From Manufacturing to FMCG – An Internal Auditor’s Perspective on Marketing

Throughout my career in internal audit, I have had the opportunity to work across diverse industries—from original equipment manufacturing (OEM) to fast-moving consumer goods (FMCG). Each environment has taught me unique lessons about risk, controls, and business value. But perhaps the most eye-opening shift came when I moved from a manufacturing-heavy setting into the world of FMCG, particularly in how I began to understand and audit the marketing function.

From Operational Excellence to Customer Centricity

In the OEM sector, the business model was largely B2B and volume-driven. The company I worked for served only about 20 key global customers, yet generated over HKD 10 billion in annual revenue. In that environment, the primary business risks and internal audit concerns centered on product quality, ESG compliance, and on-time delivery. As long as we upheld our manufacturing standards and fulfilled contractual obligations, the revenue followed. Marketing was a minimal consideration—it was more about account management and operational execution than brand building or consumer engagement.

Entering FMCG: A New Lens on Value Creation

Transitioning into the FMCG space was a turning point. Suddenly, I found myself in a market landscape that was consumer-facing, brand-sensitive, and promotion-heavy. Unlike OEM, success was not just measured by quality and delivery—it was equally dependent on brand perception, campaign effectiveness, customer loyalty, and market share.

This shift required me to rethink how internal audit engages with the marketing function. It was no longer sufficient to assess vendor selection solely based on the "lowest-price" principle. I had to understand the broader marketing funnel—from awareness and consideration to conversion and loyalty—and evaluate how marketing strategies and budgets aligned with organizational objectives.

Internal Audit’s Role Across the Marketing Funnel

The marketing funnel is a conceptual model that describes the customer journey from initial brand awareness to long-term loyalty. To deliver value, Internal Audit should tailor its audit objectives and procedures to each stage:

1. Awareness (Top of the Funnel)
   Objective: Build brand visibility and reach potential customers.
   IA Focus:

   • Validate the accuracy and approval of brand messaging and media content.

   • Assess compliance with advertising regulations and digital marketing standards.

   • Review the justification and procurement of media-buying contracts and influencer partnerships.

2. Consideration (Mid-Funnel)
   Objective: Influence purchase decisions by providing value propositions.
   IA Focus:

   • Evaluate the effectiveness of CRM tools and campaign segmentation logic.

   • Ensure that data privacy and customer consent are properly managed under applicable laws (e.g., PDPO, PIPEDA).

   • Review the governance of product sampling, promotions, and partnerships for fairness and transparency.

3. Conversion (Bottom of the Funnel)
   Objective: Turn potential buyers into paying customers.
   IA Focus:

   • Assess pricing governance and discount approval workflows.

   • Review e-commerce platform controls and customer payment data security.

   • Examine the attribution model—how sales are linked to marketing actions—to ensure it is accurate and not inflated.

4. Loyalty & Advocacy (Post-Sale)
   Objective: Retain customers and convert them into brand advocates.
   IA Focus:

   • Evaluate loyalty program controls (e.g., points, redemption rules, fraud prevention).

   • Review customer feedback mechanisms and how complaints are logged, escalated, and resolved.

   • Assess metrics used for customer satisfaction and retention (e.g., NPS, churn rate), and whether corrective actions are data-driven.

By understanding the objectives and risks at each stage of the funnel, Internal Audit can provide assurance that marketing efforts are not only cost-effective but also aligned with strategic business goals, regulatory requirements, and ethical standards.

Closing Thoughts

This journey has not only expanded my technical audit skill set but also deepened my appreciation for how marketing drives business growth. It reminded me that as auditors, we must continuously adapt to industry context, learn the language of the business units we audit, and evolve beyond traditional compliance checks.