Conduct a marketing audit Essay
A marketing audit is a function, in the context of management operations, by which the assessment of the implementation of strategic marketing at tactical level is attempted. The application of marketing audit results in testing the compatibility and comparability of the objectives, sought to be implemented within the marketing strategy, with measurable targets which are achieved in reality.
This can be implemented through the presentation and analysis of results in different areas of easiness operation which affect the application of marketing throughout the company. Thus, a marketing audit is implemented in the following areas: a) Marketing environment It is common sense that companies don’t exist outside their market/s, which means that their operations can only be viewed under the spectrum of a specific marketing environment.
Whatever takes place in the marketing environment affects the companies that exist in it and, in essence, are parts of it. Therefore, when performing a company’s marketing audit, it is essential to identify and analyze the external actors that constitute the local or broader business environment for the company. In a study of how a marketing audit is implemented on Taiwanese firms, two hypotheses are stated, with regards to how a marketing audit is affected by the
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According to them, when the environment is dynamic/competitive, characterized by a low level of resources, companies perform marketing audits on a more intensive level, while in cases where business resources available through the marketing environment are more abundant, and as a result the level of competition s low, firms are less interested in conducting marketing audits. B) Marketing strategy Orientation and direction through decision making are the core functions of a company’s marketing strategy.
One of the goals of a marketing audit is to check the applicability, effectiveness and efficiency of a company’s current strategic marketing goals, in other words to examine whether the company operates in the desired direction or moves towards the wrong targets (or no targets at all). Although setting the goals of marketing strategy when starting operations is usually considered efficient to a surprisingly high number of companies, testing the connection of a changing market reality with the company’s purpose ensures a long-term survival and profitability.
A marketing audit can save a company from losing touch with the marketing environment, through the re-assessment of the strategic marketing goals and the subsequent approval of the existing marketing strategy (if it successfully corresponds to current market trends and needs) or re-engineer it, in order to obtain BAGMAN’S Conduct a marketing audit By paragraph c) Marketing organization d) Marketing systems ) Marketing productivity f) Marketing function A marketing audit is characterized by four basic functions: a) The broad consideration, based on the horizontal analysis, of the marketing functions of the business (marketing environment, objectives, strategies and systems, b) The independence of the auditor performing the marketing audit c) The systematic investigation before evaluation, which is aimed at scientific and statistical analysis of findings d) The schedule for the implementation of the marketing audit, not only in times of crisis, when it is considered the last resort, but periodically.
As a result, the objectives which, a firm seeks to achieve, as a result of the implementation of a marketing audit, are to determine the image that has been formed in the market, about the company itself and other competing companies in the same business, and according to that, after analysis of data, an improved marketing strategy to be developed, aimed at strengthening the external image of the enterprise to consumer awareness and against competitors. Moreover, it should be investigated whether the pricing policy is responsive to the needs of existing and potential buyers. Potential or existing customers can consider product prices high, low or fair, thereby regulating the active demand for the products of the company.
Also, it is necessary through the marketing audit to propose and develop a system for evaluation of the distinctive properties of different products of the company, which play a decisive role in whether these products will be commercially successful. Ultimately, the main objective of the marketing audit should be to develop ways and methods-proposals aimed at improving the skills and abilities of the personnel in the ales department of the company, in order to promote the products and achieve the sales targets. This may mean the provision of additional incentives and training, to the existing sales-force, and the recruitment of new salespeople. The above objectives of the marketing audit are not restrictive, since the implementation of the initial objectives may differentiate when unforeseen problems arise, and it is necessary to solve them.
Finally, we can say that the marketing audit, apart from focusing on a particular part of business operations, should analyze and assess the effectiveness of the overall marketing function. From past experience, it has been observed that problems arise in other areas of focus than the ones that the marketing audit procedure seeks to evaluate. Moreover, as a general rule of thumb, on top of identifying problem areas, the aim of marketing audit should be to propose solutions and provide estimates of future opportunities and threats, through the analysis of strengths, weaknesses, opportunities and threats. Of course, an important and ultimate objective of the management and shareholders, so that appropriate measures can be taken to correct or redefine the marketing strategy.
Technological factors in coffee industry A further driving force is the role of technology. Line management is a significant issue for coffee houses as often the demand is concentrated in the early mornings. For example, Struck has been able to achieve customer service efficiency by introducing automatic espresso machines. According to Michelle Gas, Chief Merchant of Global Product, Struck, efficiency is a key driver in customer satisfaction as customers “want their beverage in under three minutes. Lingeringly, however, it appears these efficiencies must be balanced with creating a mystique round the coffee experience and having an awareness of the consumers’ price-value ratio.
For example, Struck customers, who pay a premium for coffee, seem to miss the elaborate process of brewing and drink creation. Struck’ CEO recently expressed a concern that the brand was becoming “watered down” and such gains in efficiency threatened to commoditized the brand. Dunking Donuts, however, has seen less resistance to its technological innovations as its products are generally cheaper and its brand is tied to simplicity. For example, rather than relying on baristas to rate its new line of espresso-based drinks, Dunking’ Donuts hired an expert to design an “idiot proof $8,000” machine which makes cappuccinos in less than a minute and at a lower price than competitors.
One customer noted that both the Struck and Dunking’ Donuts’ drinks taste good “but Struck takes too long. Finally technology is impacting this industry in the form of increasingly sophisticated home brewing machines which are able to at least replicate, if not beat, the quality of coffee prepared at many of these stores. Though it is unclear of the impact of these canines on the coffee players, this is an area of increased growth and one for these competitors to monitor. Risk Factors Related to the Coffee Industry Increases in the cost of high quality Arabica or Robusta coffee beans could reduce our gross margin and profit. Green coffee is our largest single cost of sales.
Coffee is a traded commodity and, in general, its price can fluctuate depending on: weather patterns in coffee-producing countries; economic and political conditions affecting coffee-producing countries, including acts of terrorism in such countries; foreign runners fluctuations; and trade regulations and restrictions between coffee- producing countries and the United States. If the cost of wholesale green coffee increases due to any of these factors, our margins could decrease and our profitability could suffer accordingly. Cyclical swings in commodity markets are common and 2008 was an especially volatile year, with the price of coffee climbing to record levels until mid-year, then declining with most other commodity markets in the second half of calendar 2008.
It is expected that coffee prices will remain volatile n the coming years. Although we have historically attempted to raise the selling prices of our products in response to increases in the price of wholesale green coffee, normal levels, we are not always able to pass the price increases through to our customers on a timely basis, if at all, which adversely affects our operating margins and cash flow. We may not be able to recover any future increases in the cost of wholesale green coffee. Even if we are able to recover future increases, our operating margins and results of operations may still be materially and adversely affected by mime delays in the implementation of price increases.
Disruptions in the supply of green coffee could result in a deterioration of our relationship with our customers, decreased revenues or could impair our ability to grow our business. Green coffee is a commodity and its supply is subject to volatility beyond our control. Supply is affected by many factors in the coffee growing countries including weather, political and economic conditions, acts of terrorism, as well as efforts by coffee growers to expand or form cartels or associations. If we are unable to procure a sufficient supply f green coffee, our sales would suffer. Some of the Arabica coffee beans of the quality we purchase do not trade directly on the commodity markets. Rather, we purchase the high-end Arabica coffee beans that we use on a negotiated basis.
We depend on our relationships with coffee brokers, exporters and growers for the supply of our primary raw material, high quality Arabica coffee beans. If any of our relationships with coffee brokers, exporters or growers deteriorate, we may be unable to procure a sufficient quantity of high quality coffee beans at prices acceptable to us r at all. In such case, we may not be able to fulfill the demand of our existing customers, supply new retail stores or expand other channels of distribution. A raw material shortage could result in a deterioration of our relationship with our customers, decreased revenues or could impair our ability to expand our business.
The coffee industry is highly competitive and if we cannot compete successfully, we may lose our customers or experience reduced sales and profitability. The coffee markets in which we do business are highly competitive and competition in these arrests is likely to become increasingly more intense due to the relatively low barriers to entry. The industry in which we compete is particularly sensitive to price pressure, as well as quality, reputation and viability for wholesale and brand loyalty for retail. To the extent that one or more of our competitors becomes more successful with respect to any key competitive factor, our ability to attract and retain customers could be materially adversely affected.
Our private label and branded coffee products compete with other manufacturers of private label coffee and branded coffees. These competitors, such as Kraft General Foods, Inc. (owner of the Maxwell House brand), The Kroger Co. , and Smackers (owner of the Folders brand), have much greater financial, marketing, distribution, management and other resources than we do for marketing, promotions and geographic and market expansion. In addition, there are a growing number of specialty coffee companies who provide specialty green coffee and roasted coffee for retail sale. If we are unable to compete successfully against existing and new competitors, we may lose our customers or experience reduced sales and profitability.