Modern times have seen a radical change in business practices once considered as traditional. Marketing has been one of these areas forced to adapt to the changing era. As a business function, marketing is increasingly under a lot of pressure to find new ways to not only improve with time but also to add on the overall effectiveness of the company (Da Gama, 2012). Thus, marketing can be defined as an activity set by institutions for exchanging, delivering, communicating, and generating offerings that have value for customers, clients, partners, and the society as a whole (Tuten and Solomon, 2017). Depending on the position of the company, many often feel the need to employ marketing audit in business operations, but the real question is what it should involve. “Marketing audit is typically defined as a complete, precise, free and cyclic examination of company’s marketing situation and activities to determining problem areas and opportunities and recommending a plan of action to improve the company’s marketing performance (Al Fahad et al. 2016, pg. 215)”. As such, this paper analyses whether a full-scale marketing audit is still relevant to marketing managers in today’s increasingly dynamic marketplace.
Literature Review: The Role of Marketing Audit
The volatility of the markets in the 1970s raised an increased awareness of marketing audit in most companies. However, the concept was initially defined in 1959 in American marketing Associations reports (Kotler and Keller, 2007). During the mid-1950, the idea was becoming intimately allied with managerial marketing literature. Parmalee coined the term marketing audit and introduced to literature. According to Parmalee, it is supposed to address three main concerns. These are the organisation’s vision regarding marketing, the value of the product, and the efficacy of the strategies used (Parmerlee, 2000). Therefore, the conceptualization of marketing has come a long way.
Over the years, the concept has evolved to take a unified shape for most organizations. The use of marketing audit has relatively remained constant since it allows the company to implement quality strategies within an area while considering possible ways that the process of marketing can be re-engineered to be more efficient for the organization (Taghian and Shaw, 1998). Based on McDonald’s collection, analysis and dissemination of information are necessary for managers to cope up with the changing environment and take advantage of the business opportunity (McDonald, 1984). Marketing managers typically have several predefined tools at their disposal: They include marketing information systems (MkIS) and Marketing Decision Making Support Systems (MkDSS) (Taghian and Shaw, 1998). These two tools provide a continuous stream of data with which to work within the technology-based decision-making. Careful analysis often proves useful in utilizing tools. Additionally, managers have access to action oriented and necessary data through MkIS (Taghian and Shaw, 1998). This device, however, has been found to be a bit narrow to consider all possibilities decision efficiently making. All the existing literature on the matter offer no information to contradict the benefits provided by marketing audit to companies (Al Fahad et al. 2016). Thus, marketing audit has had defined characteristics since its inception in 1950 which help in appropriate decision-making.
Elements of marketing
Although the attention-marketing audit has generated over the years, little has been done to establish a standard model for employing the concept. Several writers over the years have tried to settle the matter, often through proposing broad assertions and parameters while conducting the audit. Kotler recommended the use of questionnaires to collect the information required (Al Fahad et al. 2016). Although marketing auditors may opt to use a variety of methods to gather their data, how the managers develop, debate, and assimilate their concepts is the most critical part. After the gathering is completed, the marketing auditor usually prepares a presentation (Vaňa and Černá, 2012). This review is either verbal or visual and entails a restating of the objectives of the audit. Most people agree on this central outlay and the fact that the process five requirements (Al Fahad et al. 2016). Mainly, a particular marketing goal and mission has to be set. Additionally, a clear and realistic marketing plan is required. All pre-existing data concerning marketing performance is usually taken into account. Companies also ensure proper accounting and reporting followed. Furthermore, database management is required. Lastly, individual enterprises develop their SWOT analysis, PEST analysis and potters five forces (Al Fahad et al. 2016). Therefore, there is little consensus on the implementation process of marketing audit, but several elements are accepted.
The nature of the marketplace
The marketplace is ever changing by increasingly becoming more and more complicated. Various industries, therefore, have recognized the role this variation plays in the strategic planning of the organisation. In conformity, many firms appear to align with these changes to survive and grow in the future (Picard, 2004). Most of the changes in the marketplace are driven by nature of the society and the environment. Complexity can be defined as the difficulty placed on a firm for operating in the market. The company engaging the various markets understands the growing amount of competition (Picard, 2004). Competition naturally increases the complexity of any market. Additionally, most markets are filled with organisations that produce multiple products and operate in more than one market, which significantly increases complexity (Tuten and Solomon, 2017). Therefore, markets are always developing with the increase in segments, competitors necessitating new strategies.
Market turbulence usually follows complexity in the marketplace. Here, there is typically a lack of clear direction for most of the organisations (Picard, 2004). Firms appear uncertain of outcomes and lack information necessary for decision-making. A turbulent marketplace promotes the need for quick innovation, which invites new companies into the market. At the same time, firms that cannot keep up with the pace are forced to exit (Kotler and Keller, 2007). Thus, undetected market turbulence results in catastrophic results for the organization.
Preparedness in the marketplace can help mitigate or even prevent the said results. Existing information gathering methods employed in market auditing, however, lack the comprehensive and integrated designs to adequately combine entire marketing functions while proving strategic recommendations during turbulent times. Research conducted in the marketplace, however, indicated that market audit was directly related to a company’s market share. Furthermore, the organisation’s familiarity with the concept was found to improve their performance in the marketplace (Taghian, Shaw, 1998). The use of marketing audit appears to be linked directly to the company’s age. Accordingly, organisations implementing marketing audit may have a slight advantage over their counterparts.
Macro-environments
Macro-environments deal with what the position of the firm as opposed to what they sell. This concept examines six essential fields of dependency regarding the company’s involvement in business (Al Fahad at al., 2015). These include demographics, economic, environmental, technological, political and cultural audits. The areas covered here are broadly grouped but intimately influence an organisation in their particular industry.
Interaction of macro-environments and the organisation
Demographics deals with the composition of people making up the marketing for a particular firm (Al Fahad at al., 2015). Demographic forces such as educational levels, race, religion, country, and age often influence market segments differently (Radulescu, 2012). In auditing, these demographic sections are analysed for threats or opportunities that they pose for the organisation (Overton, 2003). It is easy to use demographics to spot trends in any industry. Therefore, people form an essential part of macro-environments.
Economic audit deals with the factors affecting the business financially (Chirla and Funar, 2010). Often companies can identify trends relating to people’s spending power, inflation, interest rates, exchange rates, unemployment levels. Changes in this part of the macro-environment have significant potential in influencing the direction of the company (Al Fahad at al., 2015). For instance, higher interest rates may directly reduce investments. On the other hand, a powerful currency may be a challenge to exports as it raises the price of the foreign currency. Similarly, inflation may translate to an increase in demand to pay, while the firm’s products demand is directly proportional to the national income growth (Overton, 2003). Consequently, economic environment considerably influences firm’s strategic decisions.
The environmental aspect of macro-environments provides useful information about the physical surroundings and resources available to the organisation (Al Fahad at al., 2015). This information includes the weather, availability of natural resources, the company’s contribution to pollution, and climate change. Changes in temperature have the potential to impact a variety of industries ranging from farming to insurance (Overton, 2003). Notable environmental changes directly caused by global warming are increasingly becoming convergent points for businesses to reconsider their strategies. Many sectors of the economy are gradually shifting to environmentally friendly practice in their practices. Accordingly, the physical environment is shaping the course of many businesses in the era.
The technological aspect of microenvironments mainly deals with the applicability of technology in the business strategy. In the 21st century technology is at the forefront of shaping the civilisation. As technology changes, it is up to firms to keep up and capitalise on it. For example, businesses that can efficiently use online platforms to sell their products have a competitive advantage over their rivals (Al Fahad at al., 2015). Therefore, technology audit analyses how organisations can assimilate new technology.
Political macro-environments essential track the stance governments and politicians take on various issues affecting business (Chirla and Funar, 2010). These range from the goods and services the authorities support within their borders, the industries that governments invest in or subsidise. The political atmosphere in a country can influence key area in business. For instance, the quality of labour is directly linked to government support in a particular industry (Overton, 2003). Also, the general economic atmosphere in any country is heavily dependent on the government’s decisions. Accordingly, the government sets the economic mood in any state.
The final aspect of macro-environments is social/ cultural trends. Audit at this level tracks the changes in the society’s beliefs, norms, behaviors, and values (Al Fahad at al., 2015). Social trends can influence the demand for a firm’s product in a given region. They can also affect the supply of labour. In the UK, for instance, the willingness to work is decreasing as a substantial portion of the workforce is aging (Overton, 2003). Also, this has translated to more spending on pensions by firms. Therefore, social/cultural trends are considered during the macro-environmental audits.
Microenvironments
Microenvironments typically deal with the small forces within the company that affects its operations. Marketing audit involving this area is often referred to as organizational audit (Al Fahad at al., 2015). Auditors regularly dig up information regarding a firm’s customers, competitor’s distribution, facilitators of marketing firms and the public (Groucutt, Leadley, and Forsyth, 2004). The factors involved here controllable.
Interaction of microenvironment elements
Customers make up the backbone of the microenvironments. Their needs often vary from one segment to the next. Marketing audit can readily identify the varying needs of the customers hence enabling the organization to corner their target market successfully (Al Fahad at al., 2015). Audits in this area also show the relationship between the customers, competitors, the quality of products and the salesforce. Thus, customers provide valuable information about the current firm state.
Competitors, on the other hand, help the company identify the trends in the marketplace. Through information about their strengths, weaknesses, market share firms can make relevant decisions to strengthen their position (Al Fahad at al., 2015). Therefore, a challenge from the competition can help companies in their operations.
Dealers and distribution, facilitators and marketers, as well as the public each, play a significant part in the audit process (Al Fahad at al., 2015). A look at the distribution reveals possible clogs in the system. A secure distribution channel is often correlated with a company’s success. Concerning marketer and facilitators, firms can measure their money’s worth in advertising endeavours. This insight is possible through the information collected on transportation, warehousing and financial resources (Al Fahad at al., 2015). Lastly, the public provides information on the company’s opportunities and problems. Auditing here can be used to analyse the effectiveness of the steps taken by the organisation in dealing with the public. Thus, individually, each of the discussed microenvironment factor influences the business operations, and audits in each provide critical information.
How interact organisations the three influences
Internal Audit
Internal audit is meant to streamline the company’s operations internally. Hence, it deals with an organisation’s core areas like the business mission, marketing objectives, strategy, formal structure, and functional efficiency. Accordingly, internal audits provide information on the inner workings of the company.
Internal factors
The business mission and marketing goals have to be inline. The mission statement is usually clearly state and plays the role of guiding a company through the course of time. Marketing objectives can be used to pinpoint an organisation’s position in the marketplace (Chirla and Funar, 2010). Information gathered here thus provide the company’s relative competitive position guided its mission statement.
Strategy and formal structure distinctly interact with one another in securing the company’s success. To ensure that marketing objectives are reached firms draw out a strategic plan. Audit on the plan answers questions like, is the company targeting the right market segment (Al Fahad at al., 2015). Data collected by an auditor on the formal structure reveals the role each authority in the organisation plays both in the strategizing and implementation phases of the marketing plans. Thus internally auditing the strategy and office structure informs the company of the contributions of the project and its members.
Functional efficiency is primarily concerned with reducing friction between various departments in an organisation (Al Fahad at al., 2015). Audits in this phase bring out possible issues in coordination between multiple teams and sections within the company. For example, information obtained can show the communication levels between the marketing and the marketing teams.
Conclusion
Indeed, the marketing scene has tremendously changed over the last few decades. Professionals are gradually challenging the practicality of old practices like marketing auditing in the new dynamic market. Over the years, it has been able to address relatively constant aspects of business although it has never enjoyed a standardised method of implementation. The practice has various tools that provide marketing managers with information to make the most suitable decisions. Although the process of adoption may vary, the method relishes six constant elements seen in all models used. Organisations are often under the threat of removal from the market if they cannot predict changes in the markets. Marketing audit can help firms cope with this pressure. Macro-environments usually consist of the business’ external environment. Marketing audit on these erratic factors can greatly influence a firm’s success. An understanding of a firm’s internal environments can also aid in advantageously placing the firm in the marketplace. However, companies have a substantial measure of control when it comes to this aspect. I disagree with the assertion that a full-scale marketing audit is no longer relevant to a marketing manager in today’s increasingly dynamic marketplace based on all the discussed uses of marketing audits.
References
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