MARKET AUDIT & CONTROL

MARKETING CONTROL Evaluating the performance of the firms marketing operations so that performance can be improved.
MARKETING CONTROL PROCESS

2 DECIDE THE ASPECT OF MARKETING OPERATIONS TO BE EVALUATED. ESTABLISH THE MANAGEMENT CRITERA OR STANDARD.

ESTABLISH THE MONOTRING MECHANISM.

5 ANALYZE THE PERFORMANCE IMPROVEMENT

COMPARE THE RESULTS OF STANDARD PERFORMANCE.

MARKETING CONTROL TOOLS 1. Profitability Analysis 2. Productivity Measures 3. Annual Plan Control a. Market Share Analysis b. Sales Analysis c. Marketing Cost Analysis 2. 20/80 Principle 3. Percentage Analysis 4. Efficiency Measures 5. Budgets 6. Network Diagrams Profitability Analysis is used to measure the profitability of various aspects of marketing operations such as product, customer, segment, trade size, order size etc. The profitability of each can be compared to desired level. Those falling under the desired level are then subjected to performance improvement. Productivity Measures enables a company to determine how effectively a given resource is performing. It can be any one of the following: a. Cost per sales call. b. Sales volume per sales call c. Cost per order. d. Number of interviews conducted per interviewer. Audit & Control, MM; Som; FoM; GEU Page 1

e. Number of inquiries per advertisement f. Number of customer complaints per product. Annual plan control purpose is to ensure that company achieves the sales, profit and goals achieved in annual plan.
GOAL SETTING

20/80 Principle means that small percentage of a firms items generally account for a large percentage of its sales volume and profit. The reverse is also true. In order to function effectively, firm need to determine sales and profit by customer, product or territory. Then marketing efforts can allocate accordingly.
PERFORMANCE MEASUREMENT

PERFORMANCE DIOAGNOSIS

CORRECTIVE ACTION

Efficiency Measures determines effectiveness of performance of resources.

sales volume (in crores) 4 3 2 1 0 0 5 10 15 20 25 sales volume (in crores)

Percentage Analysis is used to determine the effectiveness of a number of different marketing areas and analyzing the trend over time.
AN EXAMPLE OF PERCENTAGE ANALYSIS ITEM AMOUNT IN Rs & % AGE 2002 2003 2004 2005 1,000,000 1,500,000 1,800,000 2,000,000 100% 100% 100% 100% 200,000 400,000 600,000 800,000 20% 26.7% 33.3% 40% 100,000 150,000 180,000 200,000 10% 10% 10% 10% 100,000 150,000 180,000 200,000 10% 10% 10% 10% 300,000 300,000 300,000 300,000 30% 33% 27.7% 22.5% 300,000 300,000 300,000 300,000 30% 20% 17.8% 17.5%

Total Marketing Expenditures Advertising Marketing Research Packaging Physical distribution Personnel Selling

Budgets are monetary allocation to the specific marketing activities for the future period. Separate budgets for Advertising, Research, Distribution, can also be prepared.

Marketing Budgets are developed in relation to the companys objectives. Budgets are very effective control device because they guard us against the possibility of expenditures. MAKING CONTROLLING EFFECTIVE 1. Obtain inputs from individuals whose performance is to be observed. 2. Show individuals how they can benefit from control systems. 3. Emphasize on performance improvement, not poor performance. 4. Responsibility must be assigned for marketing control systems. 5. Control should be continuous and be frequent. 6. Performance standards must reflect difference according to the different territories, product, customers, etc. 7. Management by exception must be practiced. 8. Cost vs. Benefit of the marketing control system must be determined.