What are the 4 basic characteristics of Marketing Audit?

In its fullest form and concept, a marketing audit has four basic characteristics. The first and most important is that it is broad rather than narrow in focus. The term “marketing audit” should be reserved for a horizontal (or comprehensive) audit covering the company’s marketing environment, objectives, strategies, organization, and systems. In contrast a vertical (or in-depth) audit occurs when management decides to take a deep look into some key marketing function, such as sales force management. A vertical audit should properly be called by the function that is being audited, such as a sales force audit, an advertising audit, or a pricing audit.

A second characteristic feature of a marketing audit is that it is conducted by someone who
is independent of the operation that is being evaluated. There is some loose talk about self-audits, where a manager follows a checklist of questions concerning his own operation to make sure that he is touching all the bases. Most experts would agree, however, that the self-audit, while it is always a useful step that a manager should take, does not constitute a bona fide (certified) audit because it lacks objectivity and independence. Independence can be achieved in two ways. The audit could be an inside audit conducted by a person or group inside the company but outside of the operation being evaluated. Or it could be an outside audit conducted by a management consulting company or practitioner.

The third characteristic of a marketing audit is that it is systematic. The marketing auditor who decides to interview people inside and outside the company at random, asking questions as they occur to him, is a “visceral” auditor without a method. This does not mean that he will not come up with very useful findings and recommendations; he may be very insightful. However, the effectiveness of the marketing audit will normally increase to the extent that it incorporates an orderly sequence of diagnostic steps, such as there are in the conduct of a public accounting audit.

A final characteristic that is less intrinsic to a marketing audit but nevertheless desirable is that it should be conducted periodically. Typically, evaluations of company marketing efforts are commissioned when sales have turned down sharply, sales force morale has fallen, or other problems have occurred at the company. The fact is, however, that companies are thrown into a crisis partly because they have failed to review their assumptions and to change them during good times. A marketing audit conducted when things are going well can often help make a good situation even better and also indicate changes needed to prevent things from turning sour.

The above ideas on a marketing audit can be brought together into a single definition:

A marketing audit is a comprehensive, systematic, independent, and periodic examination of a company’s, -- business unit’s—marketing environment, objectives, strategies, and activities with a view of determining problem areas and opportunities and recommending a plan of action to improve the company’s marketing performance.

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