An audit involves a formal examination and verification of product movement by examining physical records or performing an inventory analysis. The uses of audit data include: (1) determining the size of the total market and the distribution of sales by type of outlet, region, or city, (2) assessing brand shares and competitive activity, (3) identifying shelf space allocation and inventory problems, (4) analyzing distribution problems, (5) developing sales potentials and forecasts, and (6) developing and monitoring promotional allocations based on sales volume. The advantages of audit data are that audits provide relatively accurate information on the movement of many different products at the wholesale and retail levels, and this information can be broken down by a number of important variables such as brand, type of outlets, and size of market. The disadvantages of audit data are that not all markets or operators are included in the audit, audit information may not be timely or current, and audit data cannot be linked to consumer characteristics.
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