MARKETING CONTROL AND MARKETING AUDIT
MARKETING CONTROL
DEFINITION
Marketing control is gathering information on marketing performance and comparing the achieved performances against planned or budgeted performances using predetermined standards. The aim of control system to evaluate the results of marketing plan so that corrective actions can be taken if performance does not match the objectives.
SIGNIFICANCE
It puts the unit on the progress path It helps in locating responsibility for deeds Keep pace with environmental changes It absorbs organisational complexity It brings about realistic reformulation plans
TYPES OF MARKETING CONTROL
TYPES OF CONTROL PRIME RESPONSIBILITY PURPOSE OF CONTROL APPROACHES
1. ANNUAL PLAN CONTROL
Top management Middle management
To examine whether the planned results re being achieved
Sales analysis Market share analysis Sales to expense analysis Financial analysis Market based scoreboard analysis
PROFITABILITY BY: Product Territory Customer Segment Trade channel Order size
2. PROFITABILITY CONTROL
Marketing controller
To examine the company is making and losing money
TYPES OF CONTROL
PRIME RESPONSIBILITY
PURPOSE OF CONTROL
APPROACHES
3. Efficiency control
Line and staff management Marketing controller
To evaluate and improve the spending efficiency and impact of marketing expenditures
EFFICIENCY Sales force Advertising Sales promotion Distribution
4. Strategic control
Top management Marketing auditor
To examine whether the company is pursuing its best opportunities with respect to markets, products and channels.
Marketing effectiveness rating instrument Marketing audit Marketing excellence review Company ethical and social responsibility review
ANNUAL PLAN
Annual plan control ensures the company achieves the sales, profits and other goals established in its annual plan. There are four steps in this process.
WHAT DO WE WANT TO ACHIEVE
WHAT IS HAPPENING
WHY IS IT HAPPENING
WHAT SHOULD WE DO ABOUT IT
SALES ANALYSIS
Sales analysis measures and evaluates the actual sales in relationship to goals. Two specific tools make it work Sales variance analysis Micro sales analysis
MARKET SHARE ANALYSIS
Company sales dont reveal how well the company is performing relative to competitors. For this purpose, management needs to track its market share in one of the three ways Overall market share Served market share Relative market share
Overall market share= consumer penetration*customer loyalty*customer selectivity*price selectivity
MARKETING EXPENSE TO SALE ANALYSIS
Annual plan control requires making sure that the company is not overspending to achieve sales goals. The key ratio to watch is marketing expenses to sales. In one company, the ratio was 30% and consisted of the component expenses to sales ratios: sales force to sales15%, sales promotion to sales6%, marketing research to sales1%, sales administration to sales3%
FINANCIAL ANALYSIS
Management uses financial analysis to identify factors that affect the companys rate of return on net worth. To improve its return on net worth, the company must increase its ratio of net profits to assets, or increase the ratio of assets to net worth.
PROFITABILITY CONTROL
Companies can benefit from deeper financial analysis and should measure the profitability of their products, territories, customer groups, segments, trade channels and order size, This information can help to determine whether to expand, reduce or eliminate any products or marketing activities.
PROCESS OF PROFITABILITY CONTROL ANALYSIS
Identifying functional expenses Assigning functional expenses to marketing entities Preparing profit and loss for each marketing entities
EFFICIENCY CONTROL
It involves micro level analysis of various elements of marketing mix including sales force, advertising, sales promotion and distribution. For example to understand the sales force efficiency of a company.
STRATEGIC CONTROL
Each company should periodically reassess its strategic approach to the market place with a good marketing audit. Companies can also perform marketing excellence reviews and ethical/ social responsibility reviews.
MARKETING AUDIT
Introduction : Any well organized company would
want to evaluate or measure the effectiveness of marketing operations. Evaluation of marketing performance is measured with respect to the objectives set by the organisation. Marketing audit is systematic & critical, impartial revision & appraisal of total marketing action. This would include salesmens performance, marketing cost involved,effectiveness of advertisement & so on.
Meaning: A marketing audit is a comprehensive, systematic, independent, & periodic examination of a companys or business units marketing environment ,objectives, strategies & activities with a view to determining problem areas & opportunities & recommending a plan of action to improve the companys marketing performance.
Characteristics of marketing audit: There are four basic characteristics of marketing audit They are, 1.Comprehensive 2.Systematic 3.Independent 4.Periodic
Components of Marketing Audit:There are six major components of marketing audit.They are, 1.The Marketing Environment Audit 2.The Marketing Strategy Audit 3.The Marketing Organisation Audit 4.The Marketing Information System Audit 5.The Marketing Productivity Audit 6.The Marketing Function Audit
Marketing Audit Process: The steps in the marketing audit are summarized belowDecision by top management to audit Selection of auditors Meeting between top management & auditors Gathering & analysis of information Preparation of report Presentation of findings & recommendation to top mgt Discussion & evaluation by top mgt Daily write-ups
Design of data gathering methods & tools Initial findings discussed with top mgt Additional meetings with auditors, if needed
Periodic reports to top mgt
Actions taken
CONCLUSION
Marketing audits are useful in good times absolutely necessary in bad times. Many troubled organizations could have avoided their crises with a timely audit of their strengths & weakness.
