The marketing audit is an essential part of the strategic evaluation.
Your strategic evaluation or critical assessment, developed through a marketing audit is the most important part of your marketing plan. A well thought out strategic evaluation framework and strategic evaluation tools can help with your strategic marketing evaluation.
Marketing strategy must be responsive to changing conditions. After implementing, evaluation and control are essential to keep the marketing strategy on target.
Strategic evaluation requires obtaining relevant information for gauging performance, analyzing it, and then taking the actions to stay on track. The marketing executive is continually monitoring performance, and often they must revise their strategies to adjust to changing conditions.
Strategic evaluation, the last stage in the marketing strategy process is really the starting point. Strategic marketing planning requires information from ongoing monitoring and performance evaluation.
Strategy evaluation is as critical as strategy creation because it sheds light on the efficiency and effectiveness of the overall plans in achieving the desired business outcomes.
The managers can also assess the suitability of your current strategy in today’s changing world with socio-economic, political, and technological innovations. Strategic evaluation is the final phase of strategic management.
What is a strategic evaluation?
Strategy evaluation implies collecting information about how well the strategic plan is proceeding. Strategic Evaluation is defined as the process of determining the effectiveness of a given strategy in achieving the organizational objectives and taking corrective action wherever required. Sometimes called a gap analysis.
The significance of strategy evaluation lies in its capacity to co-ordinate the task performed by managers, groups, and departments through control of performance. Strategic evaluation is vital because of numerous factors such as:
- Developing inputs for new strategic planning
- Feedback, appraisal, and reward
- Development of the strategic management process
- Assessing the validity of the strategic choice
Discussions of strategic evaluation are often delayed until now. First, define the strategic areas that require an evaluation and to identify the kinds of information needed by the marketing leader for assessing the marketing performance.
The Marketing Evaluation Process
An ongoing strategy evaluation program is essential to keep marketing performance on track with corrective actions. This activity consumes a high portion of the marketing executive’s time and energy. Exhibit 1 shows the major strategic evaluation activities that occur in many organizations.
The marketing evaluation is used to:
- Find new opportunities or avoid threats
- Key performance in line with management expectation
- Solve specific problems that exist
Let me give you an example. The effectiveness of marketing mix components may decline if the buyer’s preferences change in competition increases. Marketing management must adjust the positioning strategy to counter competitive threats.
The major steps in establishing a strategic evaluation program are shown in Exhibit 2.
Strategic and short-term marketing plans establish the direction and guidelines for the evaluation and control process. First, a strategic marketing audit should be conducted.
Next, strategic performance metrics and measurements are determined. Next, these are followed by the analysis of evaluation and control information and analyzing variance.
Actions are taken to pursue opportunities to avoid threats, keep performance on the track, or solve a problem.
The Strategic Marketing Audit
The marketing audit is useful for a strategic evaluation program. It is established for a business in which there has been no previous formal strategic marketing planning and evaluation program.
The strategic evaluation compares results with expectations. It is necessary to lay some groundwork before setting up a tracking program. The starting point is the strategic marketing audit.
This complete review and assessment of marketing operations are similar to the situation analysis I’ve discussed in the past posts. However, the marketing audit goes beyond customer and competitive analysis to include all aspects of the marketing operations.
The audit is larger in scope than the situation analysis and incorporates a more complete review of the marketing strategy. The marketing audit can be used to initiate a formal strategic marketing planning program and then repeated on a periodic basis.
Typically, the situation analysis is part of the annual updating of the strategic plans. The strategic marketing auditing intervals may range from annually and up to 3 years. This typically depends on the performance of the marketing organization and its programs.
A guide to conducting strategic marketing here. The marketing audit can be expanded and adapted to meet the needs of a particular company.
For example, if indirect channels of distribution are not used, the section in the marketing audit will require some adjustments.
Moreover, if the sales force is a major part of the marketing program, then a section would be added to include aspects of the sales force strategy.
The items included in the audit correspond to the strategic marketing plan because the main purpose of the audit is to appraise the effectiveness of strategic marketing operations.
The answers to the audit question should be incorporated into the design of the strategic tracking program.
The Process of Strategic Evaluation and Conducting the Audit
Opinions are mixed on this issue. Some say use internal personnel and while others recommend outside consultants. The combination approach has advantages.
Objectivity and professional expertise are essential and selecting an individual or team to plan and conduct the audit.
Planning the Audit
Deciding on the size and scope of the company, proper attention should be given to planning the areas to be audited.
Defining the scope of the audit operations, scheduling activities, coordination of participation, and the desired results also need to be defined.
Auditing cost and expected benefits should be estimated and priorities established regarding various aspects of the audit program.
Using the Findings with Your Strategic Evaluation
The results of the strategic marketing audit should improve strategic performance. Opportunities and problems that are identified should be incorporated into the strategic marketing plan.
There are other reasons for conducting a strategic marketing audit. Organizational changes such as corporate restructuring may require a complete review of strategic marketing operations.
Major shifts and business involvement such as entry into new product and market areas or acquisitions may require strategic marketing audits.
Is my recommendation that you perform a marketing audit at least once a year. Not only will this identify opportunities but also will also reveal some blind spots that you may have causing marketing issues.
Performance Criteria and Identification Needs
The next stage in the evaluation and control process of selecting performance criterion measurements for monitoring performance. The criteria and measures identify the information needed for marketing control activities.
Selecting Performance Criteria and Measures
As marketing plans are developed, performance criteria should be selected for use in monitoring strategic performance. Specifying the information needed for marketing decision-making is important and requires management’s attention.
In the past, some marketing executives could develop and manage successful marketing strategies by relying on intuition, judgment, and experience.
Successful marketing leaders realize that combining judgment and experience with information and a decision support system greatly improved their marketing performance.
Objectives indicate the results that are desired and they also serve as a basis for evaluating a marketing strategy success. Objectives create standards of performance. Information on progress towards the objectives can be combined on a continuing basis.
Moreover, marketing management may require other kinds of information for use and their performance evaluation.
Some of this information will be incorporated into regular tracking activities. Other information is obtained as the need for first arises, such as a special study of consumer attitudes and opinions.
Determining Information Business and Marketing Needs
Due to the cost of acquiring, processing, and analyzing information, the potential benefits of needed information must be compared to cost.
The marketing information falls into two categories:
- Information regularly supplied to marketing management from internal and external sources
- Information obtained as needed for a particular problem or situation
Examples of the former our sales and cost analysis, market share measurements, and customer satisfaction surveys.
Information from the latter category includes new product concept tests, brand preference studies, and studies of advertising effectiveness.
Several types of information are used by marketing management as indicated in Exhibit 3.
Information for strategic marketing planning and evaluation can be obtained by:
- The internal information system is the backbone of any strategic evaluation program. These marketing automation systems may consist of primarily sales and cost reports. But with technology today, such as Google Analytics or Infusionsoft, it is easy to collect, manage, and analyze marketing information.
- Marketing executives may require special research studies that included more types of information shown in exhibit 4.
- The company’s strategic intelligence system is concerned with monitoring and forecasting internal, uncontrollable factors that influence the companies product markets. These efforts range from formal information activities to informal surveillance of the marketing environment.
If you haven’t dived into Google’s Data Studio, you are missing a great performance evaluation and tracking platform.
There are several ways of analyzing marketing information. This is shown on the right-hand side of Exhibit 4. Computers and SaaS software models have lower the cost of processing information, leading to the much greater use of statistical analysis and models.
Wrap Up for Strategic Evaluation
Your marketing control is a natural sequel to marketing planning. But before the marketing audit should be used for a marketing strategic evaluation.
Companies that discover marketing weaknesses should undertake a more thorough study of their marketing activities and operations.
When was the last time you did a strategic marketing audit?
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What is the strategic evaluation?
Strategic evaluation is the assessment process that provides managers with performance information about programs, projects, activities designed to meet business goals and objectives.
Why should I do a strategic evaluation?
Strategic evaluation is crucial because it provides your business with an opportunity to reflect on your performance relative to your goals.
What is a marketing evaluation?
Marketing Evaluation refers to the comprehensive, systematic, analysis, evaluation and interpretation of the business marketing environment, both internal and external, its goals, objectives, and strategies.
Why should I do a marketing strategic evaluation?
A thorough marketing evaluation provides a benchmark for monitoring future marketing activity and highlights recommendations to improve the efficiency and performance of your company’s marketing activity. A company reviewing its business strategy uses the marketing evaluation too.