Macroenvironment
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MGT4590MarketingAuditWorksheetrevJanuary2017.pdf
Marketing Audit Overview and Worksheet
Edwin R. Stafford, Ph.D. Utah State University
Revision: January 2017
A marketing audit is a comprehensive survey and analysis of an organization’s marketing programs in the face of a dynamic social and competitive environment. It requires viewing an industry or market as an ever changing system of economic, social, environmental, political, and technological forces driving competition. The marketing auditor’s tasks are (1) to identify evolving opportunities and threats in the external social and competitive environment that will impact the organization’s marketing programs; (2) to evaluate the organization’s internal strengths and weaknesses as an effective marketer in this evolving environment; and (3) to propose strategic policy recommendations and a plan of action to exploit or address these issues. Given the dynamic nature of the marketplace (e.g., shifting consumer demands; changing technologies; evolving political and economic trends), marketing audits should be conducted annually. The principal components (or chapters) of a marketing audit include the following: External to the Firm: Opportunities and threats
1. Macroenvironment (evaluation of opportunities and threats in social, political, and economic environment)
2. Competitive Environment (evaluation of opportunities and threats in the industry’s competitive environment)
Internal to the Firm: Strengths and weaknesses
3. Marketing Strategy and Programs (evaluation of strengths and weaknesses of the organization’s marketing programs)
Strategic and Marketing Mix Recommendations:
4. Overall Plan of Action (proposal of new/improved vision of market position and articulation of steps and objectives to achieve new vision)
5. Product Strategy and Programs (diagnosis [evaluation of current situation] and prognosis [recommendations for improvement given new ‘overall plan of action’] proposed in chapter 4)
6. Promotion Strategy and Programs (diagnosis and prognosis) 7. Pricing Strategy and Programs (diagnosis and prognosis) 8. Distribution Strategy and Programs (diagnosis and prognosis)
Your final report will include the following at the beginning of the paper:
Executive summary
Table of contents
Introduction (brief history and description of the organization and its product/service offering)
Critical thinking process:
Framework Analysis SWOT Objectives (what) Strategies (how)
Recommendations for effective business writing for a marketing audit or plan:
Consider your audience – busy top executives, marketing decision- makers, and financers; use concise and precise formal business language in short, easy-to-digest paragraphs
Make paper reader-friendly – use introductory ‘mapping paragraphs’ to overview sections, bullets for your most important points, bolding of key concepts, and sub-headings (that parallel worksheet questions) to facilitate comprehension of important content
Mimic the writing styles of IBIS World and Standard & Poor’s Industry Reports
Reference your information sources – use any professional citation format
Macroenvironment Chapter #1
Note to auditor: The purpose of this chapter is to define the organization’s industry, survey trends in the six “environments” (or arenas that are external to the organization and industry), and determine whether such trends pose opportunities or threats (or both – can addressing threats lead to opportunities for competitive advantage?). While not all trends may impact an organization’s current marketing programs, it is the marketing auditor’s responsibility to acknowledge the existence of such trends and monitor their potential impact over time. Marketers also need to consider how other industry players may be responding to such trends.
A. Define your organization’s industry (or relevant industries) B. Demographic trends in the industry
1. Describe the major demographic trends of consumer/potential consumers (e.g., Millennials, aging baby boomers; changing ethnicity; growth of single parent households, etc.), and how they are posing opportunities and threats for the industry and organization?
2. What actions are the organization/other industry players taking in response to these trends? C. Economic trends in the industry
1. Describe the most important existing and emerging economic trends (e.g., slow recovery from Great Recession, employment, interest rates, etc.), and how are they impacting the industry and organization? Do they pose threats or opportunities?
2. What actions are the organization/other industry players taking in response to these trends? D. Environmental/Natural Resource issues facing the industry
1. Describe the most important natural resource and environmental issues facing the organization/industry (e.g., drought’s impact on food prices; pollution; climate change). What are the opportunities and threats?
2. What actions are the organization/other industry players taking in response? E. Science/Technology trends in the industry
1. Describe major innovations or changes in technology that may be impacting the organization’s/industry’s products, production process, or inventory/supply chain. Are any new technologies becoming substitutes to make the company’s/industry’s products obsolete (e.g., 3D printers’ ability to create products quickly without extensive labs or factories)? What are the opportunities or threats?
2. What actions are the organization/other industry players taking in response? F. Political/Regulatory issues facing the industry
1. Describe existing or proposed laws and regulations that may affect the organization or industry. What are the opportunities and threats?
2. What actions are the organization/other industry players taking in response (e.g., lobbying against regulations; striving to exceed regulations to create a competitive advantage)?
G. Cultural/Social trends in the industry
1. Describe existing or emerging cultural/social trends and changes in lifestyles, values, and beliefs that are impacting the industry (e.g., health trends impact on fast food or athletic wear; social media’s impact on retailing). What are the opportunities and threats?
2. What actions are the organization/other industry players taking in response? H. Conclusion
1. Summarize the MOST important opportunities and threats (from above) facing the organization and industry.
2. Identify key objectives that the organization should consider in light of these opportunities and threats.
Note to auditor: You may need to revise your initial draft of this chapter later in the semester as you develop your ideas and marketing proposals. For example, macroenvironmental trends that didn’t appear relevant may suddenly be important the further you explore your organization’s marketing and industry trends. You’ll then need to revise this chapter in light of your better insights and bolster your later recommendations.
Competitive Environment Chapter #2
Note to auditor: The purpose of this chapter is to survey trends in the industry/market and determine whether such trends pose opportunities or threats (or both) for the organization and industry. While not all competitive trends may impact an organization’s current marketing programs, marketing auditors must acknowledge their existence to monitor their potential impact. The key frameworks relevant to this chapter include the product life cycle and Porter’s Five Forces Driving Industry Competition Framework. A. Market Life Cycle
1. Describe the industry’s product life cycle stage (and growth rate). 2. Are the marketing programs of the organization and other industry players appropriate? If not
appropriate, should companies change their strategies? Explain. B. Customers/Buyers – Bargaining Power
1. Describe the level of bargaining power customers/buyers have on the industry (high, medium or low). Explain why (e.g., what factors give buyers high or low bargaining power?).
2. Profile the key target markets (industrial buyers, end users) for the organization and other industry players (if they differ). Does each target market have differing levels of bargaining power? Why?
C. Competitors – Threat Level
1. Describe the threat level of competitive rivalry in the industry. Explain why (e.g., what factors indicate high or low rivalry).
2. Who are the major competitors in the industry? Profile the main competitors (or types of competitors [e.g., mom & pop stores; box stores; upscale specialty stores]) by articulating their central market positions and strategies. What are their strengths and weaknesses?
3. Which competitors are most threatening/vulnerable? Why? D. Suppliers – Bargaining Power
1. Describe the bargaining power of suppliers in the industry (high, medium, or low). Explain why (e.g., what factors give suppliers high or low bargaining power?).
2. What are the key supplies/inputs for the organization/industry? What is the outlook for the costs of these raw materials, components, labor, transportation, and other supplies?
E. Potential Entrants – Threat Level
1. Describe the threat level of new entrants for your industry (high, medium, or low). What market factors indicate this level of threat?
2. Identify the primary entry barriers for your industry. How easily could new entrants overcome these barriers? What are the incentives for entering the market (e.g., market growth)?
3. Speculate what companies may want to enter your organization’s market/industry. What would likely happen if those companies did enter (e.g., impacts on price, consumer reactions, etc.)?
F. Competitive Substitutes – Threat Level
1. Describe the threat level of competitive substitutes on your organization/industry (high, medium, low). What characteristics of substitutes make them threatening (e.g., lower price, better, more convenient)?
2. What are the competitive substitutes for the industry’s products (e.g., plug-in electric/natural gas vehicles for traditional gasoline cars)? How do buyers perceive the competitive substitutes vis-à-vis the industry’s product offerings? How likely are buyers to switch? Why?
G. External Stakeholders and Publics (not included in Porter’s original framework) – Threat Level
1. Describe the threat level of external stakeholders and publics (not buyers or suppliers) on your organization/industry (high, medium, low). What types of influence do these entities have (e.g., health advocates promoting healthy options in fast food industry)?
2. What stakeholders and publics (media, government, civil society, special interest, charity) represent particular opportunities or threats? Why?
3. What strategies are the organization/other industry players taking to address stakeholder concerns/interests/agendas? Are partnerships worth considering (e.g., sponsoring a social cause with critical social interest group)?
H. Conclusion
1. Conduct a Porter’s Five Forces analysis of your organization and industry, including stakeholders and publics. Summarize the analysis in an exhibit.
2. What are the most important opportunities and threats facing the organization? Explain.
3. Articulate the key objectives that the organization should undertake in light of the opportunities and threats facing the organization.
Marketing Strategies and Programs Chapter #3
Note to auditor: The first two chapters of the marketing audit surveyed the opportunities and threats external to the organization. This chapter focuses on the internal strengths and weaknesses of the organization’s marketing strategies and programs. The purposes of this chapter are (1) to evaluate critically the organization’s market position and strategies and (2) to propose recommendations to improve the organization’s overall competitive position. The key frameworks relevant to this chapter include Porter’s generic competitive strategies, product portfolio analysis, and Barney’s criteria for sustainable competitive advantage. Note that the first two chapters required significant market research; the next chapters will rely primarily on your informed opinion, analyses, and recommendations. A. Strategic Market Position
1. Briefly overview the organization’s mission and marketing strategy. What is the generic competitive strategy of the organization (cost leadership, differentiation, niche, hybrid)? Is the organization’s market position unique or better than its competitors’ position? Explain.
2. Does the organization’s mission statement or stated objectives appear effective in terms of the organization’s resources, image, targeted market segments, and competitors?
3. Evaluate the effectiveness of the organization’s overall strategic market position. What are the strengths and weaknesses of the strategy? What are some key objectives necessary to improve the organization’s marketing strategy vis-à-vis competitors?
B. Product Portfolio Analysis
1. Conduct a product portfolio analysis of the organization’s key products, product lines, technologies, or departments. Include an exhibit.
2. What changes and key objectives are needed to better position the organization’s product portfolio?
C. Competitive Advantage Assessment
1. Identify the key strategic policies, programs, resources, and assets that create/support the organization’s competitive position (e.g., Wal-Mart’s superior logistics system to reduce distribution costs and enable its cost leadership position).
2. Evaluate the sustainability of the organization’s competitive advantage on Barney’s criteria.
3. What key marketing objectives and strategic initiatives are necessary to improve the organization’s overall market position?
D. Conclusion
1. Summarize the organization’s central strengths and weaknesses. 2. Outline principal objectives needed to leverage strengths or bolster weaknesses.
Plan of Action Chapter #4
Note to auditor: The previous three chapters represent a detailed “SWOT” analysis (strengths, weaknesses, opportunities, and threats) of the organization’s market, competitive position, and marketing programs. Drawing from the detailed SWOT analysis, this brief chapter articulates the marketing auditors’ proposed new/improved vision for the organization’s market position and a specific plan of action for achieving this new vision. This chapter represents the heart of the marketing audit, outlining objectives (what needs to be accomplished) and key strategies and initiatives (how to achieve proposed objectives). This section draws from Collis and Rukstad’s (2008) Harvard Business Review article. Articulate your strategy clearly and succinctly; this chapter should be brief and specific! A. Summarize briefly the main findings of chapters #1, #2 & #3 that will influence your new
proposed vision and recommendations below. That is, explain what issues noted previously will drive your recommendations for this chapter.
B. Proposed New/Improved Market Position
1. Articulate your proposed mission statement for the organization. 2. Summarize your proposed new market position; explain how this improves upon the
organization’s current market position. C. Strategy
1. What are the major objectives (ends) to realize your proposed new/improved vision? Explain how your new objectives address key opportunities, threats, strengths, and weaknesses identified in Chapters #1, #2, and #3.
2. What is the scope (domain – target customer segments or offering, geographic location, and vertical integration) of your strategy? Explain how your scope relates to the key opportunities, threats, strengths, and weaknesses identified in Chapters #1, #2, and #3.
3. What is the competitive advantage (means) that will be achieved? Explain the customer value proposition and the unique/complex combination of activities that will allow the organization to deliver customer value.
D. Plan of Action
1. Articulate your plan of action – steps/initiatives necessary to achieve proposed new strategy.
2. How will your new/improved strategy objectives and marketing initiative recommendations noted in part A impact the organization’s marketing mix (4 Ps) and target market segments?
3. Summarize the new set of marketing mix variables and detailed targeted market segments based on your recommendations. Explain how the new marketing mix will appeal to your target market segments and supports the proposed new marketing vision of the organization and addresses key opportunities, threats, strengths, and weaknesses identified in Chapters #1, #2, and #3.
Product Strategy and Programs Chapter
Note to auditor: Chapter #4 articulated a new strategic vision and a plan of action to improve the organization’s overall market position. The next four chapters provide a more focused evaluation and set of recommendations for the marketing mix variables. The purposes of the product programs chapter are (1) to evaluate critically the organization’s current product programs and (2) to propose recommendations for new initiatives to improve the organization’s overall product strategy based on chapter #4’s overview of your recommended strategic vision. A key task for this chapter involves evaluating the organization’s product/service position and differentiation based on some relevant quality framework (e.g., Garvin’s quality dimensions, SERVQUAL, or some other instrument commonly used in the industry [J.D. Power and Associates for automobiles]). Part of your task is to select the appropriate product quality framework for analysis. A. Diagnostic Product Profile (Current situation)
1. What is the primary product/service (or set of products) offered by the organization? What buyer needs do the products/services satisfy?
2. Critique the organization’s brand (name, symbol, etc.); is it well-recognized or respected by consumers? What is the brand’s image in the market?
3. Identify a relevant quality framework (e.g., Garvin’s quality dimensions, SERVQUAL, or other established industry instrument) and evaluate the organization’s products/services based on the framework. What are the product’s/service’s strengths and weaknesses? How do the products/services compare with key competitor’s offerings based on the framework?
4. Review the product’s packaging in terms of convenience, safety, promotions, recognition, and recycling (if applicable). How may the packaging be improved?
5. Summarize the organization’s overall product position. B. Prognostic Product Analysis (Your recommendations for improvement)
1. In light of your product diagnostic analysis and proposals in Chapter #4, what is your new vision for the organization’s product/service offering?
2. What new product objectives should your organization pursue? Describe how the product, its packaging, or branding would be affected by your recommendations.
3. What key product initiatives are needed to achieve your vision and objectives? C. Product Summary
1. Summarize your key product recommendations. 2. Explain how your product recommendations support your plan of action noted in
Chapter #4. How do the product programs relate/support other marketing mix variables and meet the needs of evolving/new target markets?
Pricing Strategy and Programs Chapter
Note to auditor: While evaluating the prices of all the organization’s product/service offerings may be beyond the scope of a marketing audit, this chapter focuses on assessing the organization’s general pricing policies and position in the market (e.g., overall price leadership; premium pricing; EDLP; high-low pricing). The purposes of this chapter are (1) to evaluate critically the organization’s current overall pricing strategy, objectives, and programs and (2) to propose recommendations for new initiatives to improve the organization’s overall pricing strategy. A key task is to evaluate the forces impacting the price elasticity of the organization’s product/service offering and determine if those forces can be manipulated to allow the organization greater pricing latitude (e.g., to undercut competitors; price more competitively; raise prices over competitors to demonstrate quality). A. Diagnostic Pricing Profile (Current situation)
1. What are the pricing objectives and strategies of the organization’s product/service offering? What organization/product image is being conveyed by the pricing strategy (e.g., high price conveys quality; low price conveys bargain image)? Do buyers perceive the prices to be in line with the perceived value?
2. To what extent are prices set on cost, demand, and/or competitive criteria? Does the organization have a cost advantage compared to competitors?
3. Are the organization’s product/service offerings price elastic or inelastic? What factors are driving price elasticity? Can any of these factors be changed to the organization’s advantage?
4. Summarize the organization’s overall pricing position. B. Prognostic Price Analysis (Your recommendations for improvement)
1. In light of the pricing diagnostic analysis and proposals in Chapter #4, what is your new vision for your organization’s pricing policy?
2. What new pricing objectives and policies should your organization pursue? What pricing tactics do you propose to achieve these objectives?
3. How may other marketing mix variables be modified to support your new pricing programs? Do these changes strive to change factors that currently impact price elasticity?
C. Pricing Summary
1. Summarize your key pricing recommendations. 2. Explain how your pricing recommendations support your plan of action noted in
Chapter #4. How do the pricing programs relate/support other marketing mix variables and meet the needs of evolving/new target markets?
Promotion and Social Media Strategy and Programs Chapter
Note to auditor: This chapter focuses on assessing the organization’s promotional mix (advertising, sales promotions, personal selling, and publicity/public relations) and social media (blogs, Facebook, Twitter, YouTube), their effectiveness in reaching relevant audiences, and their conveying of appropriate marketing messages to buyers and other stakeholders. The purposes of this chapter are (1) to evaluate critically the organization’s current overall promotional/social media strategy, objectives, and promotion mix/social media programs and (2) to propose recommendations for new initiatives to improve the organization’s overall promotions. If you’ve proposed a new marketing campaign and slogan in chapter #4, promotions and social media will be central for communicating that campaign to customers and other stakeholders. A. Diagnostic Promotion/Social Media Profile (Current situation)
1. What are the promotional objectives and strategies of the organization? What types of media are used? What types of slogans and appeals are used (e.g., celebrity endorsers, humor, sex appeal, etc.) Do they reinforce the organization’s overall market image?
2. What is the organization’s social media strategy? How is social media used – for monitoring “pulse” of customers/stakeholders, research, customer service, building relationships/dialoguing with customers and stakeholders?
3. Diagnostic Promotional mix Profile a. Critique the organization’s current promotional campaigns/commercials, Internet ads,
etc. b. What changes are needed for improvement?
4. Diagnostic Social Media Profile a. Critique the organization’s current social media initiatives. How do they compare with
competitors’ social media? b. What changes are needed to improve the organization’s social media?
B. Prognostic Promotion/Social Media Analysis (Your recommendations for improvement)
1. In light of the promotion diagnostic analysis and proposals in Chapter #4, what is your new vision for your organization’s marketing communication and social media policies?
2. What new promotional and social media initiatives should your organization pursue? 3. How should other marketing mix variables be modified to support your new promotional/social
media programs (e.g., should prices be lowered occasionally to help sales promotions; should company representatives participate in blogs/defend company)?
C. Promotion Summary
1. Summarize your key promotion/social media recommendations. 2. Explain how your promotion and social media recommendations support your plan of action
noted in Chapter #4. How do the recommended programs relate/support other marketing mix variables and meet the evolving/new target markets?
3. Illustrate your key recommendations for advertising, sales promotion, sales force, publicity, and social media with a brief portfolio of mock print ads, story boards for commercials, press releases, etc. Demonstrate how you would execute your promotions recommendations.
Distribution Strategy and Programs Chapter
Note to auditor: This chapter centers on assessing the channels of distribution of the organization’s product/service offering as they relate to the organization’s market position and generic competitive strategy (e.g., cost leadership, differentiation, niche, hybrid). The purposes of this chapter are (1) to evaluate critically the organization’s current overall distribution strategy, objectives, and policies and (2) to propose recommendations for new initiatives to improve the organization’s overall distribution strategy as they relate to the plan of action articulated in Chapter #4. The principal tasks are to evaluate the forces influencing the selection of distribution channels and determine if existing channels meet the needs of evolving customers or new target markets. A. Diagnostic Channel of Distribution Profile (Current situation)
1. What are the distribution objectives and strategies of the organization’s product/service offering (e.g., direct via online sales, intensive, selective, or exclusive distribution)? What role does distribution play in the product/service offering (e.g., convenience, prestige)?
2. Describe the channel of distribution used for the organization’s product/service offering. Who leads the channel? Do competitors use the same channels? Are key players in the channel potential threats to the organization (e.g., Does Walmart dominate your organization’s product distribution? Do department stores’ strategies conflict with company-owned retail outlets?)?
3. What role does the Internet play in the organization’s product/service offering? Is it used for direct sales or simply as a marketing communication tool? Is it used to circumvent powerful channel members (e.g., retailers)?
4. Summarize the organization’s overall distribution strategy. B. Prognostic Channel of Distribution Analysis (Your recommendations for improvement)
1. In light of the distribution diagnostic analysis and proposals in Chapter #4, what is your new vision for the organization’s distribution policy?
2. What new distribution objectives and policies should the organization pursue? How may other channel members react to your proposed changes?
3. How should other marketing mix variables be modified to support your new distribution programs?
C. Distribution Summary
1. Summarize your key distribution recommendations. 2. Explain how your distribution recommendations support your plan of action noted in
Chapter #4. How do the distribution programs relate/support other marketing mix variables and meet the needs of evolving/new target markets.
