Do Business Well

The key role of research in effective marketing planning was introduced. The marketing audit comprises research and analysis of the internal and external environment as follows:

• The internal audit reviews existing marketing activities and assesses their effectiveness in terms of contribution to revenue, brand enhancement, customer service, customer retention, market share or sales leads.
• The external audit considers the micro-environmental influences (customers, suppliers, partners, distributors and competitors) and macro-environmental influences (political, economic, social, technological and legal) within which the company operates.

The circles representing different aspects of the business environment show that from a company’s perspective, the various components of the micro-environment are intimately connected with the operations of its business, but the macro-environment is one step removed. This means that a company has some degree of control over the micro-environmental influences, but cannot directly influence the ‘bigger picture’ of the macro-environment, which would include such issues as interest rate changes, new legislation, etc. By conducting a marketing audit, a company can at least monitor and be aware of the implications of likely changes in the macro-environment, even if it cannot directly control them.

Competitor analysis

 

An important part of the audit is competitor analysis, in which the goal is to undertake a benchmarking exercise by identifying the company’s chief competitors, analysing their individual marketing strategies, and hence seeing where to position the company for maximum advantage. The first step is to identify the major players in the market. The Yahoo! Directory (www.yahoo.com) provides a comprehensive categorization of many business sectors. Zenithmedia (www. zenithmedia.co.uk) presents the main operators, split by industry sector. You can often see which companies get the most traffic by checking the Media Metrix 500 (www .mediametrix com).

 

The second step is to study the top five or ten competitors carefully, as you can learn a lot from the material posted on their Web sites. Look for:

• the scope of products or services offered;
• the distribution system for products;
• the scope of guarantees, policies and other customer service procedures;
• the overall look, feel and functionality of the Web site;
• sophistication of the payment system;
• the degree of personalization offered;
• advertising campaigns and offers;
• strengths and weaknesses from the customer’s point of view;
• the statement of vision or purpose;
• areas where the competitor holds a market advantage;
• vulnerabilities or gaps in what is offered.

Examining new service offerings from the Internet market leaders such as Amazon or Cisco can also give valuable insight into the latest possibilities. Some companies accord a central role to monitoring the activities of their competitors — sometimes to the extent of industrial espionage, or spying.

 

Customer analysis

 

Wilson (www.wilsonweb.com) provides a framework that can be used to analyse customers and their changing needs (Table 10.1).

 

SWOT analysis

 

The analysis of the internal and external environment can be pulled together by means of a SWOT analysis.

 

S = strengths

 

W = weaknesses 0 = opportunities

 

T = threats

 

This exercise allows the marketer to compare and match a company’s internal strengths and weaknesses with the opportunities and threats identified in the external environment. It can therefore facilitate the choice of the most appropriate strategy for achieving the stated objectives through definitive and focused action. Speed of action is particularly important for plans that include a significant element of online activity, because competitive advantage tends to be short-lived. It is easy for competitors to monitor each other’s online activities, as described above.

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