The CADDIE process; Collect & analyse
In this video we explore the first stage of the CADDIE business-marketing planning process. We discuss the COMP factors of a marketing audit, how research can be as needed, and everyday and of a strategic or tactical nature.
The CADDIE process: collect & analyse
Marketing research has long been recognised as the foundation of marketing practice (Saegart & Fennell, 1991). Zaltman and Coulter (1995) agree and suggest that poor quality research accounts for 60-80% of product failures. They also suggest that quality marketing research leads to better decision-making, however, they caution, that rigorous marketing research cannot always guarantee success.
The stages of the business-marketing planning process
There are two visual representations of the CADDIE process one outlines the stages the other the people involved. This diagram outlines the 3 stages of the business-marketing planning process. Whilst thei diagram shows the process the next diagram shows the people involved in the process.
In this module we will explore the role of marketing research in the CADDIE business-marketing planning process. We look at the process and the people involved in the process. This module is the first of the 3 stages of the CADDIE – business marketing planning process [CA DD IE]. We will also outline the importance of the 2 types of research – as needed research and everyday research – and how marketing practitioners employ this information to make better informed decisions in the other stages of the business-marketing planning process [DD IE].
The CADDIE process: collect & analyse
I tell students that this is the most important slide you will ever see, partly to get the students attention but also to ensure that students are aware of the importance of the business-marketing planning process and how it is an essential component of a business/marketing degree.
The CADDIE process: collect & analyse
I employ this image to convey a message – imagine if a lady went to a dressmaker to have her wedding dress made and the dressmaker was so certain of her abilities that she did not take any measurements. This may happen – but it would not be common. In much the same way the ‘businessmaker’ must ensure that they measure the prevailing conditions [COMP] in which they operate. Remember if it is not measured in cannot be managed and if it is not measured it cannot be valued.
The 3 stages of the CADDIE process
The CADDIE business-marketing planning process has 3 stages. 1: collect & analyse where relevant information is collected in the form of a customer audit, an organisational audit, a market audit, and a product audit. The purpose is to ensure hat the past and present COMP factors are documented to ensure that there is better forecasting of the future conditions that the organiation will encounter and increase the chances of meeting future organisational objectives.
The people involved in the business-marketing planning process
There are two visual representations of the CADDIE process one outlines the stages the other the people involved. This diagram depicts the people involved in the business-marketing planning process. Although everyone is involved in the collect & analyse and implement & evaluate we can see that in the design and development of the business plan, the marketing plan, and the marketing action plans evolves from a strategic task to a tactical task.
Quality research reduces risk
Take a little time to read this slide: The importance of accessing high quality and relevant information in order to make informed decisions cannot be over emphasised. This is particularly important in today’s dynamic marketplace/environment with short planning cycles [e.g., technology products]. Other factors such as increased competition; higher consumer expectations, and increased public accountability have also increased the marketing practitioners’ reliance on accessing high quality and relevant information. The take away is that whilst quality research can reduce the risk of product failure it does not guarantee success.
The objectives of marketing research
The objective is to make timely and better-informed decisions; decisions that may be long-term and strategic or short-term and tactical. Given the increased importance of the CADDIE business-marketing planning process, it is critical that marketing practitioners clearly articulate their needs and the critical nature of marketing data to ensure that their IT needs are delivered (Mela & Moorman, 2018; Hair, Harrison, & Risher, 2018).
Activity [4 university friends catch up]
This activity is designed to sensitise students to the breadth of organisations and how the characteristics of the organisation [cOmp] will influence the business-marketing planning process. And, how the size of the organisation will influence your iinvolvement in strategies and tactics. [click on the link]
In this module we begin our exploration of the CADDIE process – specifically the CA of the CADDIE process. After comleting this module yo should have amore detailed understanding of the CADDIE business-marketing planning process, including the 2 main types of research that marketing practitioners employ as needed marketing research and everyday marketing research. You should also be able to outline how a marketing audit is synthesised into a report and a SWOT summary presentation for consideration by the Strategic Business Planning Group as part of the business-marketing lanning process.
As needed marketing research is research needed to better understand an emergent phenomenon. As needed marketing research is conducted when there are changes to the situational factors [COMP] that may impact on organisational performance [e.g., changes in customer preferences, changes in organisational performance, a change in market conditions, the entry of a new competitor/product to the market].
As needed marketing research may adopt a qualitative or a quantitative methodology, or a mixed method approach [qualitative and quantitative] where the emergent phenomenon is explored and then measured. The research may uncover a new marketing problem that requires special marketing attention. In these cases, an as needed marketing action plan will be designed and developed to manage the phenomenon and this process may be either:
- Part of the longitudinal and routine CADDIE business-marketing planning process
- Independent from the longitudinal and routine CADDIE business-marketing planning process
Author’s comment: As needed research is the traditional research taught in a business school as part of a ‘business research methods’ course.
Everyday marketing research is the research that marketing practitioners would undertake as part of their everyday work routine. The routine activities of marketing practitioners that are either strategic or tactical. We can classify everyday marketing research as strategic when a marketing practitioners collects and analyses information as part of a marketing audit for the Strategic Business Planning Group or tactical when it is a component of a marketing action plan. Everyday marketing research may be collecting information for a marketing action plan or performance information after implementation of a marketing action plan.
In the course of their work, marketing practitioners generally move freely between as needed marketing research and everyday marketing research. For example, during a marketing team meeting a marketing manager may table a report on some research that has been recently published in a trade magazine [for example, changing consumer preferences]. The chief researcher may make a presentation of the findings. The marketing manager may invite questions and comments from the meeting. The next item at the meeting may be a presentation, from the sales manager, of last month’s sales figures. During the sales manager’s presentation, it was noted that the sales from one particular retail store have unexpectedly dropped. The sales manager may indicate that he wishes to research that situation and report his findings at the next meeting.
Author’s comment: A marketing audit and report is likely to include as needed marketing research if situational factors have changed and new insight is needed. Regardless of whether the research is ‘as needed’ or ‘everyday’ it is important to develop market research skills as this provides the ability to critically evaluate information.
Everyday marketing research
We can define everyday marketing research as:
Research that is conducted regularly and routinely to monitor and achieve the marketing objectives of the organisation; this includes the steps to collect and analyse information, design and develop strategic marketing plans, implement and evaluate marketing action plans, and take corrective action when needed.
We will now turn our attention to everyday marketing research. Everyday marketing research is longitudinal and routine – it is part of a marketing practitioners regular and everyday routine. Everyday marketing research is both strategic and tactical.
Strategically, marketing practitioners collect and analyse everyday marketing research for the design and development of the business plan, the marketing plan, and the marketing action plans. The business planning process may be conducted on an annual, six-monthly, and sometimes on a quarterly basis. Some organisations have a rolling plan with regular reviews.
Collecting and analysing information and presenting it for inclusion in a business plan is referred to as conducting a marketing audit.
Following the marketing audit; the Chief Marketing Officer would report the findings to a Strategic Business Planning Group [which she/he is a member] for consideration. This information would help shape the organisational business plan and provide guidance for the plans of the various disciplines. Often within in a business plan and a marketing plan, the findings of a marketing audit are summarised and included under the heading – Situational analysis.
Tactically, marketing practitioners collect and analyse everyday marketing research data as part of their everyday evaluation of an organisation’s performance. Everyday marketing research, at a tactical level, monitors the performance of an organisation against the marketing objectives stated in the marketing action plans.
Author’s comment: A marketing practitioner is conducting everyday marketing research when he/she reviews the sales performance data.
Two types of everyday marketing research
Often when I talk with students [and sometimes business people] they think that research is something you do when you have a problem [a research problem]. However, it is important to highlight that marketing practitioners are constantly researching to make better informed decisions. Therefore, we can identify two types of marketing research 1 which is ‘as needed’ [when there is a change in situational factors] and the other ‘everyday research’ [part of the daily routine of marketing practitioners to ensure they meet the stated organisational objectives]. Both types of research are equally important, however, it is important to be able to differentiate between the two types and understand when it is appropriate to apply each type + I suggest that you read further on this.
5 stage of as neede marketing research
Most student would be familiar with the 5 stages of marketing research and the process. This slide provides an overview. Just keep in mind that as needed research can be undertaken at any stage of the business-marketing planning process whenever there is a change in situational factors that requires closer examination.
Data can be new or existing
When we undertake as needed research we generally look at two types of data – primary data which is collected for the first time and the situation or secondary data which presently exists either internal to the organisation or available externally. Secondary data is often quicker to access and more cost effective and is often the first option for marketing practitioners.
Select the right approach
Although there are a few academics that are devotees to one method most would suggest that researchers select the right methodology of the task and often employ both methods. A qualitative approach is employed when an exploratory approach is needed and a quantitative approach is employed when you want to measure the frequency that someting is occuring. Both methods are important and often marketing research will employ a mix of both approaches.
A student once said
A few years ago an MBA student told me that they would not be attending the next week’s lecture as it was on marketing research and as a State Manager he was not a researcher. I commented that what he just said surprised me as of all the students in the class he was the one I felt would get the most out of the lecture. He attended and then sent me an interesting email message about how he now saw himself as a marketing researcher. The interesting area was that he had a scotoma to everyday marketing research. Read his new view of research… What I see is the different approaches both qualitative and quantitative, and the importance of internal data.
Where do we find internal data?
In most organisations every transaction is recorded, once it was in a set of invoices, journals, and ledgers, today there are a number of software packages to record this information and allow easy access. For convenience and brevity, and recognising that organisations vary according to COMP factors, I have identified this as Software for Marketing Pracitioners [SfMP]. Keep in mind information varies according to a person’s role within and organisation some software is strategic and some tactical.
Where do we find internal data?
A marketing audit is the collection and analysis of relevant information. Software for Marketing Practitioners [SfMP] are tools that enable a marketing practitioner to work with greater efficiency and effectiveness. The marketing information that is collected is often referred to as marketing analytics and can be employed to gain a more accurate picture of: The past performance of the organisation, The present performance of the organisation, The likely future performance of the organisation [e.g., forecasting, scenario planning].
The architect metaphor
It is interesting to see how different professions undertake research, when we consider architects and all the areas that they must have knowledge before designing a home the list goes beyond researching the customer’s needs, the budget of the customer to regulatory requirements, the position of the house, etc.
The architect metaphor
Just like an architect would have written specifications for each area of the build – and some specifications would show the overall outcome and others would be specific to a discipline – a business must have an overall view of the business and have written specification for each discipline – these could be thought of as strategies and tactics.
The marketing audit
One of the important parts of the business-marketing planning process is the marketing audit, where marketing practitioners research the situational factors [COMP factors].
A marketing audit
We could define a marketing audit as: The regular, comprehensive, and structured collection and analysis of internal and external marketing related COMP data for presentation to a Strategic Business Planning Group for consideration as part of the CADDIE business-marketing planning process.
The ability to undertake a marketing audit and then report the findings is an integral part of the business planning process and a much sought-after skill. To conduct a marketing audit and report the findings requires knowledge of marketing concepts. In fact, the reason we have discussed the 3 mega-marketing concepts in such detail is to be able to apply this knowledge.
A marketing audit is conducted with the understanding that all organisations are unique and all strategy should enhance this uniqueness. Some call this uniqueness the ‘DNA’ of a business. The uniqueness comes from the organisational philosophy and the unique set of situational factors in which the business operates [COMP factors].
The COMP Factors - a customer audit
Generally, although there are exceptions, an organisation may not have the resources to target and position a product for each customer segment. The general idea is to approach the profitable customer segments and avoid the unprofitable customer segments. The objectives of a customer audit are to identify the customer characteristics and the customer segments
The COMP Factors - an organisational audit
An organisational audit is often the catalyst for serious conversations. Therefore, the CADDIE business-marketing planning process presents the opportunity for an organisation to adapt to the market. The organisational audit is not a creative document; it is exploratory and fact-finding and part of the planning process. The objective is to undertake an audit of the capabilities and constraints facing the organisation [other disciplines will conduct their own analysis].
The COMP Factors - a market audit
The market audit generally begins with a competitor audit [other sellers] – an analysis of competing brands, and products before moving on to other macro-external factors that may impact on the customer, organisation, and the total market. This process is sometimes referred to as environmental scanning. We will organise the macro-external factors into categories of Competition, Economic conditions, Market attractiveness, Sociocultural factors, Technological influences, Environmental considerations, Ethical & legal factors, and Political influences – the acronym of CEMSTEEP may act as mnemonic. In most organisations, marketing practitioners will work in concert with other disciplines to explore the macro-external factors.
The COMP Factors - a product audit
It should be kept in mind that there are a number of product considerations that are of importance to the business plan and the other discipline plans – this will vary regarding the nature of the product. It is unlikely that everyone in the Strategic Business Planning Group has an understanding of marketing – therefore detailing the nature of the product can assist members from other disciplines to make better informed decisions.
Audit of the situational factors
In keeping with COMP, we will begin our audit with the customer. However, the marketing concept is not just about satisfaction for the customer, therefore, it would be prudent to identify and remain focused on the organisation’s needs throughout the process. Starting with a customer audit is traditional, however, discussions with marketing practitioners suggests that sales performance data is also a good place to start – as this may indicate the presence and urgency of a potential problem.
It is worth noting that during the marketing audit the same information may be listed under more than one heading. For example, segmentation could be listed in customer, organisation, market, and product. However, this information is for analysis only and would be synthesised within the marketing audit report.
The marketing audit and the report are undertaken to enable the Strategic Business Planning Group to determine the attractiveness of the market and an organisation’s ability to compete within the marketplace, to identify the basis of competition within a market [where to compete, who to compete with, how to compete] and the strategic imperatives needed to compete successfully. These determinants will provide the directions for the marketing planning process.
Organisations that adopt a segment[s] of the market strategy will begin by identifying the market segments this information is important and during the decision-making process will be employed to determine:
- Which segments does the organisation intend to target?
- Which segments does the organisation not intend to target?
Generally, although there are exceptions, an organisation will not have the resources to target and position a product offering to appeal to each market segment. Organisation must approach the profitable segments and avoid the unprofitable segments.
Identify the customer segments and the characteristics of the segments.
- Determine the methodology for undertaking the market segmentation process
- Characteristics [sales, growth, profitability, lifetime value]
- Characteristics [demographics, psychographics]
- Characteristics [expectations – quality, value]
- Characteristics [product requirements]
- Consider an organisation’s capabilities & constraints, then identify the attractiveness of segments
- Bargaining power of customers [see Porter’s 5 competitive forces in this chapter]
- Identify income characteristics of segments [ability & willingness to purchase]
- Identify preferred payment methods, mediums,
- Location [in-store & on-line]
- Buying patterns [frequency]
- Motivators to enter the buyer decision process
- Satisfaction [transactional, cumulative, collective]
- Retention [NPS]
- Social media habits
- Word of mouth and referrals
- Competition within segment
- Consumer behaviour
- Involvement [e.g., family members, friends, groups, society]
Many organisations operate in a dynamic market and from time to time may need to realign their organisational philosophy and statements of purpose to better articulate their desired purpose. Often the need to realign the organisational philosophy and statements of purpose is recognised during the organisational audit; perhaps, the organisational audit is the catalyst for conversations. Furthermore, the organisational objectives are likely to be realigned after the marketing audit and the report has been presented. Therefore, the CADDIE business-marketing planning process presents the opportunity for an organisation to adapt to the market. The organisational audit is not a creative document; it is exploratory and fact-finding and part of the planning process. The objective is to undertake an audit of the capabilities and constraints facing the organisation [other disciplines will conduct their own analysis].
Clearly a marketing audit and the report is not ‘puffery’ or seeing the organisation ‘through rose coloured glasses’, therefore when the facts are listed and presented in the report it will be a combination of positive and negative factors – these could be summarised in the report as capabilities and constraints, however, it is not uncommon to discuss them as strengths and weakness.
- Past and present objectives
- Past and present performance
- 9 marketing objectives [3Xfinancial, 3Xstrategic, 3Xcommunication objectives]
- Gaps between budget forecast and actual achievements
- Current capabilities and constraints
- Key success factors, organisational competencies, culture, patents, technological skills, processes, employee performance, relative costs, marketing channel effectiveness, barriers to exit a market
- Revenue analysis
- Size, growth, pricing, strategies, total sales and margins by product, life cycle, market position, market-share by segment, cost of sales, shareholder value analysis
- Brand analysis
- Customer relationship analysis, brand strength [uniqueness, relevance], brand stature [esteem, knowledge], brand equity [value as an asset], brand awareness, brand associations
Author’s comment: It is easy to confuse a marketing audit with a market audit. A marketing audit covers all COMP factors. Whereas a market audit is more specific. You may recall that ‘a market’ is all current and potential buyers and sellers [domestic or commercial], and ‘the market’ are the factors that influence supply and demand. Therefore a market audit looks at buyers and sellers and the influencing factors.
After collecting and analysing the information from the customer audit and the organisational audit, marketing practitioners will turn their attention to the market audit. Given that a customer audit [buyer] has been previously undertaken, the market audit may begin with a competitor audit [seller]; an analysis of competing brands, products and other competing factors before moving on to other market influencing factors. A market audit will include macro-external factors that may impact on the customer, organisation, and the total market. This process is sometimes referred to as environmental scanning.
We will organise the macro-external factors into categories of Competition, Economic conditions, Market attractiveness, Sociocultural factors, Technological influences, Environmental considerations, Ethical & legal factors, and Political influences – the acronym of CEMSTEEP. may assist. In many organisations, marketing practitioners are part of the organisation and therefore marketing practitioners will work with other disciplines to explore the macro-external factors.
Organisations face different types of competition, exploring the source of competition can reveal a more holistic picture of the factors that may impact on sales.
We begin by identifying present and potential competitors. Then the characteristics of competitors are documented. Initially, this may seem a daunting task, however, in time it will become an everyday marketing research activity and a regular part of the sales manager’s report.
In the market audit report, it may be worthwhile to position competitor information as visually as possible – sometimes referred to as perceptual mapping. This may assist the executive team and other disciplines during the strategic business planning process and when articulating the desired market position and the basis of competition. For example, a pricing matrix [e.g., cost to customer V perceived value] would identify the value of the organisation’s products against competing products; this may assist the executive team across a range of decisions.
A market audit would reveal the capabilities and constraints of competitors and their place in the hierarchy – market size and market power. It is also worthwhile to document past responses when an organisation is faced with increased competition. Furthermore, by listing competitors’ past and current strategies it may provide insight to the future strategic directions of competitors.
The competition types are brand competition, product competition, generic competition, and total budget competition.
Brand competition: Is where a number of organisations offer similar and competing products to the same target market. Customers will often select the brand and then the product [e.g., select the brand of sports shoe and then the product]. Brand competition is present in automobiles – people often select automobiles by brand and then the model. Consider the SUV market where products may be similar and people will be influenced by brand and then the model. Perceptual mapping is often a useful tool to gain a visual perspective.
- Revenue analysis: Size, growth, pricing strategies, total sales and margins by product, life cycle, market position, market-share by segment, cost of sales, shareholder value analysis, past and current performance
- Current capabilities and constraints: customer relationship analysis, brand strength [uniqueness, relevance], brand stature [esteem, knowledge], brand equity [value as an asset], brand awareness, brand associations, past and current objectives, organisational competencies, culture, patents, technological skills, processes, employee performance, relative costs, marketing channel effectiveness, barriers to exit a market
Product competition: This is where organisations are competing with similar products and there is a choice [e.g., between different types of product some of which may be from the same brand], however, although similar – the products compete on features, benefits, and price. For example, compare the variety of competing products on offer in a supermarket [e.g., the types of biscuits]. Perceptual mapping is often a useful tool to gain a visual perspective.
- Analysis of competing products. perceptual mapping, features, benefits, pricing, size, revenue, profitability, growth
Generic competition: This is where the customer has a choice of different methods of achieving the same outcome – different products that may satisfy the same need [e.g., catching a train, bus, taxi, riding a bicycle, or driving a car to work]. A group of friends are considering a night out – one suggests a meal at an Italian restaurant another suggests a visit to the cinema, another a stand-up comedy night at a local pub. This is often referred to as substitute products.
Total budget competition: This is the broadest form of competition and recognises that at an holistic level all organisations compete for their share of the consumer’s available money – this is sometimes referred to as share of wallet. For example, a couple may be considering a holiday in the south-west of Western Australia, however, after a great deal of consideration they purchase a new refrigerator instead. The holiday has been postponed to a time when there are fewer competing needs. Some products are more vulnerable to total budget competition than others.
Models of market competition
Marketing practitioners must adapt their products and their organisations to suit the nature of the marketplace in which they operate. Markets have different models of competition [sometimes this is referred to as the 5 market models or 5 market systems]. Economists often use this classification as it provides a macro understanding of industries and industry trends.
Understanding models of competition can help organisations to make decisions regarding whether to enter/exit a market, what pricing strategies to adopt, and the overall attractiveness of a market. The market models of competition are pure competition, monopolistic competition, an oligopoly, a monopoly, and a monopsony – each is described below:
There are many different organisations offering the same products, barriers to enter the market are low
There are many different organisations offering different products
There is only one organisation offering the product
There are a few dominant organisations offering the product
There is only one buyer and more than one supplier
Dependent on situation
Pure competition: Many buyers and sellers with no dominant players and products that have limited augmentation [undifferentiated product]. These are often described as commodities – for example wheat, coffee, sugar, gold, oil. In pure competition, no one participant [buyer or seller] can influence the market greatly.
Monopolistic competition: Many buyers and sellers with no dominant players and products, however, there is the ability to augment the product and therefore differentiate one product from another. Laptop computers, large screen televisions are examples of monopolistic competition where the core product is essentially the same, however, competitors are distinct by aesthetic appeal, performance, build quality, price, status – etc.
Oligopoly: There are many buyers, however, due to barriers to enter the market there are only a small number of sellers. The core product is the same, however, in an oligopoly the products can be augmented to appeal to buyers. The airline industry is an example – the core product [safe transportation of the person and their baggage from one location to another] is the same, however, competitors are differentiated by reputation, service quality, price, convenience, status – etc. There is always the risk of sellers colluding to control the market.
Monopoly: There are many buyers, however, due to barriers to enter the market there is only one seller. This often occurs in government services where it would be inefficient or undesirable to have competition; for example, the issuing of passports. In a monopoly, buyers have no considered set of products and only one alternative. The costs of maintaining a monopoly [e.g., telephone lines] can be considerable so often governments open up the markets to provide competition. There is always the risk of sellers seeing no need to innovate.
Monopsony: There is only one buyer, however, there are many sellers [or organisers that may tender for a contract]. In a situation such as a monopoly [e.g., building essential services – water supply] there may be many alternative contractors tendering. In a monopsony, buyers have considerable power when the list of alternative suppliers is comprehensive. However, often a balance in negotiations occurs when a supplier may have a competitive advantage through skills, experience, and a global talent pool.
Warning: It would be wrong to assume that competition is limited to external competition. Often internal competition for organisational resources is intense; it should be noted that there is a downside to internal competition; Pfeffer and Sutton, (2000) state that intense internal competition results in winners and losers, this distorts employee focus, and turns ‘friends into enemies’, whereas, internal cooperation/collaboration is a strategic strength. Marketing practitioners refer to internal cooperation/collaboration as internal marketing. It is generally regarded that internal cooperation/collaboration and a focus on external competition are the catalysts for total product quality, value, customer satisfaction, and subsequently organisational satisfaction.
Economic conditions [cEmsteep]
The prevailing economic factors influence the economy and impact a number of factors including consumer confidence. Although the market audit report will outline the economic factors from a marketing perspective; it is likely that this information will also be included in the financial report delivered to the strategic business planning group for their consideration. However, it is important to note that this data will be insightful for marketing practitioners when designing and developing the marketing plans and marketing action plans – so it must be communicated. Therefore, a summary of the current and potential economic situations, GDP, consumer confidence indicators, business confidence indicators, employment rate, costs of raw materials, household disposable income, interest rates, exchange rates will influence marketing strategies and tactics.
Economic conditions fall into 4 classifications [prosperity, recession, depression, and recovery]. Consumer and organisational decisions that are made in periods of prosperity and strong economic growth are likely to be quite different to decisions that are made in periods of economic slowdown.
Market influencers [ceMsteep]
When organisations co-exist in a market they must compete to survive and to prosper – in nature this is referred to as natural selection – Darwinism.
Within any industry there would be factors that influence supply and demand within the market. Although many market influencing factors can be anticipated and controllable [to some degree]; there are other marketing influencing factors that cannot be anticipated and are beyond the control of the organisation. Consider, for example, how some organisations would be impacted by the weather – how would a mild summer or hot summer or unseasonal weather impact on sales of airconditioners. chocolate, clothing, events. Organisations often undertake scenario planning as part of risk planning.
Auditing the market influencing factors can assist the organisation to make strategic and tactical decisions regarding product offerings, product pricing, product availability, and communication of the product and brand value proposition. Through this understanding marketing practitioners are better equipped to track changes over time and predict future trends (Bruce, 2000).
When undertaking a market audit and having completed the audit of the competition and the prevailing economic conditions marketing practitioners should aggregate this information to provide an overview of the competitive nature of the industry [market attractiveness].
An overall view of the market should be included in the report to identify market segments and market share within the selected segments. The overall view may include:
- Market size, profitability, growth, market patterns, potential, profitability, life cycle issues
- Competencies, strategic imperatives, Key Success Factors
- B2B & B2C communication channels
- Structure of market channels [distribution]
- Emerging trends and developments
- Market life cycle factors
Sociocultural factors [cemSteep]
The marketing genre of consumer behaviour explores the sociocultural factors that influence how people consume. Sociocultural factors are prevailing and potential situations, cultural values and influences, demographics, education, wealth distribution, prevailing attitudes, living conditions, lifestyles. The audit of sociocultural factors would identify social pressures or changes in societal standards that may influence consumer behaviour and may result in changes to regulations facing an industry – two examples,1] today there is a distinct movement towards anti-social behaviour caused by alcohol consumption – this will influence the hospitality industry and 2] today, in Australia, there is increased scrutiny of banking practices following a government investigation.
current and potential situations, emerging technologies, opportunities or threat from disruptive technologies Changes in technology, for example, the products impacted as a result of ‘smartphones’ [e.g., decline in small digital cameras].
Environmental [cemstEep} current and potential situations, regulations and pending regulations concerning waste, energy, pollution and sustainability regulations
Ethical: some issues may be legal, however, may not reflect the values of society – sometimes the values of society may have shifted [see sociocultural factors]. Previously we have discussed the importance of values123 in the buyer decision process. Increasingly marketing practitioners are aligning themselves with ethical issues and this could be considered a form of market segmentation. Legal: current and potential situations, regulations regarding employment [e.g., equal opportunities], consumer rights, product labelling, advertising standards, anti-competitive behaviour, health and safety – etc.
current and potential political situations, degree of intervention, degree of stability [e.g., forthcoming election], tax policies, trade policies entry/exit barriers, monetary policies, prevailing attitudes of political parties and movements
Previously we discussed the product considerations that marketing practitioners take into consideration during the planning process. It should be kept in mind that there are a number of product considerations that are of importance to the business plan and the other discipline plans – this will vary regarding the nature of the product. It is unlikely that everyone in the Strategic Business Planning Group has an understanding of marketing – therefore detailing the nature of the product can assist members from other disciplines to make better informed decisions.
There is a need at this stage to work collaboratively with other members of the Strategic Business Planning Group. For example, the Chief Finance Officer can access existing sales data to determine past sales, however, they need the forecast sales from the Chief Marketing Officer to enable them to undertake their finance plan. Similarly, the Chief Finance Officer will provide an economic forecast to enable the Chief Marketing Officer to accurately forecast sales and to determine product pricing. The business planning process is therefore an iterative process that begins with the collection and analysis of macro and micro factors – the business planning process is a compound process.
Product information would include:
- Product considerations
- Product sales analysis
- Total sales X product
- Total sales X territory
- Sales by [hour/day/week/month/year/ or other suitable unit of measure e.g., weather]
- Number of transactions
- Average sell price
- Margins X product
- Cost of sales
- Product inventory [e.g., value of inventory on hand – usage rates]
- Product adoption & life cycle [Decisions that are made by customers in the early stages of a product life cycle are likely to be different from the other stages]
- Product strategy
- product line – mix, positioning, uniqueness, value proposition, augmentation, involvement, contact, product components, decision type, recipient[s], category, classification, awareness
Analysing the COMP data
Once we have conducted the marketing audit, the next task is to analyse the data. The objective is to determine the attractiveness of the market and the organisations ability to compete in the market. This information is then documented into a report that will be distributed to the CEO and the other members of the strategic business planning group [SBPG] for consideration. It is likely that the SBPG meeting will begin with a summary presentation by the Chief officers from the various disciplines. A common method of opening a SBPG meeting is with a SWOT presentation – the objective is to provide a brief overview and stimulate discussions.
Analysing the COMP data
The marketing audit report will be presented in time for attendees to study and the SWOT presentation will be presented at the beginning of the strategic business planning meeting.
The marketing audit report
This slide outlines a brief structure for the marketing audit report
The marketing audit report [cont]
This slide outlines a brief structure for the marketing audit report
The marketing audit report [cont]
This slide outlines a brief structure for the marketing audit report