Marketing Audit Implementation Criteria: Applying the Analytic Hierarchy Process (AHP) and the Decision-Making Trial and Evaluation Laboratory (DEMATEL) Methodology

Wen-Kuei Wu, Wei-Ting Dai Chaoyang University of Technology, Taiwan

Abstract: The purpose of this study is to evaluate and develop a model of marketing audit (MA) implementation criteria. This study appears to be one of the first papers to focus on the use and contribution of analytic hierarchy process (AHP) on the marketing audit implementation criteria. Based on eight practical marketing experts’ opinions and evaluations from Taiwan, we conducted an AHP decision model for assessing the priority of marketing audits criteria for Taiwan’s small and medium enterprises (SMEs). Our study consists of two phases. In the first phase, we investigate the potential criteria of marketing audits implementation from literature. Then, in the second phase, we created an AHP model to determine the relative priorities of auditing criteria by accommodating both the objective and subjective judgments of the eight practical experts participating in this study. Our result indicates that the marketing strategy related standards and auditing criteria appear to be the top priority while implementing MA and the following are marketing environments, marketing organization, marketing system, marketing productivities and marketing functions audits. In addition, from the perspective of cause-effect relationship, the marketing environments, organization, strategy and system audits appear to be the causes of the marketing function and productivity audits. This study also proposes some suggestions for the decision making of practical hierarchical marketing audit criteria.

Keywords: Marketing Audit, Analytic Hierarchy Process, Implementation Criteria

As a comprehensive review of a Abela, and Ambler 2006). Thus, it is company’s market environment, the important to be clear how a MA should be marketing audit could be the useful tools implemented to benefit the SMEs’ that identifies any inadequacies in overall marketing performance. marketing structures. It also identifies Marketing audit requires a systematic operational strengths and weaknesses and and impartial review of a company’s recommends the necessary changes to the recent and current operations and its company’s marketing strategies. If the market environment (Zikmund and marketing audits are done correctly, they d’Amico, 2000). The scope of audit will provide management with a useful depends on the cost involved, the target and analytical tool for evaluating, markets served and its market measuring, motivating and revising environment (Mylonakis, 2003). Thus, it management actions (Mylonakis, 2003). is necessary to explore what MA However, the marketing audit is currently implementation criteria should be selected still ignored by Taiwanese SMEs due to and the priority of implementation that many marketing managers conceive according to the SMEs’ limitations. Due the marketing audits just as a profusion of to the complexity of the existing checklists from marketing textbooks and marketing auditing criteria, the priorities most of them appears to be based on the of the various auditing criteria need to be Western businesses’ perspectives or large identified and simplified. enterprises’ perspectives. The benefits of using the marketing audit and implementing its recommendations lie in perceptions of its ability to influence a Research Background change in business performance (Clark, The marketing audit was described as marketing (Capella and Seckely, 1978), a systematic, critical, and impartial review information availability (Rothe et al., of the total marketing operation; of the 1997), insufficient communication with basic objectives and policies of the top managers to ensure access and operation and assumptions that underlie understanding of information (Bonoma, them; and the methods, procedures, 1985). Meanwhile, the marketing audit is personnel, and organization employed to also criticized for disconnecting from the implement the policies and achieve the overall control system (Brownlie, 1993); objectives (Shuchman, 1959). Kotler et al. periodic rather than ongoing assessments (1977) refined the marketing audit of marketing performance (Kotler et al., concept into a comprehensive, systematic, 1977); and application with the objective independent, and periodic examination of of defining problems but not necessarily a company’s or SBU’s strategies, providing insights into solutions (Wilson, objectives, activities, and environment, 1980). As a result, the used approaches of designed to reveal problems and marketing audit have been primarily opportunities, and to recommend actions qualitative checklists, with little empirical that would improve the company’s validation (Rothe et al., 1997; Morgan et marketing performance. The refined audit al., 2002) and useful implementation rules model identified six proposed components or criteria that a marketer could reference. of the marketing audit, and advocated the use of a standard set of procedures. Kotler Research Methodology et al.’s six proposed marketing audit To overcome addressed criteria components included: (1) the market complexity, incorporate practical environment audit, consisting of analyses marketing expertise, and analyze the of both the macro environment and the weight of marketing auditing criteria, we task environment; (2) the marketing adopted the AHP technique. The AHP strategy audit, to assess the consistency of technique was developed by Saaty. It is a marketing strategy with environmental powerful tool for solving complex opportunities and threats; (3) the decision problems regarding hierarchical marketing organization audit, designed to levels where each level represents a set of assess the interactions between the criteria relative to each sub-problem marketing and the sales organization; (4) (Saaty, 1996; Sambasivan & Fei, 2008). the marketing systems audit, to evaluate The AHP technique consists of the procedures used to obtain information, following four steps: (1) Structure the plan and control marketing operations; (5) problem and model building; (2) Collect the marketing productivity audit, data through pair-wise comparisons and assessing accounting data to determine measurements; (3) Calculate normalized optimal sources of profits, as well as priority weights of individual factors; (4) potential cost savings; and (6) the Analyze the priority weights and derive marketing function audit, reviewing key solutions to the problem. marketing functions based primarily on Given that the marketing auditing prior audit findings. The first two criteria is also the combination of components—market environment audit composite and intertwined criteria, the and marketing strategy audit refer to the decision-Making trial and evaluation processes of auditing for marketing laboratory (DEMATEL) methodology planning. The rest components concern was also employed to examine the auditing for marketing execution. interrelationships between these auditing However, from conceptual and criteria. The DEMATEL technique has practical perspectives, the marketing audit been adopt by many researchers to solve has many significant problems including many complex problems in scientific, the lack of suitably qualified independent political and economic by considering auditors (Kotler et al.,1977), gaining experts’ attitudes (Gabus and Fontela, management cooperation from within 1972; Gabus and Fontela, 1973), not just because of its effectiveness of verifying implemented, but they are also highly interdependence among correlated correlated to each other and influenced features but also its capability to better by the other audit dimensions. Figure understand for identifying of practical 2 illustrates the relations between the solutions (Elham, Zulkiflle and Shahryar, marketing audit dimensions. 2012). The DFEMATEL technique also consists six main steps: (1) Making the direct-influenced matrix; (2) Calculating Conclusion and suggestions the direct-influenced matrix The results indicate that the normalization; (3) Achieving the total- marketing strategy related auditing criteria relation matrix; (4) Producing a causal appear to be the top priority while diagram; (5) Obtaining the inner implementing MA and the following are dependence matrix and impact marketing environments, marketing relationship map; (6) Obtaining the inner organization, marketing system, dependence matrix. marketing productivities and marketing functions audits, suggesting the audits for Results and discussion marketing planning dimensions, such as As shown in Figure 1, the first level strategy audits, environment audits, is the goal of the MA implementation. organization and system audit are The second level is the type of standard. perceived as highly important MA The third level includes the MA implementation dimensions by the implementation criteria. The purpose of practical experts. Thus, the marketing the AHP technique was to determine the planning related audits criteria seems to priority of individual MA implementation be the most critical ones to be designed criteria. We also conducted a series of and implemented. interviews with eight practical experts to In addition, from the result of finalize the AHP model and the criteria in DEMATEL method, the marketing the model. Therefore we dropped any function and productivity audits appear to criterion which was considered to be less highly benefit the other marketing audit implemented among SMEs to simplify the criteria dimensions, indicating while important auditing criteria. The selected implementing the marketing audits, the criteria still covered major dimensions of marketing function and productivity MA in literature. As indicated in Figure1, audits ought to be implemented in the priority weights at level one reveal advance so that the implementation of that the marketing strategy audits (priority other audit dimensions will be improved. weight=0.302) is found to be the most Even though the marketing planning important audits dimensions. related audits criteria are perceived as the most important ones to be implemented, Using DEMATEL method, the the marketing function and productivity audits deserve to be implemented in interdependences among the advance due to the data from these audits marketing audit dimensions were done might help the marketing planning on the basis of the perception of eight implementation and reveal some useful field-related and industry practitioners. information. Then the relative weights of Besides, the marketing environments, dimensions are calculated within the organization, strategy and system related developed model using the above marketing audits appear to be the causes mentioned methods. Our results of the marketing function and productivity showed that the marketing audits, indicating that practical marketing productivity and function audit managers still pay more attention to dimensions appear to be the most implementing marketing audit for strategic planning and market conduct. beneficial audit dimensions to be Our findings suggest that marketing Morgan, N. A., Clark, B. H., & Gooner, audits including marketing function and R. 2002. Marketing productivity, productivity audits are beneficial. 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The Marketing Audit Comes of Age’, Sloan Management Review, 18 (Winter), 25–44. a.The numbers in in parenthesis (i.e. 0.259 and 2) indicates that the weight=0.259 and the ranking=2. Figure 1 Proposed AHP model for MA implementation

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