What is an audit? Discuss the uses, advantages, and disadvantages of audits.
Audit: A data collection process derived form physical record or inventory analysis. Data are collected personally by the researcher or by representatives of the researcher, and the data are based upon counts, usually of physical objects.
Uses: (1) Determine market size and share for both categories and brands by type of outlet, region, or city; (2) assess competitive activity; (3) identify distribution problems, including shelf-space allocation and inventory issues; (4) develop sales potentials and forecasts; and (5) develop and monitor promotional allocations based on sales volume.
(+) Relatively accurate information on the movement of many products at the wholesale and retail levels. Information can be broken down by a number of important variables, such as brand, type of outlet, and size of market.
(-) Limited retail coverage and delay associated with compiling and reporting inventory data.