Marketing can be a difficult area of operations for an operational internal audit assignment. This is partly because it is difficult to establish the effectiveness of some activities, such as advertising and branding; and some marketing activities may marketing to build a corporate image
Marketing activities differ widely between different types of business. Some entities rely heavily on direct selling by sales representatives. Others rely more heavily on advertising. All entities should be trying to find out as much information as they can about what customers are buying, and what they would like to buy.
However, marketing is much more than just selling and advertising and obtaining market research information. It is useful to think of marketing activities in terms of the ‘four Ps’:
- Product. The product or service itself is an aspect of marketing. Does it meet the needs of customers as effectively as it could? Product design and product quality have an important influence on the buying decisions of customers for many items. The ‘product’ also includes related services such as after-sales service (repairs and maintenance).
- Place. The delivery of the product to customers is an element of marketing. How does the product get to the customer? Where does the customer have to go to buy it? For example, consumer items may be sold by shops, supermarkets and general stores, or by specialised retail outlets. Some items can be purchased on the internet.
- Price. The price of the product is a key element of marketing, because customers will often make their buying decisions on the basis of price. Discounts and special price offers, for example, are a common feature of marketing consumer products in retail stores.
- Promotion. These are the activities that are probably most associated with marketing, such as market research activities, advertising, sales promotion, and direct selling.