Marketing Management
What’s Your
Marketing Effectiveness Rating?
Can you define Marketing?
► Marketing
► identifies
is the business function that
unfulfilled needs and wants.
Not to be confused with…
► Advertising
► Selling
It is the art of identifying and understanding
customer needs and creating solutions that
deliver satisfaction to the customer and profits
to the company.
What’s your Marketing
Effectiveness Rating?
► Customer
Philosophy
► Integrated Marketing Organization
► Adequate Marketing Information
► Strategic Orientation
► Operational Efficiency
Customer Philosophy
Do you recognize the importance of designing the company
to serve the needs and wants of chosen markets?
0
We primarily think in terms of selling current and new products to whoever
will buy them.
1
We think in terms of serving a wide range of markets and needs with equal
effectiveness.
2
We think in terms of serving the needs of well defined markets chosen for
their long term growth and profit potential
Customer Philosophy
Do you develop different offerings and marketing plans for
different segments of the market?
0
No
1
Somewhat
2
To a good extent
Customer Philosophy
Do you take a whole marketing system view (suppliers,
channels, competitors, customers, environment) in planning
your business?
0
No We concentrate on selling and servicing immediate customers
1
Somewhat We take a long view of our channels although the bulk of our
effort goes to selling and servicing immediate customers.
2
Yes We take a whole marketing systems view, recognizing the threats and
opportunities created by changes in any part of the system.
Integrated Marketing Organization
Is there high level marketing integration and control of the
major marketing functions.
0
No Sales and other marketing functions are not integrated at the top and
there is some unproductive conflict.
1
Somewhat There is formal integration and control of marketing functions
but less than satisfactory coordination and cooperation.
2
Yes The major marketing functions are effectively integrated.
Integrated Marketing Organization
Does marketing management work well with R & D,
Manufacturing, Purchasing, Distribution and Finance?
0
No Marketing is unreasonable in the demands and costs it places on other
departments.
1
Somewhat Relations are amicable although each area pretty much acts to
serve it’s own best interests.
2
Yes Everyone cooperates effectively and resolves issues in the best
interest of the company as a whole.
Integrated Marketing Organization
How well organized is the New Product process?
0
The system is ill defined and poorly handled.
1
A formal system exists but lacks sophistication.
2
The system is well structured and has supporting resources.
Adequate Marketing Information
When were the last formal marketing surveys of customers,
buying influences, channels and competitors conducted?
0
Several years ago
1
A couple of years ago
2
Recently
Adequate Marketing Information
How well do you know the sales potential and profitability
of different market segments, customers, territories,
products, channels and order sizes?
0
Not at all
1
Somewhat
2
Very well
Adequate Marketing Information
What effort is expended to measure the cost effectiveness
of marketing expenditures?
0
Little or none
1
Some effort
2
Substantial effort
Strategic Orientation
What is the extent of formal marketing planning?
0
Little or no formal marketing planning
1
We develop an annual marketing plan
2
We develop a detailed annual plan and a long range plan that is updated
annually.
Strategic Orientation
What is the quality of the current marketing strategy?
0
The current strategy is not clear
1
The current strategy is clear and represents a continuation of traditional
strategy
2
The current strategy is clear, innovative, data based and well reasoned.
Strategic Orientation
What is the extent of contingency thinking and planning?
0
We do little or no contingency thinking
1
We do some contingency thinking but little formal contingency planning
2
We formally identify the most important contingencies and develop plans
Operational Efficiency
How well is marketing thinking at the top
communicated and implemented down the line?
0
Poorly
1
Fairly well
2
Successfully
Operational Efficiency
Do we do an effective job with marketing resources?
0
No Marketing resources are inadequate for the job to be done.
1
Somewhat Marketing resources are adequate but not employed optimally
2
Yes Marketing resources are adequate and efficiently deployed
Operational Efficiency
Do you show good capacity to react quickly and
effectively to on-the-spot developments?
0
No Sales and Marketing information is not very current and reaction time is
slow
1
Somewhat We receive fairly up-to-date sales and marketing information;
reaction time varies.
2
Yes We have systems in place to maintain current information and our
reaction time is fast
Total Score
► 0-5
► 6-10
► 11-15
► 16-20
► 21-25
► 26-30
None
Poor
Fair
Good
Very Good
Superior
How do I improve my score?
► Plan
and Execute a Marketing Audit
► Review findings
► Make decisions
► Develop a Marketing Plan
► Implement the Marketing Plan
► Do it all again next year 
Components of a Marketing Audit
► Marketing
► Marketing
► Marketing
► Marketing
► Marketing
► Marketing
Environment
Strategy
Organization
Systems
Productivity
Function
I. Marketing Environment
► Analyzes
major forces and trends in the key
components of the company’s task
environment:





Markets
Customers
Competitors
Distributors/Dealers
Suppliers/Facilitators
Marketing Strategy
► Reviews
the company’s marketing
objectives and strategy to see how well
these are adapted to the current and
forecasted marketing environment
Marketing Organization
Evaluates the capability of your
organization for implementing the necessary
strategy to achieve your forecasted goals.
Marketing Systems
Assesses the quality of the company’s
systems for analysis, planning and control.
Marketing Productivity
Examines the profitability of different
marketing entities and the cost
effectiveness of different marketing
expenditures
Marketing Function
In depth evaluations of major marketing mix
components such as:
► Products
► Price
► Distribution
► Sales force
► Advertising
► Promotion
► Publicity
The Macroenvironment
► Demographics
► Economic
► Ecological
► Technological
► Political
► Cultural
Demographics
► What
major demographic developments and
trends pose opportunities or threats to your
company?
► What
actions has the company taken in
response to these developments and
trends?
Economic
► What
major developments in income, prices,
savings and credit will affect the company?
► What
actions has the company been taking
in response to these developments?
Ecological
► What
is the outlook for the cost and
availability of natural resources and energy
needed by the company?
► What
concerns have been expressed about
the company’s role in pollution and
conservation and what steps have been
taken?
Technological
► What
major changes are occurring in
product technology? In process
technology? What is the company’s position
in these technologies?
► What
major substitutes might replace
current products?
Political
► What
laws are being proposed that could
affect marketing strategy and tactics?
► What
federal, state, and local actions should
be watched? What is happening in the
areas of pollution control, product safety,
advertising, price control, etc that affects
marketing strategy?
Cultural
► What
is the public’s attitude toward
business and toward the products produced
or distributed by the company?
► What
changes in consumer and business
lifestyles and values have a bearing on the
company?
The Task Environment
► Markets
► Customers
► Competitors
► Distribution
and Dealers
► Suppliers
► Facilitators
► Publics
and Marketing Firms
Markets
► What
is happening to market size, growth,
geographical distribution and profits?
► What
are the major market segments?
Customers
► How
do customers and prospects rate the
company and its competitors on reputation,
product quality, service, salesforce and
price?
► How
do different customer segments make
their buying decisions?
Competitors
► Who
are the major competitors? What are
their objectives and strategies, their
strengths and weaknesses, their sizes and
market shares?
► What
trends will affect future competition
and substitutes for current products?
Distribution and Dealers
► What
are the main trade channels for
bringing products to customers?
► What
are the efficiency levels and growth
potentials of the different trade channels?
Suppliers
► What
is the outlook for the availability of
key resources used in production?
► What
trends are occurring among suppliers
in their pattern of selling?
Facilitators and Marketing Firms
► What
is the cost and availability outlook for
transportation services?
► What is the cost and availability outlook for
warehousing facilities?
► What is the cost and availability outlook for
financial resources?
► How effective are the company’s advertising
and market research firms?
Publics
► What
publics represent particular
opportunities or problems for the company?
► What
steps has the company taken to deal
effectively with each public?
II.
Marketing Strategy
► Business
Mission
► Marketing
► Strategy
Objectives and Goals
Business Mission
► Is
the business mission clearly stated in
market oriented terms?
► Is
it feasible?
Marketing Objectives & Goals
► Are
the corporate and marketing objectives
stated in the form of clear goals to guide
marketing planning and performance
measurement?
► Are
the marketing objectives appropriate,
given the company’s competitive position,
resources and opportunities?
Strategy
► Is
management able to articulate a clear
marketing strategy for achieving its
marketing objectives?
► Is
► Is
the strategy convincing?
the strategy appropriate to the stage of
the product life cycle, competitors’
strategies, and the state of the economy?
Strategy
► Is
the company using the best basis for
market segmentation?
► Does
it have sound criteria for rating the
segments and choosing the best ones?
► Has
it developed accurate profiles of each
target segment?
Strategy
► Has
the company developed a sound
positioning and marketing mix for each
target segment?
► Are
marketing resources allocated optimally
to major elements of the marketing mix –
product quality, service, salesforce,
advertising, promotion and distribution?
Strategy
► Are
enough resources or too many
resources budgeted to accomplish the
marketing objectives?
III. Marketing Organization
► Formal
Structure
► Functional
► Interface
Efficiency
Efficiency
Formal Structure
► Does
the marketing manager have adequate
authority over and responsibility for
company activities that affect customer
satisfaction?
► Are
the marketing activities optimally
structured along functional, product, enduser and territorial lines?
Functional Efficiency
► Are
there good communication and working
relations between marketing and sales?
► Is
the product management system working
effectively? Can profits be planned as well as
sales volume?
► Are
there any groups in marketing that need more
training, motivation, supervision or evaluation?
Interface Efficiency
► Are
there any problems between marketing
and manufacturing, R & D, purchasing,
finance/accounting and legal that need
attention?
IV. Marketing Systems
► Marketing
Information Systems
► Marketing
Planning Systems
► Marketing
Control Systems
► New
Product Development
Marketing Information
► Is
the marketing intelligence system
producing accurate, sufficient and timely
information about marketplace
developments with respect to customers,
prospects, distributors and dealers,
competitors, suppliers, and various publics?
Marketing Information
► Are
company decision makers asking for
enough marketing research/feedback and
are they using the results?
► Is
the company employing the best
methods for market and sales forecasting?
Marketing Planning
► Is
the marketing planning system well
conceived and effective?
► Is
sales forecasting and market potential
measurement soundly carried out?
► Are
sales quotas set on a proper basis?
Marketing Control
► Are
the control procedures adequate to ensure
that the annual plan objectives are being
achieved?
► Are
the profitability of products, markets,
territories and channels of distribution analyzed
periodically?
► Are
marketing costs budgeted and examined?
New Product Development
► Is
the company well organized to gather, generate
and screen new product ideas?
► Does
the company do adequate concept research
and business analysis before investing in new
ideas?
► Does
the company carry out adequate product
and market testing before launching new
products?
V. Marketing Productivity
► Profitability
► Cost
Analysis
Effectiveness Analysis
Profitability Analysis
► What
is the profitability of the company’s
different products, markets, territories and
channels of distribution?
► Should
the company enter, expand, contract
or withdraw from any business segments
and what would be the short and long run
profit consequences?
Cost Effectiveness
► Do
any marketing activities seem to have
excessive costs?
► Can
cost reducing steps be taken?
Marketing Function
► Products
► Price
► Distribution
► Advertising,
► Salesforce
Promotion and Publicity
Products
► What
are the product line objectives? Are
these objectives sound? Is the current
product line meeting the objectives?
► Should
the product line be stretched or
contracted upward, downward or both?
Products
► Which
products should be phased out?
► Which products should be added?
► What is the buyer’s knowledge and attitudes
toward the company’s and compeitors
product quality, features, styling, brand
names, etc.
► What areas of product strategy need
improvement?
Price
► What
are the pricing objectives, policies,
strategies and procedures?
►
► To
what extent are the prices set on cost,
demand and competitive criteria?
► Do
the customers see the company’s prices
as being in line with the value of it’s offer?
Price
► What
does the company management know
about the price elasticity of demand and
competitor’s prices and pricing policies?
► To
what extent are price policies compatible
with the needs of distributors, suppliers,
and government regulation?
Distribution
► What
are the distribution objectives and
strategies?
► Is there adequate market coverage and
service?
► How effective are the channel members:
distributors, dealers, mfg reps, agents, etc?
► Should the company consider changing it’s
distribution channels?
Advertising, Promotion, Publicity
► What
are the company advertising
objectives? Are they sound?
► Is the right amount spent on advertising?
How is the budget determined?
► Are the ad themes and copy effective?
► What do customers and public think about
the advertising?
Advertising, Promotion, Publicity
► Are
the advertising media well chosen?
► Is the internal advertising staff adequate?
► Is the sales-promotion budget adequate?
► Is there effective and sufficient use of sales
promotion tools such as samples, coupons,
displays, sales contests, etc?
► Is the publicity budget adequate? Is the PR
staff competent and creative?
Salesforce
► What
are the organization’s salesforce objectives?
► Is the salesforce large enough to accomplish the
objectives?
► Is the salesforce organized along the proper
principles of specialization – territory, market,
product?
► Is there competent sales management to guide
the salesforce?
Salesforce
► Does
the sales compensation level and
structure provide adequate incentive and
reward?
► Does the salesforce show high morale,
ability and effort?
► Are there procedures adequate for setting
quotas and evaluating performance?
► How does the company’s salesforce
compare to competitors’ saleforces?
Oh My Gosh
► Yes
► Yes
► Yes
► Yes
It’s a big undertaking
Most every line here can be applied
to your business in some way
Even if you aren’t the boss
Doing even part of it will find you a
niche, opportunity or competitive
foothold you didn’t see before.
What’s the next step?
► Compile
► Short
your Findings
Term Recommendations
► Medium
& Long Term Recommendations
► Develop
a written Marketing Plan
Resources
The marketing audit outline presented here is
excerpted from the book
Marketing Management
by
Professor Philip Kotler
Northwestern University