All posts by mark3988

GROW YOUR BUSINESS WITH A MARKETING AUDIT

Why does my business need a Marketing Audit?

That’s easy, no matter how large or how small your business is you should conduct regular market audits. The marketing audit provides you with an overview of what your current situation is now. It’s a comprehensive, systematic, independent and periodic examination of a company’s marketing environment, objectives, strategies and activities to determine problem areas and new opportunities for improvement.

A time to analyse past and present marketing activities and business performance, it provides the basis for evaluating future marketing goals, strategy and plans. The diagnosis is then followed by a “corrective” action plan; a plan of action – involving both short and long term goals for improving the company’s overall effectiveness.

The business environment is forever changing therefore the marketing audit should be used as a reference tool, with constant updates.

The audit can be split into two categories.

Internal Audit

This is your opportunity to look at your business and ask yourself – do I know as much about my business as I should? Look at your business in terms of:

• Sales (total, split by geography, industry, customer, product).
• Market shares compared to your competitors.
• Profit margins – are you charging enough or too much?
• Costs – can supplies be purchased elsewhere?
• Market research and information – do you know enough about your customers?
• Effectiveness of the marketing mix – analyse previous campaigns in terms of enquiries and sales – what has or has not worked.
• Previous Marketing Communication tools –
• The key outcomes from this audit can then be summarised in the ‘Current market position and Market Overview sections of your marketing plan.’

Next you look at the External factors using various marketing tools.

THE MARKETING TOOL – PESTEL ANALYSIS

This is a tried and tested tool for presenting information about the macro environment you’re reviewing. It’s a way of capturing details of the factors you have to consider when in business.

At the top of screen or whiteboard start with a clear definition of the market. Then either draw another matrix or write your headings on the left of the page.

• Political change (political stability, future legislation, trade regulations, employment laws, consumer protection, competition regulation).
• Economic change (growth, interest rates, taxation, exchange rates, inflation, unemployment, customer drivers).
• Socio-cultural – demographic change (population, age distribution, social mobility, lifestyle changes, living conditions, education, health, ethical issues, languages).
• Technological change (research and development, government research spending , internet, mobile communications, rate of technology transfer, manufacturing maturity).
• Environmental change.
• Legal change.
• Consumer changes.
• Changes in the competition.
• Changes in the market as a whole.

PORTER’S 5 FORCES ANALYSIS

This marketing tool is used to asses a new market for attractiveness and profitability or wanting to look at the market situation you currently face.

It is also strategically important because you can use the results to maximize your advantages and identify potential risks.

THE FIVE FORCES ANALYSIS TOOL

There are five forces, which influence what happens in every industry and every market –

• Existing competitors.
• The threat of potential new competitors.
• Substitutes for products offered.
• The power of suppliers.
• The power of customers.

Force One – Existing Competitors

Generally competitive rivalry will be high if there is little product differentiation between competitors.

• If competitors are similar sizes.
• If there are low market growth rates.
• If it is expensive to exit the market.
• If the strategies of the competitors appear to be the same.

STRATEGIC RESPONSE FOR YOUR CONSIDERATION:

• Don’t compete on price.
• Look to other markets for growth.
• Avoid overcapacity.
• Differentiate your products.
• Buy a competitor.

FORCE TWO – NEW COMPETITORS

These will assess the market to see how easy it is to enter.

Tell-tale signs are:

• Low customer loyalty.
• Low investment costs and achievable manufacturing volumes.
• Easy access to suppliers.
• Few legislative barriers.

Strategic response for your consideration:

• Strengthen your brand.
• Work closely with distribution and/or suppliers.
• Take cost out of your operation so that you can be more competitive.
• Protect your intellectual property with patents etc.

FORCE THREE – SUBSTITUTES

Alternative products to those currently offered are a threat if the substitute is:

• Easy to switch to.
• If the price of the substitute falls.
• If customers are willing to change.

STRATEGIC RESPONSE FOR YOUR CONSIDERATION:

Emphasize (real or perceived differences).

• Make it more costly to switch.
• Find out what your customers prefer.
• Enter the substitute market yourself.

FORCE FOUR – SUPPLIERS

The suppliers of raw materials have varying degrees of power in a marketplace, depending on:

• The cost associated with switching suppliers.
• The number of suppliers available.
• If there is no substitute for the raw material.

STRATEGIC RESPONSES FOR YOUR CONSIDERATION:

• Invest in supply chain management and training.
• Develop partnerships with suppliers.
• Explore ways of increasing their dependency on you.
• Take over a supplier.

Force Five – Customer or Buyer Power:

This can be seen best in markets where:

• The product is not strategically important to the customer.
• They buy in bulk.
• Switching products is very cheap.
• They are very price sensitive.
• Substitutes are readily available.

Strategic responses for your consideration:

• Increase loyalty.
• Introduce incentives.
• Deal direct rather than through distributors.
• Avoid purchase decisions based on price!

 THE SWOT ANALYSIS

This is a simple matrix on which you capture the data that applies to both your business and the competition.

• Strengths.
• Weaknesses.
• Opportunities.
• Threats.

Strengths and weaknesses refer to your products or service (internal issues), opportunities and threats to the external marketplace.

Your SWOT is best completed with the help of as many people from different functions: sales, marketing, accounts, customer care/service, product development, management and customers).

Remember this is quite a subjective tool so be specific in your observation and keep comments short and simple.

TOP TIP:

It’s a good idea to use this in combination with a completed PEST and 5 Forces Analysis as these provide the context for your SWOT.

STRENGTHS:

• Brand.
• Product Offers.
• Price.

WEAKNESSES

• Retail outlets.
• Limited sale activity.

OPPORTUNITIES

• Overseas.
• Markets.
• Internet.

THREATS

• Price war.
• Acquisition.

COMPETITIVE ENVIRONMENT

• How competitive is your market? Evaluate the following:
• The threat of new entrants to your industry.
• The threat of substitute products.
• The bargaining power of suppliers.
• The rivalry amongst current competitors.
• Who are your competitors?
• Who are your major competitors, how big are they, what is their market share?
• What reputation do they have?
• How do they distribute their products, what are their production capabilities?
• What is their marketing like – do they diversify?
• What are their key strengths and weaknesses?

The Market Environment.

• Total market size, growth and trends
• Market characteristics, growth and trends.
• Products, prices.
• Physical distribution channels.
• Industry practices.

The next step is to gather all of the information up, analyse it, discuss it with team, write a plan and share it with the team.

STREETS MARKETING AGENCY CAN HELP YOU CONDUCT A MARKET AUDIT FOR YOUR BUSINESS. CONTACT STREETS MARKETING CALL 0044 (0)1733 243235 OR EMAIL maddie@streetsmarketing.co.uk.

OR COMPLETE THE CONTACT FORM AND WE WILL CONTACT YOU DIRECTLY.