedures adequate to ensure that the annual plan objectives are being achieved?
  • Does management periodically analyse the profitability of products, markets, territories and channels of distribution?
  • Are marketing costs and productivity periodically examined?
  • Is the company well organised to gather, generate and screen new product ideas?
  • Does the company do adequate concept research and business analysis before investing in new ideas?
  • Does the company carry out adequate product and market testing before launching new products?

Concluding remarks

The landscape of marketing is undergoing an unprecedented transformation characterized by the influx of new technologies, relentless competition from all quarters, the disruptive emergence of start-ups, and innovative strategies. This dynamic environment necessitates a rapid adaptation or creation of inventive concepts, theories, and methodologies to effectively address emerging paradigms. Among the arsenal of tools available for this purpose, the technique of marketing auditing, while inherently challenging to implement, boasts a rich and venerable heritage as a diagnostic instrument within marketing management. Its role is paramount in furnishing valuable insights into the realm of activities, actions, and performance.

In essence, the marketing audit should ideally serve as the inaugural stepping stone for a multitude of meticulously considered managerial strategies. Paradoxically, despite the abundance of literature encompassing virtually every facet of the marketing domain, scant attention has been directed toward what is commonly regarded as one of the most invaluable management resources within this sphere. This omission underscores the need for a comprehensive exploration of the remarkable potential encapsulated within the practice of marketing auditing.

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