SMM 3rd Session

Topic to be covered…. Industry updates Marketing Audit Segmentation, Productivity and ratio analysis

Marketing Audit

Marketing Auditing The organizations current market position The process of marketing auditing is for many organizations is still a relatively new and underutilized activity. This is despite a substantial and growing body of evidence which suggests that organization’s performance in the market-place is influenced significantly and directly by the strategist’s perceptions of three factors: The organizations current market position The nature of environmental opportunities and threats The organizations ability to cope with environmental demands

MARKETING AUDIT A marketing audit is a comprehensive, systematic, independent and periodic examination of a company’s or business units-marketing environment, objectives, strategies and activities with a view to determining problem areas and opportunities and recommending a plan of action to improve the company’s performance.

MARKETING AUDIT These definitions highlight the three major elements, Potentials & benefits of the marketing audit: The analysis of external environment and internal situation The evaluation of past performance and present activities The identification of future opportunities and threats

Five stages of marketing audit-cannon Define the market (SOP, growth rate, PLC stage etc) Determine the performance differentials (own vs industry) Determine the differences in competitive programmes (Market n Product development) Profile strategies of competitors Determine the strategic planning structure

Marketing Audit-example

Research on Brand Health Indicators This research revolves around the following strategic dimensions; Awareness Top of Mind Awareness Spontaneous Brand Awareness Aided brand Awareness Ad Awareness Total Brand Awareness Usage Brand Ever Used Brand Used Most Often Alternate Brand Frequency of use Previous brand Length of usage Disposition / Commitment Category Involvement Brand Attraction Brand Satisfaction Usage Future Intention Imagery International Brand Good Quality Attractive packaging Good Value for Money Good Taste A brand for people like me Brand Personality etc. Promotion Evaluation TV Print Radio Internet Company Representative POS Promotion Material Brand Activation

Market Segmentation Market segmentation is the identification of who your current and potential customers are. In today's competitive world, market segmentation must include current and potential ultimate consumers of your product/service.

Market Segmentation Customer characteristics and purchasing motivations provide the information needed to decide whether the firm can and should attempt to gain or maintain a sustainable competitive advantage for marketing to a particular market segment.

Bases for segmentation Geographic variables: region, population, Demographic variables Age, gender, income,education, family size etc Psychographic variables Interests, personality, self image, values & attitudes. Behavioural variables Usage rate, Price consciousness, occasion, user status

Segmental, productivity & ratio analysis The starting point is the specification of the cost objects of interest, for example, the productivity of operating via different channels, or serving different customer groups. Cost will be direct or indirect. Full cost needs to be determine for each cost object (i.e. segment), and the ways in which this can be done. Once this has been done the productivity can be measured and from these measurement question can be raised about the adequacy of each segment’s productivity. e.g. can effort be reallocated from segment A to segment B to improve these segments productivity?

Segmental, productivity & ratio analysis In relation to the question “where are we now?” it is useful to know that how resources have been utilized and with what returns. This is relevant whether the organization is large or small, commercial or non-commercial, engaged in manufacturing or service rendering.

An illustration of segmental analysis As discussed, a segment is any cost object which is of interest, and is synonymous with the notion of activity, project etc. Thus marketing segments may be one – or a combination- of the following, Product line or range Channel of distribution Sales representative or territory Customer or customer/industry group Size of order

Profit analysis by channel Total A B C Revenue 875 950 1,225 3,050 COGS 325 285 490 1100 GP 550 665 735 1950 Direct MC 265 245 450 960 Indirect MC 330 275 250 855 Total MC 595 520 700 1815 Net Profit (45) 145 35 135

IMAGINE….. AN IMAGE SHOWING A COMPLETE OPPOSITE MEANING