Marketing Environment Audit

Marketing Environment Audit

The gathering and analysis of information concerning all the forces and institutions outside the firm which may be relevant to its present and future activities. An audit plays a vital role in imparting knowledge about the market and its environment. The audit for recording, analysing, and measuring the performance of the company’s marketing activities is called marketing audit. Marketing audit therefore is helpful for designing marketing plan. Marketing audit is part of management audit which includes marketing audit, operations audit, personnel audit and financial audit. The marketing performance of an organization is gauged in terms of its market share, profitability, and growth of sales.

The marketing effectiveness depends on the customer philosophy, marketing orientation, marketing information, strategic orientation, and operational efficiency. An effective audit should be systematic, comprehensive, independent, and periodic.

In order to carry out a marketing environment audit, organizations must understand all outside forces which could have an effect upon their operations. These outside forces can be grouped into four categories, neatly summarised by the acronym ‘PEST’. They are: Political factors; Economic factors; Social factors and Technological factors.

The basic operating conditions and business climate in every country are determined by its political system. For example, the way business can behave in an advanced western democracy is very different to the way it must behave within autocratic nations or an undeveloped third world country. Unfavorable political conditions might make it virtually impossible for a company to make money in some countries. Therefore, firms must both understand the current political environment and attempt to forecast future political developments which may affect the running of their business.

There are three aspects regarding the political environment which...