Importance of marketing planning process and the marketing audit
|✅ Paper Type: Free Essay||✅ Subject: Marketing|
|✅ Wordcount: 1912 words||✅ Published: 1st May 2017|
In this contemporary and competitive world every small and large organisation needs to plan its activities to develop its strategy and to achieve their targets more effectively. One of the main components considered while designing a marketing plan is a marketing audit to assess the needs of a firm, to help them analyse the market opportunities, plan marketing activities, implement and monitor plans and control the use of marketing resources. Hence it’s essential for every firm to have a perfect marketing audit in order to design an effective planning process.
This report evaluates the importance of marketing planning process and the marketing audit. It also outlines the main challenges faced in gathering the required marketing information in both theoretical and practical perspective. It talks about the potential difficulties that may be faced by Innocent in implementing the proposed marketing plan.
During any marketing planning process; the foremost step is to gather the information. This can be done by different methods and theories but the basic sources of gathering marketing information are
Internal records such as customer feedback, sales reports and inventory levels
Marketing intelligence is used mainly to alert the firm to the changes in the external environment. The information is mainly based on the external secondary sources to form the continuous flow of information.
Marketing research- It is designed to provide information to the organisation to help them in making specific decisions. For example, whether to enter a new market or launch a new product.
Scientific method- A logical method that forces the analyst to follow procedures that reduce the possibilities of slipshod work or reliance on intuition.
Other than the above resources, the marketing decision making can also be actively increased by pricing models, correlation analysis, site-selection models and game theory (Hatton, A; 2000). These theories are discussed in detail below.
Game Theory: It consists of four sections corresponding to whether the game in question is static or dynamic and to whether it has a complete or in complete information (“Complete information means that there is no private information”). It can be operated either in static complete information or static incomplete information and dynamic complete information or dynamic incomplete information (Gibbons, R.S., 2000)
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Site Selection: A market research site is an area where the group identifies the opportunities and challenges, tests technological alternatives. However the selection is made by considering its representativeness of a greater area to ensure that the results obtained can be applicable in other areas with similar characteristics (Zandstra et al., 1981). Various activities like gathering and analysing secondary information, interviews to key informants and direct site recognition tours are helpful in selecting a site (Axelby, G., 2002).
Marketing Research: It is concerned with research into marketing processes. It has been defined by the American Marketing Association as “the systematic gathering, recording and analysis of data about problems relating to the marketing of goods and services” (McDonald, M., 2007). There are two forms of marketing research, External or Internal. The external research activity is conducted within the competitive environment outside the firm, while internal marketing analysis gives a much valuable intelligence of sales trends, change in marketing mix and advertising levels. Apart from this, there are also reactive and non-reactive research methods. The former involves some form of proactive assessment in the market place, and later is based on the interpretation of observed phenomena or extant data.
Scientific Method: A logical method that makes the firms to follow procedures in order to reduce the possibilities of slipshod work or reliance on intuition. It consists of four stages which are Observation, Formulation of hypotheses, prediction of the future and testing hypotheses. For Instance, a firm running on a normal pace wanted to develop some opportunities it starts by first observing the market and the competition, formulate the competitor’s solution as the sole hypothesis and predict the future by planning to apply the solution to the firm and test it in the market. This allows the firm to decrease the risks associated by entering the market and gives a proper and logical result.
So, it’s an obvious fact that information and market research are the main ingredients for the success of any firm. Good information can result in a proper plan, which is why one should be sure of the right questions to ask such as: “who are our customers and what is our market share?” and so on.
Generally all the theories above suggest that gathering the information is very essential for market planning process, but it should also be considered that the information should be gathered according to the organisation need. Hence, the information is gathered according to the need of the innocent for proposed marketing plan. Since Innocent is going through the financial crisis, keeping that in mind a new plan is proposed to overcome the loss caused by the economic downturn since two years. Decision making is complicated yet critical aspects within this situation, however gathering the background information for performing the market research is considered as less complicated process.
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As Innocent is aware of its internal environment and its market position in the industry at present, the planning process is designed in such a way to outline the weaknesses and potential strengths and provide valuable information into a launch of a new product in the UK market and expand its base in EU market. The information is mainly gathered by taking into account of the internal records such as customer feedback and sales reports. The study of these internal records has given an idea about the potential pitfalls in the present marketing plan such as decrease in the sales volume and customer inclination towards cheaper products due to recession which eventually resulted in the loss of the company. Therefore, an external research has been carried out in order to understand the customer needs and develop the new product line according to them to keep the existing customers and attain new ones. This external research is performed mainly by organising the events and face to face reviews with key customers for the information about the need and the changes they want to better perform in the present market. Innocent’s business is mainly product focused rather than market focused, however it should be mainly market focused to generate profit to the business . Levitt also argued that business should be viewed as customer satisfying process but not as goods-producing process (Wilson, T., 1992).
Furthermore, these internal and external researches throws light on the opportunities and problems for innocent and help in understanding the SWOT of the company and producing an effective marketing audit. Analysis of the stable and consistent market position of innocent in UK market gave an opportunity to generate a new marketing objective to the company. According to Ansoff Growth matrix, Innocent’s new market objective is to be in existing UK market with a new product and also with existing products in the new EU market (Foundations of marketing).
It is easy for Innocent to launch a new product line in UK market as it has good consistent performance. Since Innocent is aware of its customer base and its market segmentation, the need for information gathering is very minimal. This will allow them to gain the former customers back who are willing to pay less to the Innocent products. With UK’s quarter population willing to consume smoothies and Innocent being the market leader in the smoothies industry, it is easy for them to launch a new product line. So, with the help of internal records and past performance of the company, it is now clear that there is a need to launch a new product that could do wonders to the company. In addition, Innocent is trying to move to a new market in Europe which is not an easy process and the information gathering has different criteria in a new market. Observing the industry and competitors strengths and their products will help Innocent to understand the customer’s needs and work according to them to make an impact in customers view. The proposed marketing plan covers an effective marketing mix that suits the EU market and most importantly the low price and some different promotional activities like product sampling and events conducted on healthy drinks.
So, gathering information is worked by using theories like segmentation of the market according to site-selection and observing new market by using scientific method. But speaking practically most of the organisations do not rely on theories and works according to the market variation. So in cases like these swift and careful decisions should be made as application of theories is a time consuming process. It also makes marketing plan complex and critical for organisations to understand and will lack the flexibility.
Marketing plan will only be as good as the information on which it is based and the marketing audit is the means by which information for planning is organised. As the marketing audit provides the backbone analysis that supports both marketing and corporate decision, it is considered most essential to the planning process. “A marketing audit is a systematic, critical and unbiased review and appraisal of all the external and internal factors that have affected an organisations commercial performance over a defined period”. It is based on the current situation and answers the question: ‘Where is the organisation now?’ The marketing audit is essentially a database of all market-related issues for the company, which forms part of the company-wide management audit. It also provides a basic understanding of how the organisation relates to the environment in which it operates by enabling the management to select a position within the environment based on known factors. It is generally structured into 2 parts.
External audit- variables that are uncontrollable (business and economic environment, the market, the competition)
Internal audit- variables that are controllable (organisation’s strengths and weaknesses, operations and resources vis-à-vis the environment and competitors)
In today’s world every small and big organisation has a need for marketing audit as it helps in gathering information and makes organisation to make decisions in appropriate way. Often the need of an audit does not manifest itself until things start to go wrong for a company, in the form of declining sales, falling margins, lost market share or underutilized production capacity. Neverthless, the audit has been used regularly by organisations these days as the market started fluctuating every now and then.
Its primary objective is to ensure that the decision-making process is an informed one. The audit seeks to provide information on two key aspects of the marketing environment
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