Marketing Audit
A Systematic, Critical & Impartial Review & Appraisal of The Marketing Environment and The Company’s Total Marketing Operations
Marketing Audit Framework
EXTERNAL AUDIT
(`UNCONTROLLABLE' FACTORS)
INTERNAL AUDIT
(`CONTROLLABLE' FACTORS)
THE MARKETING ENVIRONMENT
`MACRO' FACTORS MARKET TRENDS
COMPANY MARKETING OPERATIONS
MARKETING MIX ORGANISATION& SYSTEMS STRUCTURE
POLITICAL/LEGAL
COMPETITORS
PRODUCTS
ECONOMIC
CUSTOMERS
PRICING
PERFORMANCE
SOCIO-CULTURAL
PLACE
INFORMATION
TECHNOLOGICAL (P.E.S.T)
PROMOTION (4 P's)
PLANNING
1
Situation analysis internal – external
Company analysis Quantitative and qualitative resources of the firm Analysis of the competitors Which competitors have what potential? Strength-weakness analysis Strengths and weaknesses of the firm compared to the competitors.
SWOT Analysis
2
SWOT Analysis
strengths-weakness-analysis environmental analysis
External Environment Audit
WHERE ARE WE NOW? OPPORTUNITIES AND THREATS?
Macro environment: Economic: growth, inflation, interest rates, unemployment Socio/cultural: demographics, lifestyles, values, attitudes Technological: new product and process technologies, materials technologies Political/legal: taxation, anti-trust, health and safety Ecological: conservation, pollution, energy The Market: Market size, growth, trends and developments Customers: who are they? What are their choice criteria? How, when, where do they buy? How do they rate our marketing mix vis-à-vis our competitors? How does the market segment? What benefits does each segment seek? Balance of power in the marketing chain: channel attractiveness, backward and forward integration, physical distribution methods, logistical management systems Competition: Who are they - actual and potential? Market shares and size. Profitability. How do they conduct their business - objectives and strategies What are their strengths and weaknesses? Barriers to entry.
3
Results
• An ideal business is high in major opportunities and low in major threats. j th t • A speculative business is high in both major opportunities and threats. • A mature business is low in major opportunities and low in threats. • A troubled business is low in opportunities and high in threats.
Balanced Scorecard
Financials
Environment
Customers
Internal Processes
Learning & Innovation
Opportunities & Threats Strengths & Weaknesses
4
From 4Ps to 4Cs
The 4Ps framework offers a seller’s view. 4Cs translates this into a customer perspective. Four Ps Product Price Place Promotion Four Cs Customer Solution Cost to Customer Convenience Communication
Marketing Mix
PRODUCT Product variety Quality Design Features Brand name Packaging Sizes Services Warranties Returns PRICE List price Discounts Allowances Payment period P i d Credit terms
TARGET CUSTOMERS PLACE Channels Coverage Locations Inventory Storage Distribution
PROMOTION Advertising Personal selling Sales promotion Public relations Direct marketing
5
Effective Marketing Mix
MATCHES CUSTOMER NEEDS
CREATES A COMPETITIVE ADVANTAGE
EFFECTIVE MARKETING MIX
WELL BLENDED & CONSISTENT
MATCHES CORPORATE RESOURCES
Product Strategies
Product Positioning • Single Brand • Multiple Brands Product Repositioning • Among Existing Customers • Among New Customers • For New Uses Product Overlap • Competing Brands • Private Labels • OEM’s Product Scope • Single Systems • Multiple Systems Product Design • Standard Design • Customized Design Product Elimination • Line Simplification • Line Divestment New-Products • Improvement-Modification • Innovation • Imitation Product Diversification • Concentric • Horizontal • Conglomerate
6
Market Strategies
Market Scope • Single Market • Multiple Markets • Total Market Market Entry Strategy • First in the Market • Early Entry • Laggard
Market Geography • Local Market • Regional Markets • National Market • International Markets
Market Commitment Strategy • Strong Commitment • Average Commitment • Light Commitment
Market Dilution Strategy • De-marketing • Pruning of Marginal Markets • Key Markets • Market Harvesting
Promotional Strategies
Advertising
• • • • • • National advertising Retail/local advertising Advertising to increase demand Business-to-business advertising g Professional advertising Trade advertising
Sales Promotions
• • • • • • • • • • • • • Coupons, Sampling Premiums, Rebates Contests, POP materials Promotion allowances Merchandise allowances Price deals, Sales contests Trade shows Publicity Special publications Community activity participation Fund-raising Special event sponsorship Public affairs activities
Direct Marketing
• • • • • • Direct mail Catalogs Telemarketing Direct response Direct selling Interactive / Internet
Public Relations
Personal Selling
• Across the counter • Door-to-door • Institutional
7
Pricing Strategies
New-Product Pricing Differential Pricing Psychological Pricing Promotional Pricing
• Price skimming • Penetration pricing
• Negotiated pricing • Secondary-market
pricing
• Periodic discounting • Random discounting
Product-Line Pricing
• • • • • •
Odd-number Odd number pricing Multiple-unit pricing Reference pricing Bundle pricing Everyday low prices Customary pricing
• Price leaders • Special-event pricing • Comparison
discounting
• Captive pricing • Premium pricing • Price lining
Ansoff’s Matrix
Existing Products New Products Existing Markets Market Penetration Product Development
New Markets
Market Development
Diversification
Ansoff's matrix provides four different growth strategies: •Market Penetration - the fi seeks to achieve growth with existing products in their current market M k t P t ti h firm k hi h ih i i d i h i k segments, aiming to increase its market share •Market Development - the firm seeks growth by targeting its existing products to new market segments. •Product Development - the firms develops new products targeted to its existing market segments. •Diversification - the firm grows by diversifying into new businesses by developing new products for new markets.
8
Product-Market Growth Strategy
The Market Penetration strategy is the least risky since it leverages many of the firm's existing resources and capabilities. In a growing market, market simply maintaining market share will result in growth and there growth, may exist opportunities to increase market share if competitors reach capacity limits. However, market penetration has limits, and once the market approaches saturation another strategy must be pursued if the firm is to continue to grow. Market Development options include the pursuit of additional market segments or geographical regions. The development of new markets for the product may be a good strategy if the firm s core competencies are firm's related more to the specific product than to its experience with a specific market segment. Because the firm is expanding into a new market, a market development strategy typically has more risk than a market penetration strategy.
Product-Market Growth Strategy
A Product Development strategy may be appropriate if the firm's strengths are related to its specific customers rather than to the specific product itself. In this situation, situation it can leverage its strengths by developing a new product targeted to its existing customers. Similar to the case of new market development, new product development carries more risk than simply attempting to increase market share.
Diversification is the most risky of the four growth strategies since it requires both product and market development and may be outside the core competencies of the firm. However, diversification may be a reasonable choice if the high risk is compensated by the chance of a high rate of return. Other advantages of p y g g diversification include the potential to gain a foothold in an attractive industry and the reduction of overall business portfolio risk.
9
Corporate Growth Strategies
Current Products Current Markets t
Market Penetration Strategies
• • • • • Increase market share Increase product usage Increase frequency of use Increase quantity used New applications
New products
Product Development Strategies
• Product improvements • Product-line extensions • New products for same market
Market Development Strategies
Diversification Strategies
• Vertical integration Forward/backward integration • Diversification into related businesses (concentric diversification) • Diversification into unrelated businesses (conglomerate diversification)
New Markets M
• Expand markets for existing products • Geographic expansion • Target new segments g g
Growth Strategies
Intensive Growth • Market Penetration • Market Development • Product Development Integrative Growth Diversification Growth
g • Backward Integration • Concentric Diversification • Forward Integration • Horizontal Diversification • Horizontal Integration • Conglomerate Diversification
10
Strategic Planning Gap
Desired Sales Diversification growth Integrative growth Strategic Planning gap
Sales
Intensive growth
Current Portfolio 0 5 10
Time (years)
11
doc_791535399.pdf
A Systematic, Critical & Impartial Review & Appraisal of The Marketing Environment and The Company’s Total Marketing Operations
Marketing Audit Framework
EXTERNAL AUDIT
(`UNCONTROLLABLE' FACTORS)
INTERNAL AUDIT
(`CONTROLLABLE' FACTORS)
THE MARKETING ENVIRONMENT
`MACRO' FACTORS MARKET TRENDS
COMPANY MARKETING OPERATIONS
MARKETING MIX ORGANISATION& SYSTEMS STRUCTURE
POLITICAL/LEGAL
COMPETITORS
PRODUCTS
ECONOMIC
CUSTOMERS
PRICING
PERFORMANCE
SOCIO-CULTURAL
PLACE
INFORMATION
TECHNOLOGICAL (P.E.S.T)
PROMOTION (4 P's)
PLANNING
1
Situation analysis internal – external
Company analysis Quantitative and qualitative resources of the firm Analysis of the competitors Which competitors have what potential? Strength-weakness analysis Strengths and weaknesses of the firm compared to the competitors.
SWOT Analysis
2
SWOT Analysis
strengths-weakness-analysis environmental analysis
External Environment Audit
WHERE ARE WE NOW? OPPORTUNITIES AND THREATS?
Macro environment: Economic: growth, inflation, interest rates, unemployment Socio/cultural: demographics, lifestyles, values, attitudes Technological: new product and process technologies, materials technologies Political/legal: taxation, anti-trust, health and safety Ecological: conservation, pollution, energy The Market: Market size, growth, trends and developments Customers: who are they? What are their choice criteria? How, when, where do they buy? How do they rate our marketing mix vis-à-vis our competitors? How does the market segment? What benefits does each segment seek? Balance of power in the marketing chain: channel attractiveness, backward and forward integration, physical distribution methods, logistical management systems Competition: Who are they - actual and potential? Market shares and size. Profitability. How do they conduct their business - objectives and strategies What are their strengths and weaknesses? Barriers to entry.
3
Results
• An ideal business is high in major opportunities and low in major threats. j th t • A speculative business is high in both major opportunities and threats. • A mature business is low in major opportunities and low in threats. • A troubled business is low in opportunities and high in threats.
Balanced Scorecard
Financials
Environment
Customers
Internal Processes
Learning & Innovation
Opportunities & Threats Strengths & Weaknesses
4
From 4Ps to 4Cs
The 4Ps framework offers a seller’s view. 4Cs translates this into a customer perspective. Four Ps Product Price Place Promotion Four Cs Customer Solution Cost to Customer Convenience Communication
Marketing Mix
PRODUCT Product variety Quality Design Features Brand name Packaging Sizes Services Warranties Returns PRICE List price Discounts Allowances Payment period P i d Credit terms
TARGET CUSTOMERS PLACE Channels Coverage Locations Inventory Storage Distribution
PROMOTION Advertising Personal selling Sales promotion Public relations Direct marketing
5
Effective Marketing Mix
MATCHES CUSTOMER NEEDS
CREATES A COMPETITIVE ADVANTAGE
EFFECTIVE MARKETING MIX
WELL BLENDED & CONSISTENT
MATCHES CORPORATE RESOURCES
Product Strategies
Product Positioning • Single Brand • Multiple Brands Product Repositioning • Among Existing Customers • Among New Customers • For New Uses Product Overlap • Competing Brands • Private Labels • OEM’s Product Scope • Single Systems • Multiple Systems Product Design • Standard Design • Customized Design Product Elimination • Line Simplification • Line Divestment New-Products • Improvement-Modification • Innovation • Imitation Product Diversification • Concentric • Horizontal • Conglomerate
6
Market Strategies
Market Scope • Single Market • Multiple Markets • Total Market Market Entry Strategy • First in the Market • Early Entry • Laggard
Market Geography • Local Market • Regional Markets • National Market • International Markets
Market Commitment Strategy • Strong Commitment • Average Commitment • Light Commitment
Market Dilution Strategy • De-marketing • Pruning of Marginal Markets • Key Markets • Market Harvesting
Promotional Strategies
Advertising
• • • • • • National advertising Retail/local advertising Advertising to increase demand Business-to-business advertising g Professional advertising Trade advertising
Sales Promotions
• • • • • • • • • • • • • Coupons, Sampling Premiums, Rebates Contests, POP materials Promotion allowances Merchandise allowances Price deals, Sales contests Trade shows Publicity Special publications Community activity participation Fund-raising Special event sponsorship Public affairs activities
Direct Marketing
• • • • • • Direct mail Catalogs Telemarketing Direct response Direct selling Interactive / Internet
Public Relations
Personal Selling
• Across the counter • Door-to-door • Institutional
7
Pricing Strategies
New-Product Pricing Differential Pricing Psychological Pricing Promotional Pricing
• Price skimming • Penetration pricing
• Negotiated pricing • Secondary-market
pricing
• Periodic discounting • Random discounting
Product-Line Pricing
• • • • • •
Odd-number Odd number pricing Multiple-unit pricing Reference pricing Bundle pricing Everyday low prices Customary pricing
• Price leaders • Special-event pricing • Comparison
discounting
• Captive pricing • Premium pricing • Price lining
Ansoff’s Matrix
Existing Products New Products Existing Markets Market Penetration Product Development
New Markets
Market Development
Diversification
Ansoff's matrix provides four different growth strategies: •Market Penetration - the fi seeks to achieve growth with existing products in their current market M k t P t ti h firm k hi h ih i i d i h i k segments, aiming to increase its market share •Market Development - the firm seeks growth by targeting its existing products to new market segments. •Product Development - the firms develops new products targeted to its existing market segments. •Diversification - the firm grows by diversifying into new businesses by developing new products for new markets.
8
Product-Market Growth Strategy
The Market Penetration strategy is the least risky since it leverages many of the firm's existing resources and capabilities. In a growing market, market simply maintaining market share will result in growth and there growth, may exist opportunities to increase market share if competitors reach capacity limits. However, market penetration has limits, and once the market approaches saturation another strategy must be pursued if the firm is to continue to grow. Market Development options include the pursuit of additional market segments or geographical regions. The development of new markets for the product may be a good strategy if the firm s core competencies are firm's related more to the specific product than to its experience with a specific market segment. Because the firm is expanding into a new market, a market development strategy typically has more risk than a market penetration strategy.
Product-Market Growth Strategy
A Product Development strategy may be appropriate if the firm's strengths are related to its specific customers rather than to the specific product itself. In this situation, situation it can leverage its strengths by developing a new product targeted to its existing customers. Similar to the case of new market development, new product development carries more risk than simply attempting to increase market share.
Diversification is the most risky of the four growth strategies since it requires both product and market development and may be outside the core competencies of the firm. However, diversification may be a reasonable choice if the high risk is compensated by the chance of a high rate of return. Other advantages of p y g g diversification include the potential to gain a foothold in an attractive industry and the reduction of overall business portfolio risk.
9
Corporate Growth Strategies
Current Products Current Markets t
Market Penetration Strategies
• • • • • Increase market share Increase product usage Increase frequency of use Increase quantity used New applications
New products
Product Development Strategies
• Product improvements • Product-line extensions • New products for same market
Market Development Strategies
Diversification Strategies
• Vertical integration Forward/backward integration • Diversification into related businesses (concentric diversification) • Diversification into unrelated businesses (conglomerate diversification)
New Markets M
• Expand markets for existing products • Geographic expansion • Target new segments g g
Growth Strategies
Intensive Growth • Market Penetration • Market Development • Product Development Integrative Growth Diversification Growth
g • Backward Integration • Concentric Diversification • Forward Integration • Horizontal Diversification • Horizontal Integration • Conglomerate Diversification
10
Strategic Planning Gap
Desired Sales Diversification growth Integrative growth Strategic Planning gap
Sales
Intensive growth
Current Portfolio 0 5 10
Time (years)
11
doc_791535399.pdf