C. The Q3-Marketing Audit

    Roughly a hundred questions and sub-questions are divided among 15 subject headings in Part I. These are followed by about another 60 questions for a more detailed audit in Part II. A number of questions are deliberately repeated. Asking the same persons the same question twice on a list, or at different times, often leads to surprisingly different answers. Selecting key questions and using those few as a base for developing your own checklist is recommended.


    I. Fifteen point summary checklist


    II. Going deeper - cascading questions

        A - The Market & The Competition 

        B - Marketing & Sales

        C - The Product/Service


I.  Fifteen point summary checklist

1. Environment
    -    impact of the economy (recession, recovery, boom)
    -    government controls and regulations on
         -- quality
         -- pricing
         -- competitive practices
         -- advertising

2. Industry characteristics
    -    structure and (shifting) boundaries

    -    role of globalization
    -    impact of technology and innovation (paradigm shifts)

    -    role of key suppliers

    -    role of offshoring and outsourcing

4. Customers, B2C and B2B
    -    motivation of the end user
    -    buying processes
    -    customer relationship management (CRM)

         -- on-line/Internet relationship (E-Zine)

         --  role of social media
    -    cost of customer acquisition versus retention
    -    the lifetime value of a customer taking into account product life cycles

5. Product/Service characteristics
    -    performance
    -    design and packaging
    -    R & D: customers as innovation drivers
    -    Inventory
         -- optimization (just in time)
         -- physical handling, warehousing, transportation

3. Market Research
    -    primary

    -    secondary research 
    -    the sales force

    -    beta customers
    -    on-line
    -    quantitative approaches

         ---    split testing

         ---    multivariate analysis

         ---    modeling

         ---    conjoint analysis
    -   customer profiling (The Mackay Envelope Corporation 66-Question Customer Profile)

  6. Competitors
    -    based on price, features & benefits, service, quality, solution
    -    market position

         ---   relative market share
    -    direct versus indirect competition
    -    likely competitive responses

    -    on-line presence

    -    their value chains

    -    their websites and on-line presence

7. Pricing
    -    cost versus margin based
    -    elasticity and cross-elasticities
    -    discounts
    -    reflection of experience curve effects
    -    buying market share
    -    premium pricing

    -    credit terms

    -    handling of foreign exchange

    -    collection procedures

    -    slow pay and bad debt percentages
    -    auctions

8. Branding and positioning
    -    local

    -    regional

    -    national
    -    international

    -    global

    -    Internet

    -    social media

         ---   Facebook 

         ---   Twitter  

         ---   Google +    

         ---   LinkedIn    

         ---   Xing   

         ---   Other

9. Website

    - landing page

    - design

    - content

    - SEO

10. Channels
    -    wholesale

    -    retail
    -    direct mail
    -    Internet

         ---   E-bay   

         ---   Yahoo shops   

         ---  Other
    -    DRTV (QVC)
    -    channel management

11. Advertising
    -    agency and media selection
    -    generating buzz

    -    WOM (word of mouth)
    -    going viral
    -    celebrity advertising
    -    budget (how determined)
    -    advertising effectiveness, how measured
         ---   cost per lead
         ---   cost per close


12. Public Relations

    - agency and media selection

    - press releases

    - interviews

       ---   print (magazine)

       ---   radio

       ---   television

13. The sales force
    -  recruitment and training
    -  commission and salary structure
    -  distribution of excellent and sub-par performers (Pareto´s rule)

    -  separation into farmers (serving existing accounts) and hunters (acquiring new ones)
    -  solution selling techniques, such as SPIN
    -  sales competitions (the Tim Galway IBM example)

14. The marketing strategy according to:
    -    senior management - to what extent is strategy determined through a bottom up versus a top down process?
    -    mid-level managers – to what extent are they empowered  to make changes?


15. How does the marketing strategy translate to sales?
    - What impact does the sales force (in the trenches) have on the formation of strategy -- the bottom up influence?

    - How are shifts in strategy communicated to them to ensure their understanding of and commitment?


 II. Going deeper - cascading questions 

     A. The Market and the Competition

       1st level:

       1) How is the market developing?

       2) How is it segmented?

           - What is the size of each segment?

       3) What economic factors drive the development of the market?

       4) What technological and innovation factors drive it?

           - For instance, are companies chasing one another down the experience curve, as in the chip industry?

       5) How are your targeted customers segmented?

       6) What are the business drivers for your customers?

       7) What competitors make similar offers to yours?

       8) What new offers from them do you anticpate?

           - What offers could they make (even if unlikely)?

       9) What are the market entry barriers?

     10) Who might enter the market?

           - from another country?

           - from another industry?

     11) What joint ventures and strategic alliances do you have to serve the customers better?

     12) How sustainable is your competitive advantage?


       2nd level:

       1) What is the estimated one, three and five year growth of each market segment:

           - by dollar (Euro) size? 

           - by number of customers?

       2) How profitable are the different segments:

           - now?

           - next year?

           - in three years?

       3) What market share do you have in each segment?

           - What are the market share goals?

       4) What market share do your competitors have?

          - your largest competitor?

          - the top three competitors?

          - Pareto's rule: does the top 20% account for 80% of market share, and if not, for how much?

       6) What percentage of sales does your largest customer represent?

           - your largest three? 

           - Pareto's rule: does the top 20% account for 80% of sales, and if not, for how much?

       7) What customer groups are your competitors focusing on?

           - Why?

       8) What strategies are your competitors following (low cost producer, premium branding, etc.)?

       9) What distribution channels (role of E-commerce) are they using?

     10) How profitable are they?

     11) What is their likely responce to your new offerings (product and service innovation)?

     12) How sustainable are their competitive advantages?


     B. Marketing & Sales

     1st level:

     1) Who are your customers?

     2) Why do think they buy from you?

         - Why do they really buy from you (survey them)? 

     4) How are you establishing your prices (cost +, margin, penetration, premium)?

         - Why?

         - What profit levels are these associated with?

     5) What are your total sales goals:

         - by dollar (Euro)?

         - by number of customers (exsiting versus new)?

         - by transactions per customer?

     6) What are the above sales goals, broken down by market segment?

     7) In markets with a low share and market entries, how will share be increased?

     8) Which customer groups are reached through which distribution channels?


    2nd level:

     1) How are you acquiring customers?

     2) What role does WOM (word of mouth) play?

     3) What role does advertsing play:

         - print (national, trade journals)

         - radio - TV (including infomercials)

         - other "bricks and mortar" (brochures, billboards, flyers, in movie theaters and shopping malls, etc.)

         - Internet (website, PPC (pay per click), videos (YouTube), etc.

    4) What advertising agencies are you using?

        - What public relations agencies?

    5) What criteria are used to determine where an advertising campaign should be launched, with what media mix, and for which budget?

        - for "cash cow" products?

        - for "rising stars"? 

        - to rescue "dogs"?

        - for market entries?

        - for on-line campaigns?

           --- creating product specific websites

           --- video (YouTube) marketing

    6) How are you measuring advertising effectiveness?

        - cost per action (CPA)?

          --- cost per lead?

          --- cost per lead?

    7) How are you winning referrals?

    8) What does it cost to acquire a customer?

    9) What is the lifetime value of a customer?

   10) What do you do to ensure customer loyalty (e.g. frequent flyer programs)?

   11) How do you learn from customer service mistakes (e.g. the YouTube video from the dissatisfied customer, a songwriter, "United Breaks Guitars," which went viral with over 10 million views (midyear 2011)?

   12) How important is after-sales service (E-mail chat, technical forum, toll free number)?

   13) How important are credit terms?

   14) How important is a guarantee (cf. the Land's End "Guaranteed. Period.")


    3rd level:

    1) What is the sales process (AIDA: Attention, Interest, Desire, Action)?

    2) What is the sales process at competitors?

    3) How important are your "features and benefits" to your customer (e.g. many have little use for the added features of the latest Microsoft Word update).

    4) What is the differance between objective quality and what the customer perceives as quality?

    5) How important is the perceived quality versus the price?

    7) How much negotiating authority do the salesmen have?

    8) How much and what kind of training do they receive? - in sales (e.g. SPIN, solution selling) - in negotation - in time management?

    9) How are salesmen compensated? 

        - Is their a ceiling on earnings?

        - Do they receive residual earnings?

  10) How are they managed?

        - Are they properly supported so that only "warm" (no "cold") calls are made?

       - What is the role of periodic sales meetings?

        - Do they have sales quotas?

          --- If yes, how are these set?

        - What are their reporting requirements? 

        - Is their use of social media encouraged?

  11) Do they receive protected territories?

        - Or are they regularly rotated among territories (long a standard practice at IBM)?

  12) What is the role of sales competitions? 


C. The Product/Service

    1) What customer wants and needs does your offer address?

    2) What solutions are you offering?

    3) What is the product/service message (the sports car message of Ferrari, the fast food message of McDonalds)?         4) What is the product/service range (line extension)?

    5) What is its life cycle?

    6) What other product/services directly influence its purchase and usage?

        --- substitutes

        --- complimentary offers

    7) What are the prerequisites for further innovation?      




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