Assessing the marketing and business capability of small to medium sized businesses (SMEs) - Assignment Example

? Assessing the marketing and business capability of small to medium sized businesses (SMEs) Table of Contents Table of Contents 2 Introduction 3 Objective of the study 4 Marketing and business capability gap 5 Complexity Sources 5 Barriers to adapting various approaches 5 Importance of Diagnostic Audit 6 Marketing Audit and SME toolkit 6 Marketing Audit 7 Marketing planning and auditing tool for SMEs 8 Findings 9 Recommendations 10 Conclusion 11 References 12 Introduction The role of SMEs in social and economical development of developed and developing countries is well established. The small and medium scale industry plays a major role in resource utilization, employment creation, and income generation. Moreover, countries’ economical factors like GDP, per capita income are well dependent on the development of the SMEs. The growth of SMEs is important in order to achieve the national objectives like growth with inclusion and equity. The government of all the developing and developed countries is motivating the small and medium scale industry to get the economic growth of country. Marketing and business development process actually helps the company anticipate, identify and satisfy the customer’s requirement quite profitably (Proctor, 2000, p.42). Moreover, marketing is known as the combination of promotion, publicity, advertisements with respect to specific product or services. In order to be a success, the organizations used to make a required marketing budget considering that specific product. The marketing budget helps the organizations keep the record of all the costs related to the marketing of products and services. It helps compare the measuring performance. Now, in order to measure performance, marketing audit and various marketing tools are being implemented. The adoption of the marketing audit process will help the company in several aspects as it systematically, comprehensively, independently, and periodically examines the objectives, marketing environment, activities and strategies by identifying the problem areas, recommendation plan and the opportunities to improve the marketing performance of organization’s business unit. The marketing audit examines the intelligence resources for accuracy, adequacy and regency. For the purpose of effective dissemination process, the marketing audit is used to be implemented. Diagnostic audit is one of the important audit tools that examine the marketing operation of a specific business unit. Objective of the study The study has provided the backdrop for the crystal clear review of the marketing components and activities of the companies under the small and medium scale enterprise. The study has been conducted considering three companies such as Jain Estates, Multisoft Systems and Infinity Informatics. Multisoft Systems is an India-based software development company listed under growing SMEs in India. Infinity Informatics is an information technology products development company situated in Bangalore. Jain Estates is one of the emerging real estate company listed under SMEs list in India. These three small and medium scale enterprises are increasing their market reputation slowly and gradually. The major objective of the study is to review or assess the marketing and business capabilities for these small and medium-scale enterprises. In order to uncover the study, the following objectives can be set for the purpose of research work. Determining and closing the marketing and business capability gap. Implementation of marketing audit and toolkits in order to betterment the SMEs business and marketing capabilities. Importance of the Diagnostic audit to measure the marketing performances of the three companies. Elaborating the findings of thorough analysis and recommendation plan for the problem statements. In order to draw a decision, the study needs a conclusion whether the marketing audit is effective or not in terms of the business practices of the three small and medium-scale enterprises. Marketing and business capability gap The gap between the capacity of marketing organizations and the accelerating complexity of markets is increasing day by day. The companies are trying to narrow the marketing capability gap in order to gain advantages from the other slow moving competitor within the industry. It has been notified that day by day the market environment is changing as the demand of customers is increasing. As an example, in the introduction phase of the wireless carrier there were hardly three different segments. Nowadays there are more than twenty market segments of the related product or service. The number of distribution channels is increasing as the product range is increasing day by day. The small and medium-scale enterprises face the problem of the widened marketing capability gap as the owners of those enterprises are less knowledgeable to conduct a marketing budget and marketing audit. Complexity Sources The forces of market segment and the drastic market environment can be evidenced in many SMEs. As the introduction of various products and similar services is widening with every passing day, the marketing and business capability gap is rapidly increasing. Moreover, different segmentation of various products has heightened the complexity level of the business practices and capabilities. Therefore, it is becoming difficult to narrow the capability gaps. Barriers to adapting various approaches Due to various issues like technological disruption, small and medium scale enterprises are failing to adopt the appropriate and profitable approaches. Previous path dependency, structural insularity, inertia, and complacency are the other issues that are affecting the small and medium-scale enterprises to narrow the business capability gaps. The widened capability gaps and barriers of adopting the capability approaches are affecting the small and medium-scale enterprises badly. Therefore, the small and medium scale industry is failing to increase their core competency (Day, 2011, p.183-185). Importance of Diagnostic Audit In order to narrow the diagnosing gap of marketing and business capabilities, diagnostic audit is being implemented. Since 1999, most of the leading companies including the SMEs have implemented the diagnostic audit tool in order to carry out the risk assessment for stress. Diagnostic audit is one of the marketing audit tools which assess the risk factors of a business performance. The risk assessment is used to measure the risk factors’ affects on the employees. There are all total six risk factors, which can be identified as follows: control, support, demand, relationship, role and change. Moreover, the diagnostic audit will help the small and medium scale industries create the benchmarking within the industry. Diagnostic audit creates several advantages for the SMEs in order to increase future performances. The marketing audit tool helps identify the impacts or affects of internal and external issues in workplace. The diagnostic marketing tool helps the SMEs set up their own benchmark within the industry. Moreover, it provides a huge number of statistical analyses that help understand and frame the problems relating to business performances of SMEs, and it is the most easily understood format to assess the business performance. Marketing Audit and SME toolkit In order to measure the marketing budget estimation and performance of the SMEs, the marketing audit and some appropriate tools are used. Marketing Audit The marketing audit was introduced in order to assess the business and marketing capability of various companies. To conduct the marketing audit effectively, either an internal audit department or an external outside consultant can be appointed to do the auditing. Every company needs to review their marketing performances in order to ensure that the company maintains in line with the emerging opportunities, threats and other environmental changes. Data collection is the most critical aspect of conducting a marketing audit. The appointed marketing auditor should frame the findings of problems while auditing. There are several benefits of implementing and conducting marketing audit, which are listed below: Marketing audit makes the companies change the business performances, and it increases the core competency and inner ability of every company. Marketing audit discloses the inadequate business performance of companies and reflects what should be done and what has not been done to improve future performances. Effective marketing audit reminds about the organization objectives in order to rectify the issues and problem statements linked to business performances. During the business practices, companies learn to not repeat the previous inadequate practices found by the marketing audit. In terms of small and medium scale industries, the marketing audit helps prepare a flow chart about the sales and marketing of products and services. Marketing audit improves the sales and marketing efficiency of a company year after year. The adoption of marketing audit creates a competitive benchmark of a specific company within the industry. Marketing audit provides crystal clear view in order to improve the business performance. Marketing planning and auditing tool for SMEs In order to manage the business performance of small and medium scale enterprises different types of marketing planning and auditing tool can be implemented. The marketing and external auditing tools for SMEs help provide a basic framework that will help the companies assess and analyze the marketing and business performance of a company. The major objective of the external marketing auditing tools is to find out and frame the detail of risk management and business performances of a specific business unit. Moreover, it assists the small and medium scale enterprises to gather the business information which is required for banks in order to provide awareness about the corporate governance in SMEs. The external auditing and marketing planning toolkit for the SMEs is divided into two major segments which are described below. Business strategy and Target Before implementing the assessment tools, the SMEs need to frame the business strategies that include the business mission, vision and objectives. Moreover, the business strategy will also include by the targets that will help the SMEs to achieve the business objectives. The business objectives should consider a SME to self-assess the critical success factor. There are some simple guidelines which are followed to report and monitor the achievement with respect to the business objectives. In this segment, the shareholder objective, business objective and the management objective should be discussed properly. After the explanation of every objective, rechecking and updating the preset objectives will help the SMEs in order to stabilize the business against the rapid changes of business environment and performance. Competitive business market and marketing assessment Increasing competition within the SME industry is creating uncertainty about the products or services in a company. The external auditing and marketing planning tool will help provide solution to fulfill the business objectives and get the advantages like customer attractiveness, competition attractiveness, supplier attractiveness and, finally, the market dynamics attractiveness. These advantages will help the SMEs increase the ranking of their specific products and services. External auditing and marketing planning toolkit will help the SMEs assess the business and marketing capability. The factors like the number of potential customers, significant cost advantages, customer loyalty, number of suppliers, switching suppliers, information and knowledge about the competitors and threat of substitute, and attractive market dynamics can be assessed and identified by the implementation of internal auditing and marketing planning tools. Findings Since last two decades, the SMEs have suffered because of the inadequate business strategies and lack of advanced technologies and business audit. So the companies were affected badly, and lack of motivation factor has forced many organizations to close down business practices. Moreover, the inadequate government policies and legislature created depression in the business owner’s mind. The reason of failure was lack of assessing the business and marketing capabilities. The introduction and implementation of several marketing audit tools has supported these small and medium scale enterprises enormously. The effective marketing audit evaluates the framework of business performances. After knowing the issues and problem statements, companies are confidently establishing the business strategies and objectives; according to the marketing budget, the companies are effectively performing their marketing and sales activities. The major finding of the study is that the business owners of small and medium scale enterprises are more or less unaware of the adoption of marketing audit. In several developed and developing countries, government is trying to make them aware of it as it is a potential industry, and it contributes enormously to countries’ economical development. Recommendations Small and medium, scale industry is growing day by day, and, most importantly, the industry is contributing a major part to countries’ economic development. It is the most potential industry that needs to be carefully handled. In order to improve the business performance in this rapidly changing competitive business environment, the SMEs should adopt the marketing auditing in their business. It is necessary as it identifies and rectifies the problems in business practices. The marketing audit efficiently assesses the business performance of a company. The owners of SMEs need to learn and implement the audit for the betterment of their business practices. The government should organize some events or programs related to the awareness and importance of the marketing audit considering the SMEs as the SMEs significantly contribute to countries’ economical development. The SMEs owner can be benefited by such awareness programs. Moreover, it is necessary that small and medium-scale enterprises appoint an external market auditor due to the small size of industry. In order to evaluate marketing planning and performances and establishment of improved and integrated business strategy, the marketing auditor is need to be appointed in a SME. Conclusion Without effective assessment of previous business performance, SMEs cannot rectify and improve their business performance in the near future. The above study has clearly stated the potential of small and medium-scale enterprises. Moreover, it is feasible from the research work that effective marketing audit will help structure the marketing budget for sales and marketing activities of specific products and services. As the marketing audit finds the problems in business performance, the adoption of the marketing audit and application of the auditing and marketing planning tool will help measure the business performance of SMEs. The implementation of diagnostic marketing audit tool will help narrow the marketing and business capability gap. This will help the SMEs to change their strategies according to the rapid changes of competitive business environment. From the above study, it can be concluded that in order to increase the core competency and betterment of business performance, the small and medium-scale enterprises should implement the external marketing audit tool by appointing an outside market auditor as the market for SMEs is both competitive and potential enough. References Day, G., 2011. Closing the Marketing Capabilities Gap. [pdf]. Available at: . [Accessed on February 8, 2013]. Proctor, T., 2000. Strategic Marketing: An Introduction. Philadelphia: Psychology Press. Read More