A short (6 minute) video on Marketing Basics – Marketing audits with onions and pestles. What is a marketing audit? Why do we need one? How do we do it?
Hi I’m Kim Tasso
Today we are looking at a basic marketing theory – the marketing audit. Although looking at the props I’m using – an onion and a pestle – you’d think this was a cooking show. So in a few minutes you’ll know how to conduct a marketing audit and why it will help your marketing be more effective.
So it’s Marketing Basics – Marketing audits with onions and pestles.
So what is a marketing audit?
Well, two of the leading experts in marketing – US side Philip Kotler and in the UK Malcolm McDonald define marketing audits as follows:
“A comprehensive, systematic, independent and periodic examination of the unit’s marketing environment, objectives, strategy and activities with a view to determining problem areas and opportunities and recommending a plan of action to improve the company’s performance” (Kotler)
“A means by which a unit can identify its own strengths and weaknesses as they relate to external opportunities and threats – a way to help management select a position in that environment based on known factors” (McDonald)
So – systematic and regular examination of the environment to identify the strengths, weaknesses, opportunities and threats (SWOT) and the aims and strategies so you can recommend a plan of action to improve performance…
Why do we need a marketing audit?
Well, the audit is kind of like the solid foundation of your marketing plan. Some people call it a situation analysis.
It provides a framework for you to research and gather data on all the important internal and external elements.
It makes it easier to spot issues and opportunities
It ensures that your strategy is based on data and fact – based on reality and stress-tested – not whim
It makes your marketing strategy evidence-based and helps you gain buy in when you can explain the reasons behind your decisions – it means you can take stakeholders on the journey from the data to the dream
So let’s start our marketing audit with an onion
In the movie Shrek accuses Donkey of being “Onion Boy” because he has so many layers. He is deep. That’s why onions are a good metaphor for marketing audits – because they have so many layers.
I didn’t use a real onion as it made me cry! Onions are the foundation of much cooking – soups, stews, casseroles, sauces etc. Marketing audits are the foundation of good marketing strategy.
You’ll see that there are lots of layers inside – and that’s kind of what we do in a marketing audit.
Most people – when they do analysis will keep it focused on the immediate internal things – for example the sales and clients for specific products. That’s the start of your internal analysis.
But a marketing audit extends through lots of layers…
Yes, we do internal analysis about the business – what sales and profits have been achieved with what pricing and what promotion and through which distribution channels and to which customers – as well as looking at your internal resources. Then we look at other things related to the organisation in its external environment.
But we systematically look at the external environment – near (inner layers of the onion) and far (outer layers of the onion).
In the near environment we will look at our competitors (the micro environment of other businesses in our market) and the alternatives our clients might choose to our services – we will look at the broader community or regional or national environments as well.
The far environment is where PESTLE comes in…
PESTLE looks at a variety of macro economic factors and a whole bunch of uncontrollable things that might impact our future markets and client needs
Political – The impact of political changes – e.g. capitalism free market attitudes or centralised and nationalised industries
Economic – Understanding business cycles, recessions, interest rates, trading patterns – the recent move towards universal income with the jobs retention scheme
Sociological and cultural – Changing trends in how we live such as sandwich generations, the ageing population and later life, nuclear and extended families
Technological – Covid has shown us a lot about digital transformation with working from home, cash less society and the move to online selling
Legislative – Issues such as taxation and the impact of regulation on industries, companies and consumers
Environmental – Everyone is concerned about climate change – carbon emissions and sustainability
It can take a lot of research to identify all the factors and then assess or rank them for their level of impact on our future markets and client needs and our business model for delivering value.
Some people have a shorter version of the PESTLE analysis and call it a SLEPT, STEP or PEST analysis
So – Make sure you conduct a comprehensive (onion) marketing audit before you decide on your objectives, strategies and campaigns. And an important part of your audit will be a PESTLE analysis
So. Before you start building your marketing plan – use an ONION for your marketing audit and include a PESTLE in your audit
Thanks for watching and listening
Other videos in the marketing basics series:
Marketing strategy for accountants and tax advisers
And here is a detailed article showing how marketing audits are integral to the marketing planning process.