Professional Documents
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Assessment Task 2& 3
Assessment Task 2& 3
Assessment
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assessment requirements.
Procedure
1. Using the case study information provided to you (Appendix 1), complete the
following steps by providing dot-point written information to describe:
a. the purpose of the marketing audit, including details about micro and
macro factors that may affect the marketing operations
b. the scope of the marketing audit that is required
c. the methodology required to be used in conducting the audit and when the
audit could occur for the organisation
d. the participants to be involved in the conduct of the audit and what their
involvement would require (their role)
e. the main characteristics of the marketing audit and how they meet the
audit priorities for the organisation
f. the format of and the main elements to be included in the marketing audit
g. write a marketing audit plan, ensuring you present information according
to standard report format, this includes:
o title page
o introduction
o body
o conclusion
Specifications
You must provide:
● a completed marketing plan review, with written information as outlined above
Your assessor will be looking for:
● evidence that you analysed and identified the needs of the case study
● evidence that you have analysed the marketing activities of the organisation
Task 2 Conduct a Marketing Audit and Report
Procedure
Using the case study information provided to you (found in Appendix 2), complete the
following steps by providing written information to:
1. Conduct an external audit by describing in both qualitative and quantitative
terms the criteria to be used in the external marketing audit, including:
a. external macro-environmental factors that meet audit requirements
including:
i. economic factors
ii. demographic factors
iii. technological factors
iv. political/legal factors
b. external micro-environmental factors that meet audit requirements,
including:
i. market characteristics
ii. customer needs
iii. competitor factors.
N.B. Your report must compare the assumptions from the Marketing Plan with the
actual findings of your audit.
Specifications
You must provide:
● a completed marketing audit report, with written information as outlined above.
Your assessor will be looking for:
● evidence that you analysed and identified the needs of the case study
● evidence that you have analysed the marketing activities of the organisation.
Table of Content
Market Analysis
○ Large % of families.
○ Area growing at 10% per year.
○ Household income – increasing steadily.
○ Regional distribution – Graceville growing faster that the city and state at 7%.
● Geographic:
● Accessibility – The patron can gain access to the restaurant with minimal waits and can
choose the option of dine in or take out away. There is a planned ‘Park ‘n Ride’ to be
built adjacent to the property providing parking for patrons at night.
● Customer service – The patron will be impressed with the level of attention that they
receive.
● Competitive pricing – All products/services will be competitively priced relative to
comparable high-end pasta/Italian restaurants.
Above all, Sarto’s believes that quality tasting food, an exotic assortment and range of pastas,
in a family-based dine-in environment is the key to our customer’s needs and wants.
The reason for this trend is that within the last couple of years the restaurant offerings have
increased, providing customers with new choices. Restaurant patrons no longer need to accept
a limited number of options. With more choices, patrons have become more sophisticated.
This trend is intuitive as you can observe a more sophisticated restaurant patron in larger city
markets such as Sydney or Melbourne where there are more choices available.
Sarto’s strongly believe that customers are more interested in exotic taste than any other
issue. This will be why they shop with us and become loyal patrons.
2.1.5 Economy
Based on economic forecasts, Sarto’s Gourmet Pasta assume that interest rates are coming
down and that this reduction will create more disposable income and more money available
for families to eat out. In terms of available credit, Sarto’s assumes that this will not change in
the foreseeable future and will not be a threat to the potential sales. The same assumption is
made about employment levels, where Sarto’s assumes that unemployment levels remain the
same at 5.1%.
2.1.6 Political
From research carried out, Sarto’s identify that the government focus and emphasis in future
legislative direction will be about ‘work/life balance’, which Sarto’s see a positive for their
business model. Sarto’s, as a business operating in Australia, will abide by the law in all its
dealings and comply with legislation that impacts on its business activities.
2.2.1 Strengths
● Strong relationships with vendors that offer high-quality ingredients and fast/frequent
delivery schedules.
● Excellent staff who are highly skilled at food preparation.
● Great retail space that is bright, clean, and located in an upscale mall, suburban
neighbourhood, or urban retail district.
● High customer loyalty among repeat customers.
● High-quality food offerings that exceed competitors offerings in quality, creativity and
presentation.
● Ready supply of organic food in the area not like other states.
2.2.2 Weaknesses
● Sarto’s name lacks brand equity.
2.2.3 Opportunities
● Growing market with a significant percentage of the target market still not aware that
Sarto’s Gourmet Pasta exists.
● In the expansion, Sarto’s will have the ability to spread overhead over multiple revenue
centres. Sarto’s will be able to spread the management overhead costs among the
multiple stores, decreasing the fixed costs per store.
2.2.4 Threats
● Competition from local restaurants that respond to Sarto’s Gourmet Pasta’s exotic
offerings.
● A slump in the economy reducing customer’s disposable income spent on eating out.
2.3 Competition
National Competition
● Pasta Buzz: offers consumers their choice of noodles, sauces, and ingredients, allowing
the customer to assemble their dish as they wish. Food quality is average.
● Pasta Bite: has a limited selection but the dishes are assembled with high-quality
ingredients. The price point is high, but the food is quite good.
● Pasta Mia: offers pasta that is reasonably fresh, reasonably innovative and at a lower
price point. The company was sold a few years ago, and consequently the direction of
management has been stagnant lately and has resulted in excessive employee turnover.
● Verdi Pasta: has medium-priced pasta dishes that use average ingredients, no creativity,
and less than average store atmosphere. Sarto’s is not sure how this company has been
able to grow in size as their whole product is mediocre at best.
It is Sarto’s belief that the existing unwritten code of business activity, where each chain stays
within their founding geographic market place, will remain in the foreseeable future.
Local Competition
● Stella’s: This is an upscale Italian restaurant that has a limited selection of pasta dishes.
Although the selection is limited and pricey, the dishes are quite good.
● Peri Pasta: An Italian restaurant with a decent pasta selection, however quality is
inconsistent.
● Niccolo: An upscale restaurant with a large wine selection and good salads. Everything
else is mediocre at best and over-priced. Service can often be poor.
Sarto’s do not see the competitors changing their marketing strategy or product offer in the
foreseeable future.
Potential Customers
Market
Analysis Growth 2009 2010 2011 2012 2013
Individuals 6% 12,000 12,720 13,483 14,292 15,150
Take Away 10% 9,000 9,900 10,890 11,979 13,177
Family 12% 25,000 28,000 31,360 35,123 39,338
Total 9.27% 46,000 50,620 55,733 61,394 67,665
2.4 Service Offering
Sarto’s has created gourmet pastas that are differentiated and superior to competitors.
Customers can taste the quality and freshness of the product in every bite. The following are
characteristics of the product.
● Sarto’s dough for the pasta is made with Italian semolina flour.
At Sarto’s, food is not a product; the experience of dining is a service. Sarto’s prides
themselves on providing service that is on par with fine dining.
Sarto’s will ensure that all aspects that are involved in the delivery of satisfaction to the
customer will work using an integrated approach.
● Seating: 35–45.
● Shopping patterns.
● Car counts.
3.1 Mission
Sarto’s Gourmet Pasta’s mission is to provide families with the finest pasta meal and dining
experience. We exist to attract and maintain customers. When we adhere to this maxim,
everything else will fall into place. Our services will exceed the expectations of our customers.
3.5 Positioning
Sarto’s Gourmet Pasta will position itself as a reasonably priced, upscale, gourmet pasta
restaurant. Graceville consumers who appreciate high-quality food will recognise the value
and unique offerings of Sarto’s Gourmet Pasta. Patrons will include singles and families, ages
25–50.
Sarto’s Gourmet Pasta positioning will leverage their competitive edge:
● Product. The product will have the freshest ingredients including homemade pasta,
imported cheeses, organic vegetables, and top-shelf meats. The product will also be
developed to enhance presentation, everything will be aesthetically pleasing.
● Service. Santo’s will only employ experienced cooking staff who can create meals that
customers will find outstanding to the taste.
● Distribution – Sarto’s food will be distributed through a take away model where
customers can phone in their order and come to the restaurant to pick it up, come into
the restaurant, place the take out order and wait for it to be completed, or come in and
dine at the restaurant.
● Advertising and promotion – The most successful advertising will be adverts and inserts
in the BMag as well as a PR campaign of informational articles and reviews also within
the BMag. Promotions will take the form of in restaurant entertainment and ‘free meal’
giveaways. Heavy emphasis on promoting the brand and not just advertising products.
● Customer service – Sarto’s philosophy is that whatever needs to be done to make the
customer happy must occur, this investment will pay off with a fiercely loyal customer
base who is extremely vocal to their friends with referrals.
Break-even Analysis
Sales 35000 40000 45000 50000 55000
Fixed Costs 25650 25650 25650 25650 25650
Variable Costs 15050 17200 19350 21500 23650
Total Cost 40700 42850 45000 47150 49300
Profit -5700 -2850 0 2850 5700
Variable Costs 43% 43% 43% 43% 43%
Costs
Sales
Ongoing sales forecasting will be to use the services of Ready-Made Marketing who will advise
on all aspects of the marketing function that Sarto’s will be engaged with. Ready-Made
Marketing will also be given access to the marketing cost data so that they can periodically
examine and validate marketing costs in line with industry benchmarks.
Milestones
Other $0
Other $0
Total PR Budget $0
Totals $17,740
5.2 Marketing Organisation
Mario Sarto, the owner, is primarily responsible for marketing activities and has the authority
and responsibility over all company activities that affect customer’s satisfaction. This is in
addition to his other responsibilities. Ready-made marketing have been engaged to provide
marketing services as required, and some outside resources for graphic design work, and
creativity are also to be utilised.
Feedback will come from in-store feedback forms and local customer surveys
● An entry into the Graceville market of an already existing, franchised gourmet pasta
restaurant.
When you asked about new product development and forecasting sales Mario said that it was
too expensive to get market research done and so just used the accountant’s tax figures and
his own ‘gut feel’ to determine the sales forecast.
Mario’s response to your question about charging different prices for deliveries, was to say
that it just good business to charge the rich folk that lived in the gated estate more because
they could afford it.
Research reports
In trying to understand the macro factors affecting Sarto’s, Rose researched the following
reports to obtain findings on the demographic, economic, ethical, geographic, political/legal,
social/cultural, technological influences. You looked through these research reports that Rose
Ready had given you to discover the following.
Focus Group
You organised a focus group from the local community and from some of Sarto’s regular
customers. The following consensus was reached among the participants.
Group want convenience products and more healthy options.
Take away and eat at home was the preferred dining option rather than eat out.
Pasta products should be designed to be low fat. Tomato-based sauces rather than
cream.
Customers want to order via the internet and not be stressed out by the phone system
with its delays and difficult to understand accents and noise.
Customers prefer fewer flyers which they saw as ‘junk mail’, and the flyer should be
more informative about the ingredients and offer a full menu.
Some customers questioned the ethics of Sarto’s Gourmet Pasta, who charged more for
delivery into the neighbouring ‘gated estate’ than to every other home delivery
customer.
Comment ‘They may be great cooks, but they don’t know how to handle telephone
sales’.
Please note: ILSC can use third party software to detect
plagiarism
2.3.3 FINANCIAL
On the same page, its financial objectives are described as:
6.1 Comprehensive
As requested by Rose Ready, the marketing audit will cover both internal
and external environments, as well as its micro and macro factors.
Objectives, strategies, function and systems will be under the scope of this
marketing audit to better analyses the scenario in which is preventing
Sarto's from fulfilling its business goals.
6.2 Systematic
The steps to be followed are:
- Marketing Plan Review
- Search reports - compiling data from Australian Bureau of Statistics (ABS),
Australian Treasury report and IBSA World.
- One-on-one interviews with essential parties: Rose Ready (Ready-Made
Marketing), Mario Sarto (owner of Sarto's), Eric Yeung (accountant at
Sarto's) and Adriana Como (Sarto's sale and promotion staff).
- Focus group - local community and Sarto's regular customers.
6.3 Independent
As previously stated, an independent and external auditor assigned to this
marketing audit.
- Where is the store losing money? What is preventing it from achieving
steady growth?
- What are the sales numbers in total? What's generating profit? What's
generating loss?
- What are the current strategies to engage new customers? How are they
retained?
6.4 Periodic
As a way to measure the growth and evaluate the development of the
implementations that will be suggested by this audit, it is suggested that
the procedure should be periodically repeated every six months.
7. ELEMENTS
A marketing audit should start with exploring the marketplace to determine
what changes are taking place and how they may affect the business. The
audit should then examine the business’s marketing objectives and
strategies, organisation, and systems. It is also possible that an audit may
look at key functions of the business that are fundamental to its marketing
performance.
A full marketing audit should have six major elements, each of which can be
conducted as a standalone process if a full audit is not required. The six
major elements are:
7. 1.1 ENVIRONMENT
The marketing environment is defined in terms of both the macro-external
environment surrounding the relevant industry, and the micro-external
environment in which the business operates.
The macro environment consists of factors which are generally beyond the
control of the business, such as economic, demographic, technological,
political-legal and social factors. The purpose of the macro environment
audit is to assess the environment, determine key trends and evaluate their
implications for the business.
7.2 STRATEGY
The marketing strategy audit considers whether the business’ strategy is
positioned to handle both the opportunities and problems that face it. It
examines the goals and objectives of the business, then the marketing
objectives.
Questions to consider:
Are the business objectives clear, and do they lead logically into the
marketing objectives?
Are the marketing objectives stated clearly to assist marketing planning?
Can they be measured?
7.3 ORGANISATION
The marketing organisation audit looks at the effectiveness of the marketing
and sales function of the business, and the interaction between marketing
and other key functions of the business such as finance, purchasing and
manufacturing.
The structure of an organisation determines how it operates and performs,
and should present the hierarchy of roles and responsibilities required for
the business to function.
Functional efficiency examines the effectiveness of relationship and
communication between sales and marketing functions of the business.
Interface efficiency examines the interaction between marketing and the
other functions of the business, and how effectively these interactions.
7.4 SYSTEMS
The marketing systems audit examines the systems used to inform, plan
and control the marketing operation. This includes the procedures used in
systems such as sales forecasting, marketing planning, inventory planning,
order processing, and new product development.
The marketing control system incorporates the processes required to
monitor proposed plans and adjustments as necessary.
7.5 PRODUCTIVITY
The marketing productivity audit looks at key accounting data to determine
where the company is making profit. It also identifies areas where
marketing costs can be reduced, by measuring the profit contribution of
different products and services.
Questions to consider:
Profitability Analysis – What products are profitable? How do products
compare in terms of profitability?
Cost-Effectiveness Analysis – What is the advertising spending? Where is
this information available? What might be a more effective way of
effectively marketing the organisation’s products?
7.6 FUNCTION
The results of the audit processes above may indicate that an audit of an
isolated marketing function needs to be undertaken. This can include
reviewing advertising budgets and evaluating specific advertising or
promotional approaches or mediums for effectiveness.
Products
What are the buyers' knowledge and attitudes toward the company's and
competitors' product quality, features, styling, brand names, etc?
What areas of product and brand strategy need improvement?
Prices
What are the company's pricing objectives, policies, strategies and
procedures?
To what extent are the prices set on cost, demand and competitive criteria?
Do the customers see the company's prices as being in line with the value of
its offer?
What does management know about the price elasticity of demand,
experience-curve effects and competitors' prices and pricing policies?
To what extent are price policies compatible with the needs of distributors
and dealers, suppliers and government regulations?
Place (Distribution)
What are the organisation's advertising objectives?
Is there adequate market coverage and service?
How effective are distributors, dealers, manufacturers' representatives,
brokers, agents and others?
Should the company consider changing its distribution channels?
Promotion
Including advertising, sales promotion, publicity and direct marketing.
What are the organisations advertising objectives?
Are the objectives sound?
Is the right amount being spent on advertising?
Are the ad-themes and copy effective?
What do customers and the public think about the advertising?
Are the advertising media well chosen?
Is the internal advertising staff adequate?
Is the sales promotion budget adequate?
Is there effective and sufficient use of sales promotion tools such as
samples, coupons, displays and sales contests?
Is the public relations staff competent and creative?
Is the company making enough use of direct, online and database
marketing?
Sales Force
What are the sales force's objectives?
Is the sales force large enough to accomplish the company's objectives?
Is the sales force organised along the proper principles of specialisation
(territory, market, product)?
Are there enough (or to many) sales managers to guide the field sales
representatives?
Do the sales compensation level and structure provide adequate incentive
and reward?
Does the sales force show high morale, ability and effort?
Are the procedures adequate for setting quotas and evaluating
performance?
How does the company's sales force compare to competitor's sales forces?
8. REQUEST
After planning the marketing audit, and specifying all the points that we are
going to review accurately. I send to Mario Sarto and other stakeholders the
request to sign off the plans as acceptance and permission to proceed with
the audit.
Sarto’s Gourmet Past
– Task 2
BSBMKG515 – CONDUCT A MARKETING AUDIT
JULIA CAROLINA MORAES CONTRUCCI DE SOUZA
Table of Contents
1. Introduction...................................................................................... 17
2. Executive Summary..........................................................................18
3. Main body......................................................................................... 19
4. Recommendations and Conclusion...................................................21
1. Introduction
The purpose of this report is to unveil business and marketing aspects of
Sarto’s Gourmet Past that are preventing the business to reach its
objectives. To do so, this document describes and explains the findings
resulted from the audit and the marketing plan analysis.
2. Executive Summary
The report shows the comparison between the marketing plan and the updated market
research, to unveil what aspects of Sarto’s Gourmet Past current strategies are keeping the
business from succeeding.
The findings of the audit are portrayed in a table also containing what had been planned in the
marketing plan, the analysis of the issues found and its suggested solutions.
Within the methods used to investigate the business are: SWOT, PESTLE and the Five Force
analysis, comprehending both internal and external aspects as well as micro and macro
environments.
3. Main body
The table below contains the planned objectives of the marking plan, the finding of this audit and its consequences and the
recommendations suggested.
The content is divided in internal and external aspects of Sarto’s Gourmet Pasta, in which were used the PESTLE, SWOT and
Five Force analysis.
Internal - Weaknesses
Sarto's decision-making
process included the creation
of a new weekly specials
flyer without discussing or
even preparing its team for
it. In addition to a high-
unproductive way of running This, however, is not
a business, is a wasteful, advisable, given the fact that
once the restaurant is not their penetration is
prepared to sale what is minimum. On a different
being promoted, as well as perspective, Sarto's Gourmet
disrespectful to both Pasta can start a promotion
customers and staff. strategy by offering its
current clients of delivery
Other alarming point to this and take-away the specials
topic is the narrow-minded menu. Also, online marketing
persona of Mario Sarto, who is more secure and risk-free
even though having method for his particular
consulted Rose, from Ready- business.
Made Marketing, and she
advised him that flyers are
expensive and
counterproductive, decided
to invest in this particular
form of promotion
By ignoring its most lucrative It is suggested that Sarto
business, the take-away, invests in the take-away
Wrong positioning strategy Sarto wasted investments segment, in order to make
advertising to the wrong profit to refine its restaurant
target market. to the first intended market.
Maintain positive, steady Sales decrease In the whole yearly sales of It is recommended that the
growth each month 2016 was $436,000. The business focus its resources
reasons were that a lot of in its most profitable area -
Generate at least 45.000 money was destined to the take-away, which has
in sales per month
Competitors
Power of Buyers
Demographics
Graceville's population is
No change (ABS)
130,000
Economy
In addition, Mario Sarto also was reluctant to invest in strategies regarding the business
specials, its new product development and market testing, by stating that this was too
expensive and the business didn’t have the resources.
The main recommendation to this issue is for Mario Sarto to rethink its attitude towards its
own business. Strategizing with his team, working as group, listening to experts regarding
communication strategies and implementing changes on the menu, following the needs and
wants of his target market.
Another fundamental point is updating the new system of ordering for take-away. The most
profitable segment needs to be catered, so that the other segments can grow from invested
profits of the main one (take-away).
Lastly, the franchise plan needs to be perfected attending to the needs of the market, as well
as having clear and SMART objectives for the business.