The Marketing Book 5th Edition

92 The Marketing Book

company. But such measures are unlikely to be
effective if there are more fundamental prob-
lems which have not been identified. Of course,
if the company survived for long enough, it
might eventually solve its problems through a
process of elimination. Essentially, though, the
argument is that the problems have first to be
properly defined. The audit is a means of
helping to define them.

Two kinds of variable

Any company carrying out an audit will be
faced with two kinds of variable. There is the

kind over which the company has no direct

control, for example economic and market

factors. Second, there are those over which the

company has complete control, the operational

variables, which are usually the firm’s internal

resources. This division suggests that the best

way to structure an audit is in two parts,

external and internal. Table 5.1 shows areas

which should be investigated under both head-

ings. Each should be examined with a view to

building up an information base relevant to the

company’s performance.

Many people mistakenly believe that the

marketing audit should be some kind of final

Table 5.1 Conducting an audit

External audit Internal audit

Business and economic environment Own company

Economic political, fiscal, legal, social, cultural

Technological

Intra-company

The market

Total market, size, growth and trends (value

volume)

Market

characteristics, developments and trends;

products, prices, physical distribution,

channels, customers, consumers,

communication, industry practices

Competition

Major competitors

Size

Market share coverage

Market standing and reputation

Production capabilities

Distribution policies

Marketing methods

Extent of diversification

Personnel issues

International links

Profitability

Sales (total, by geographical location, by industrial

type, by customer, by product)

Market shares

Profit margins, costs

Marketing

information

research

Marketing mix

variables: product management, price,

distribution, promotion, operations and

resources

Key strengths and weaknesses