2.1 The Marketing Audit
In considering marketing analysis ‘An external and internal audit is carried out as part of the broader process of market analysis to determine the opportunities existing in the marketplace (Gilbert, 1999).’ To do this, at stage one, the company needs to gather information for the external audit. This information can be categorised using PESTLE analysis. This acronym stands for and considers the following issues that may affect the company:
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Political – i.e. Regulations such as planning permission will influence where you can locate
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Economic – i.e. Disposable income levels influence consumer spending
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Social – i.e. Demographics considering age and sex distribution will influence consumer spending differently
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Technological – i.e. Technology is rapidly developing and the internet is know another outlet that affects consumer spending
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Legal – i.e. Legislation has to be considered and regulations such as equal opportunities have to be met
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Environmental – i.e. environmental issues such as pollution
‘Equally as important as this external business environment to a company’s marketing plan, is knowledge and understanding of its internal strengths and weaknesses. In marketing terms this process is known as SWOT analysis (Hannagan, 2002).’ The acronym SWOT stands for:
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Strengths
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Weaknesses
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Opportunities
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Threats
SWOT analysis is used to identify strengths and weaknesses that should relate to company strategies in view of competitors. In addition to this, the company can then consider the opportunities and threats of which competition and the macro environment have an impact on the business which can be cross-referenced with information arising in the PESTLE analysis. SWOT analysis is presented in the following form and can raise the following issues (fig.2):
Figure 3. SWOT Analysis Matrix
With SWOT analysis it would also be of use to the company to produce a matrix from the competitor’s point of view; doing this will focus on areas in the firm that may need to be developed and improved.
In order to come to these conclusions in the PESTLE and SWOT analysis, management will need to research the market area the business is in. ‘Market research is the planned, systematic collection, collation and analysis of data designed to help management of an organisation to reach a decision about its operation and to monitor the results of these decisions (Hannagan, 2002).’ Market research needs to be implemented so the company can set itself objectives by finding customers attitudes (such as buyer behaviour), competitors and the markets that affect the firm. Information can be collected by:
- Quantitative data such as journals and secondary data, for example, from The Office of National Statistics
- Qualitative research in obtaining primary data through questionnaires, suveys, etc
If research is poor and not carried out properly the business may have set itself strategies with unattainable objectives.
3.0 The Marketing Planning Process
The marketing planning process is systematic and can be shown as a cycle:
The process is cyclical because once the procedure is completed and the initial strategy is implemented at Stage Five, for continuous improvement and keeping up with competitors, the business will have to consider Stage One again.
‘Planning is the most important activity of marketing management (Gilbert, 1999)’
The company needs to recognise what to plan for and why; such as products, pricing, placement and promotional campaigns (the four p’s discussed later) as well as other functions. This planning needs to be structured in order to focus management activities, and in becoming a marketing orientated company, it will be one of the primary functions for management.
3.1 Marketing Strategy
‘Strategy involves positioning an organisation and giving it a sense of purpose, and this has to include the needs of the marketplace (Hannagan, 2002)’
Marketing strategy is influenced by trends in consumer spending and fashions in the market place. It should be the companies’ objective in producing a strategy to recognise these trends in order to provide a service or product that will fit in with the market and be profitable. A company may have an excellent product but if it doesn’t fit in, it may not sell as well.
In order to recognise trends in the market place or exploit a market that is relatively undeveloped; the company should try and identify customers that can be grouped into segments, this is marketing segmentation. ‘Segmentation is based on the characteristics of customers such as income, age, geography and life style (Hannagan, 2002).’ In doing this the company may be able to identify a niche market in the area in order to satisfy customers where before the product/service was unavailable.
3.2 The Ansoff Matrix
The Ansoff Matrix (fig.4) is a tool/analysis to see how far the company is penetrating its market in order to optimise its reach of customers and how they maybe able to enter and expand new markets in relation to the product. It also identifies the need for product development and diversification.
Existing
Markets
New
Existing New
Products
Figure 4 The Ansoff Matrix (Hannagan, 2002)
3.3 Market Positioning
Management also needs to consider targeting positioning in the market. ‘Positioning as a marketing concept is based upon a market position of image, price and quality rather than geographical positioning (Gilbert, 1999).’ This suggests the placing of the business and its product will be important in order to compete positively with its competition. Also, the customer needs to be able to distinguish these qualities of the business for the company to achieve market advantage. This could be providing pricing offers that could enhance the image of the business and its branding.
4.0 The Marketing Mix
‘The abilities of the company can be managed by the marketing organisation. They can control four main elements of a company’s operation, which are often referred to as ‘the marketing mix’ (Westwood, 1998).’
The marketing mix is also known as the four p’s:
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Product
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Price
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Place
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Promotion
The philosophy of the mix is that they all affect one another and equilibrium of these factors are essential. Emphasising one and neglecting the others results in poor practice. Management needs to ensure that the product is marketable in satisfying customer needs and consider a suitable price that reflects the quality of the product in relation to competition. Product availability for customers relates to how and where customers can purchase the product; will it be available in an outlet, telephone/mail order, or maybe through the Internet? Promotion of the product or service is necessary so that the consumer actually knows that it exists. This could be through advertising, which enhances the reputation of the organisation.
Another important variable can be considered – People. ‘Including people as a factor emphasises the importance of all those involved in the transaction of a service, including the customer and the person (or people) providing the service (Hannagan, 2002).’ A marketing orientated company will need to ensure a level of customer service, which may continue after the sale, in order to create a relationship with the customer. This will lead to customer loyalty, in turn leading to customer retention as Thomas and Housden suggest ‘Gaining a new customer is a considerable achievement, but it is only half the story. The profit comes from developing a relationship that leads to repeat or regular purchases, which are achieved at a lower marketing cost than the initial transaction. (Thomas and Housden, 2002)’
5.0 Conclusion
Other companies may be orientated in other ways where their mission statement is geared towards internal functions like sales and productivity. The marketing orientated company focuses its strategies in satisfying the customer in order to be profitable. This is realised through the planning process from analysis to implementation. For continuous improvement the company needs to keeping going through the cycle in order to identify changing customer attitudes and keep up with the competition.
Word Count: 1500 words
6.0 References
CIM1- CIM; , Accessed (15th December 2003)
Hannagan T. (2002), Management Concepts and Practices, FT Prentice Hall
Gilbert D. (1999), Retail Marketing Management, FT Prentice Hall
Thomas B. & Housden M. (2002), Direct Marketing in Practice, Heinemann
Westwood J. (1998), The Marketing Plan: A Practitioner’s Guide, Koban Page Ltd
7.0 Bibliography
- Hannagan T. (2002), Management Concepts and Practices, FT Prentice Hall
- Gilbert D. (1999), Retail Marketing Management, FT Prentice Hall
- Thomas B. & Housden M. (2002), Direct Marketing in Practice, Heinemann
- Westwood J. (1998), The Marketing Plan: A Practitioner’s Guide, Koban Page Ltd
- Atkinson J. & Wilson I. (1996), Strategic Marketing: Cases, Concepts & Challenges, Harper Collins
- Booth D. (1990), Principles of Strategic Marketing, Tudor Publishing
- Randall G. (1994), Effective Marketing, Routledge
- Vassus T. (1996), Strategic Marketing Management, Que
- Pidgeon J. & Foley J. (1999), Marketing: The Foundations of Successful Business, Guild of Master Craftsmen
