Marketing Audit

Management

and Benefits

Group 10

Internal Audit (Initially)

• Internal Audit

• Confined to Finance & Accounting areas

• Opportunity to enhance scope – Commercial Areas

• Advantages

i. Improved operational efficiency

ii. Cost effectiveness

iii.Better Profits

Marketing Audit

• Definition (Marketing Management - Philip Kotler – 8th

Edition)

“A marketing audit is a Comprehensive, Systematic,

Independent & Periodic examination of a company’s marketing

environment, objectives, strategies & activities with a view to

determining problem areas & opportunities & recommending a

plan of action to improve the company’s marketing

performance.”

Planning Unit

ANALYSE ORGANISATION

Research Unit

• Mission

•Goals

•Culture

• Strengths

• Weakness

MAPPING ENVIRONMENT

-Political - Technological

-Economic - Cultural

ORGANISATIONAL OBJECTIVES

MARKETING AUDIT

Publics & Markets ,competition

Primary, Secondary

-Diffusion

-Buyer Behavior

Set Marketing Mission, Goals

Develop Core Marketing (STP)

Marketing Mix

Design Systems Implement

Assess Performance

Compare

Determine Performance Benchmarks

• Design Generic Products

• Managing Cost of Buying

• Channel Management

• Promotion – Mass, Personal, Selective

Auto Industry Overview

• 1897 - First Car ran on Indian Roads

• Until 1930 - Cars directly imported

• Auto industry emerged in 1940’s

• 1953 –   the Government of India and the private sector

launched efforts to create an automotive component

manufacturing industry

• Slow growth of economy from 1950 - 1980

• 1970 – 1980, the growth accelerated

• 1980 – 1985, entry of foreign players

• 1985 – 1990, entry of Maruti Udyog Ltd

• 1988 onwards - triumph of liberalization

Situation in 1990

Static Domestic market for our vehicles

Resulted in the need for Marketing Audit

Visit to 19 dealerships + other automotive dealerships & Institutional & Pvt Customers

Need for Marketing Audit

• Fierce competition

• Survival of the fittest phenomenon looms large

• Restructuring of Marketing departments as per environment

• Top management needs information for review & control purposes

• Hence, auditors need to acquire necessary skills

Methodology

Step 1 – Selection of a proper team of internal auditors.

Step 2 – Scanning the available information within the

organization.

Step 3 – Discussions with various levels of different

functions.

Step 4 – Develop questionnaires for data collection from

various branches.

Step 5 – Field Work.

Marketing – Environment Audit

A) Macro- environment

– Demographic

– Economic

– Technological

– Political

– Cultural

Year Growth (%)

1984-85 18.5

1985-86 17.7

1986-87 17.4

1987-88 23.3

1988-89 40.8

1. Markets

Rural Market Growth

B)Task Environment

% growth over previous

1987 1988 1989 1988 1989

All cars 15124315927

917740

95.3 11.38

Only Maruti 9266910650

910650

92 12.67

Other Cars 58574 64704 70850 10.47 9.5

Market Growth of Cars

% growth over previous

1987 1988 1989 1988 1989

79295 85518 95302 9.22 11.32

Growth in Tractor Market

2. Competitors (Jeeps)

Enterprise Form Generic Desire

•Maruti

(Gypsy)

•Hindustan

Motors

•Premier

Automobiles

Ltd.

•Telco

•Two wheeler

manufactures -

(Bajaj Auto, Kinetic

Honda),

•LCV( Ashok

Leyland, Japanese

LCVs)

•Any other

mode of

transportatio

n (people

and goods)

•Do not want to

buy a vehicle

Competitors (Maruti)

• Strategies used by Maruti

– Handouts for dealer circulation emphasizing on

negative features of Jeep

– Profile of potential buyers

– Merits of Gypsy over Jeep

– Dealer’s guidance – list of government employees

Publics

Employees Government

Suppliers

Distributors and dealers

Facilitators

Competitors

Customers

3. Publics

Marketing – Strategy Audit • Segmentation done on basis of product –

– CJ – Rural rich, opinion leaders, village level politicians,

farmers

– CJ 540 DP – Largely authorised/ unauthorized taxis

– MM 540 DP – Higher class rural rich, politicians,

entrepreneurs, liquor merchants etc.

– CJ 340 DP – Younger generation, farmhouse owners

• Segments clearly defined.

• Positioned itself as rugged, sturdy, multipurpose vehicle.

MM 540

CJ 340

CJ 540

CJ

Marketing – Organization Audit

Functional Efficiency

o Training to sales personnel's

o Supervision of distributors

o Strict actions against irresponsible dealers

o Lack of internal communication (marketing – dealers –

customers)

Organization Audit – Interface Efficiency

Marketing & manufacturing –

o Does not enjoy enviable status

o Uncomfortable drive & ride

o Old technology

o Higher maintenance cost

Finance

o Low resale value

o Jeep financing treated as a low priority area

o No particular finance company exclusively providing finance for

M&M

Marketing – Organization Audit

R & D

o Improving the quality of product

o Finding out the acceptance of the product after Gypsy

penetration

o Analyzing on the weaknesses of Gypsy & improvising

them as an opportunity

Marketing - Systems Audit

The marketing team should regularly interact with

customers

Communication between the marketing team and

dealers

Product development and new product ideas from

customers and dealers

Marketing - Productivity Audit

The last TV ad campaign did not generate enquiries

Entry into car market: Same perception/ New

perception

Marketing - Function Audits

Products

• CJ, CJ-540DP, MM540DP & CJ-340DP

• Attitude towards products

• To add MD-2340 engine in CJ

• XD 4.90 petrol engine in CJ- 340DP

• Some cosmetic changes

• Competitors product and strategy

Price

• Efficiency of Diesel offset by high

maintenance cost

• Price higher than LCVs

Distribution

• Current Distribution strategy

• Inefficiency of Dealers

Advertising, Sales promotion & publicity

Current advertising strategy

o Merits of Jeep over Gypsy

o Japanese monk’s testimonial ad in newspaper

o Failures/problems faced experienced by Gypsy owners.

o Change of TV campaign from usage to the reliability & elegance

of Jeep.

o Housewives as influencing factor should be considered for

advertising & promotional strategy.

• Learning from Rajdoot

Sales force

• Team to visit the place in north-east propagating the

benefits of CJ-340DP

Marketing – General Advertising Strategies

o Inclusion of Jeep as a product with major ancillary

advertisers

o Customer & employee interaction with the product –

Contest of naming the Jeep Models

o Discreet campaign emphasizing on the fact of Maruti

using foreign exchange.

Marketing – General Advertising Strategies

o Association with tyre company – MRF in

demonstrations/melas.

o Less frequency of price revisions to get a psychological

advantage over its customers.

o Strict action against irresponsible dealers.

o Direct mail campaign to government institutes.

Report highlightsProduct Image of Jeeps

Problems highlighted by the Audit

BRAND IMAGE (Rural , Urban & NE)

i. Mismatch in Image creation & message - Customer perception & product attributes

ii. Not a status symbol

iii. No suitable campaign

iv. Fashion consciousness in NE

Likely Strategies

• Frequent Communications

• Tying up with Ancillary Suppliers for advertising

• Image building product names

• Demonstration by political/opinion/ local leaders in melas &

hatts

• Proper Catalogue with product specifications

• Publicity through reviews of influential people

Problems related to Excise &Rural Financing

• High excise duty on passenger vehicles

• High vehicle cost

• No financial assistance by Company

• Low resale value

• Jeep financing treated as low priority area by banks

• Frequent Price revisions

Likely Strategies

• Position Jeep as ‘All Purpose Rural Product’

• Excise duty reduction

• Start their own vehicle financing wing

• Exchange offers

Problems in North East

• Drop in market share due to gypsy penetration

• Familiarity of mechanics with petrol engine

• State government not urging for dieselisation

• Domination of Gypsy in Calcutta & adjoining areas

• Availability of Funds

Likely Strategies

• Training / Demonstration to Local mechanics

• Expediting production of XD 4.90 Petrol engine

• Educating the people about the positives of Jeeps

• Propose dieselization to the State Govt

Problems in Dealership Network

• Territorial infringement

• Dependence on few dealers

• No concentration on -

Sale of services

Spare parts

Civilian markets

Likely Strategies

• Encourage them to concentrate on service & sale of

spare parts

• Tap civilian markets

• Extensive dealership network

Analysis

• LACK OF CONSISTENCIES-

1. Between the elements of Marketing Mix

2. Between the elements of Marketing Mix & Market

Suggestions / Recommendations

Rural Market Expansion

• Strategies to be stressed upon:

1. Customization Services

2. Free servicing

3. Exchange offers

4. Using Jeeps for Election Campaigns