Marketing Audit Approach

Marketing Audit Approach

Sushil Kumar

July 17, 2006

Marketing Audit Approach

"A marketing audit is a comprehensive, systematic examination of a company's marketing organization, strategies, tactics, objectives, and activities. A marketing audit enables senior management to discover the organization's strengths and weaknesses in relation to opportunities and threats it faces in the marketplace, and pinpoint more effective uses for the available marketing resources" (Willson, 2003).

"Half the money you spend on marketing is wasted. The trouble is: you don't know which half." (William Lever founder of Lever Brothers, 1885 now Unilever PLC) Most companies wait until they see their sales and profits decline before they launch an examination of their marketing efforts and, by this time, they are scrambling for solutions. The best time to prepare for a potential downturn in sales is before it happens, while management can still act to maintain the company's hard won gains.

The goal for this document is to outline the evaluation of current environment, target market, customers, competition, services, and marketing strategies to be used to develop a marketing audit plan for ChaiNet, a hypothetical company in the business of cyber cafй. The resources, approach, and steps of the marketing audit will also be discussed. "The marketing audit will be used as a fundamental part of the marketing planning process. It will be conducted not only at the beginning of the process, but also at a series of points during the implementation of the plan. The marketing audit will consider both internal and external influences on marketing planning, as well as a review of the plan itself (Marketing Teacher, 2006)." The marketing audit plan will be used to make the sales goals outlined in the ChaiNet business plan a reality in the year 2007.

ChaiNet, unlike a typical cafe, provides a unique forum for communication and entertainment through the medium of the Internet. ChaiNet is the answer to an increasing demand. The public wants: (1) access to the methods of communication, entertainment, and volumes of information now available on the Internet, and (2) a place to socialize and share these experiences with friends and colleagues.

More than just a great cup of coffee, ChaiNet's big flat screen Macintosh computers provide faster and easier than ever interface to the internet. The ChaiNet Cafйs are warm and traditional - with wood paneling and comfortable seating, providing a relaxed, friendly, low-pressure, atmosphere to explore the information age.

These computers also contain a number of different software programs including: word processing; fax center; Internet Relay Chat, LAN gaming, Telnet, email, and Webcams. High resolution laser printing is also available. The Cafй also provide a hot spot for wireless broadband connection for laptop users with WiFi features.

Marketing will play a vital role in the success of ChaiNet. ChaiNet must build a brand around the services it offers by heavily promoting itself through local television, radio, and print advertising. Marketing efforts are just beginning by the time a potential customer enters ChaiNet for the first time. A strong emphasis will be put on keeping customers and building brand loyalty through programs focused on staffing, experience, and customer satisfaction.

The marketing audit will begin with a meeting between the ChaiNet's senior management and the auditor. They will decide on the audit's objectives, report format, timing, and other matters. The business plans, company financials, organization charts will be reviewed. The interviews with management and staff, tours of the facilities, visits/interviews with the customers and competitors are performed to collect data for analysis. The marketing budgets, product costs, and sales numbers will be reviewed by auditor. The collected data will be used to assess the current market situation, effectiveness of the current marketing plan, market growth, internal and external environment influencing the sales numbers, future market trends, competition, and critical issues faced by ChaiNet.

The target market for ChaiNet include Students from nearby housing centers of Sonoma State University, business people from professional buildings of Redwood Business Park, seniors from nearby retirement facilities, and tourists to the wine country.

ChaiNet is faced with the exciting opportunity of being the first-mover in the local cyber-cafe market. The consistent popularity of coffee, combined with the growing interest in the Internet, has been proven to be a winning concept in other markets and will produce the same results here.

Differentiating ChaiNet from other more traditional cafes has given them the ability to effectively compete on the beverage and pastry side of the business with the already entrenched competition. Sales are brisk and in-line with projections.

The Internet services side of the business is rapidly being accepted by the local community. Students love to gather for late-night sessions, nearby seniors are getting a glimpse of what the Internet offers and local business people love to stop by for a quick bite and an email check.

Demographics wise ChaiNet's customers can be divided into two groups. The first group is familiar with the Internet and desires a progressive and inviting atmosphere where they can get out of their offices or homes for break to enjoy a great cup of coffee and Internet access. This group is made up of students from the Sonoma State and business people from nearby downtown offices and professional centers.

The second group is not as familiar with the Internet. This group is made up of seniors from the downtown retirement centers. There are three large retirement centers in the downtown area, and currently none of them offer Internet access to their residents. Seniors represent a growing segment of Internet users. They use the Internet to communicate with friends and family and they will be regular users of the ChaiNet service.

The factors, such as addiction, and historical sales data from other similar coffee houses ensure that the high demand for coffee will remain constant over the next five years. The rapid growth of the Internet and online services that has been witnessed worldwide is only the beginning of a long-lived trend towards an economy built on the infrastructure of the Internet. The potential growth of the Internet is enormous, to the point where one day, a computer terminal with an online connection will be as common and necessary as a telephone or toilet. Establishing