Marketing Objectives

When businesses construct their marketing strategies they will usually engage in a number of different activities. These include:
– Analysing the markets in which they operate

– Setting marketing objectives

– Selecting marketing tactics and strategies

Marketing objectives…
– These are the goals that a business is trying to achieve through its marketing.

– Marketing objectives are often more effective if they have a target and a time limit. For example, a marketing objective might be to increase market share by 10% in the next three years.

Business marketing objectives commonly focus upon the following areas…
– Growth and profitability

– Gaining and maintaining sales and market share

– Product differentiation

– Product introduction

– Product innovation

– Consumer knowledge

– Consumer satisfaction

Growth and profitablity…
– A business might want to increase sales, revenue and profit through marketing.

– It might be able to increase its revenue by selling more products, charging a higher price or launching new products. All should lead to higher profits.

– Businesses aiming to grow often attempt to create a competitive advantage over their rivals. Marketing can help a business do this.

– Examples of businesses that have grown rapidly as a result of marketing include the low-cost flight companies EasyJet and Ryanair.

A business may attempt to prevent losses and declining sales and maintain market share through its marketing..
There are reasons why a business might do this:

– When a new product is launched. New products often require marketing and promotion to break into the market and for sales to take off.

– To develop over the long term. Some products have very long life cycles such as the Mini motor car and Heinz Beans. They have sold continuously over many years as a result of marketing extension strategies designed to maintain sales.

Product differentiation…
– It is possible to differentiate products from those of competitors by changing the marketing mix, such as:

– Charging a lower or higher price

– Changing the packaging

– Changing the design and ingredients of the product

– Advertising and other forms of promotion

– Selling the products in different types of retailer

Examples might be the change in name and advertising of the sweets Opal Fruits to Starburst or the setting up of a website by BA to sell flights through the Internet.

Product introduction…
– The marketing objective of a business might be to launch new products onto the market. Market research could have indicated that this product would be successful.

– Some businesses introduce products regularly, such as new versions of computer software and games. Car producers might regularly introduce newer versions of cars to replace older models. For example, the Ford Mondeo replaced the Sierra and the Ford Focus replaced the Escort.

Product innovation….
– Some products are genuinely new and innovative. It might be that new technology has created a new product or research has found a new medicine. for example.
Consumer knowledge…
– Consumers need to know what products are available from businesses. Without awareness they may not buy products.

– Raising the awareness of products, for example, through a variety of promotion measures, can therefore be an important objective.

Consumer satisfaction…
– Consumers also need to be happy about the products they buy. Businesses which have satisfied customers are more likely to gain brand loyalty.
There is a relationship between the different marketing objectives…
– For example, in the early 1990s Adidas found its market share under threat, due to a successful promotional campaign by Nike.

– Adidas attempted to regain market share by its own marketing campaign, with the objective of differentiating the product. It promoted its trainers as having ‘street credibility.’ After the year 2000, Adidas launched a number of product ranges with a ‘retro look in attempt to increase sales and win market share.

There is also a relationship between the marketing objectives of a business and its marketing tactics…
– Marketing tactics are short-term, small-scale methods a business might use to achieve its marketing objectives.

– For example, a furniture business with the objective of increasing sales revenue after Christmas might have a 30 day offer where customers can choose a free chair with any three seater sofa they buy.

It is argued that the marketing objectives a business sets should be SMART in the same way as the overall objectives set by the business…
– They should be specific, stating exactly what is trying to be achieved.

– Able to be measured, to decide if they have been achieved, which usually involves setting targets, agreed by everyone involved.

– Realistic and able to be achieved within the constraints of the business

– And time specific, stating exactly when they should be achieved.

There are a number of internal factors that affect the marketing objectives set by a business…
– Corporate aims and objectives

– Finance

– Operational and organisational issues

– Human resources

How corporate aims and objectives affect the marketing objectives set by a business…
– A company’s marketing objectives will be influenced by the corporate aims and objectives of the business.

– For example, the aim of a DVD and video rental chain might be to become the most well known name in the UK. Its objective might be to increase sales turnover by 20% over two years to achieve this.

– So its marketing objectives could be to spend an extra £1 million on promotion to teenagers in magazines and product ‘tie-ins’ to make them more aware of the service.

How finance affects the marketing objectives set by a business…
– The availability of finance will influence what it is that a business aims to achieve.

– It may be difficult to launch new products, for example, if a business lacks funds.

– Similarly, a business with limited finances and access to only small pools of additional finance may find that some marketing objectives are beyond its realisable ambitions.

How operational and organisational issues affect the marketing objectives set by a business…
– The operation and organisation of a business may influence its marketing.

– A business which does not, for example, have a specialised marketing department might have a different marketing strategy from one that does. A business operating in many countries might market differently from one in a local or national market.

How human resources affect the marketing objectives set by a business…
– To some extent the nature of a business’s marketing objectives will reflect the human resources of that business.

– For example, a new business staffed by recent graduates may well opt for marketing methods different to a more established business with a wider range of employees.

There are a number of external factors that affect the marketing objectives set by a business…
– Competitors’ actions

– Technological change

– Market factors

How competitors’ actions affect the marketing objectives set by a business…
– The actions of competitor businesses may well affect the marketing objectives of a business.

– Take the example of a large and dominant business operating in a market where it is seeking to gain market share. In such conditions a less dominant business may seek to defend and maintain its market share.

How technological change affects the marketing objectives set by a business…
– Businesses operating in markets characterised by fast-changing technologies are likely to set themselves ambitious marketing objectives possible with large increases in sales volume.

– This is because such markets are often relatively open with new businesses able to gain large slices of market share quickly. Many web-based networking businesses such as Facebook have been able to realise ambitious marketing objectives in this way.

– By way of contrast businesses operating in relatively slow changing markets with few technological changes are more likely to set modest marketing objectives reflecting their belief that future circumstances may be likely to resemble in many ways those already experienced.

How market factors affect marketing objectives…
– One of the main market factors influencing a business’s marketing objectives is the degree of competition faced by a business.

– In a mature market with little or no room for entrants, businesses are likely to set modest marketing objectives given that they are constrained by the intensity of competition and the relatively few opportunities to grow significantly.

– The global market for cars, for example, is saturated with many producers competing. This means that car businesses cannot expect to see the kind of growth experienced by Google when they entered a new market, for Internet searches, with a few competitors.

External factors influencing marketing objectives also include a range of factors known as PESTLE factors…
– Political factors: This may include political pressure from the government, or at local level, town councils.

– Economic factors: Increases in consumer spending, falls in interest rates and low inflation can all improve the chances of a business increasing its sales and profit. An increase in the number of new businesses may reduce the market share of a company that is dominant.

– Social factors: Changes in tastes can affect spending by consumers. Fashionable products can often increase sales rapidly.

– Technological factors: New products may be created as technology develops. The internet has also helped to increase consumer awareness of products.

– Legal factors: This can include legislation from the government. For example laws might restrict the type of advertising used for a product in an attempt to differentiate it from those of rivals

– Environmental factors: These can often influence the type of product that a business produces, such as the development of businesses selling managed wood as an alternative to other wood or plastic products.

These factors are often found by carrying out a marketing audit…
– This is an analysis of the internal organisation and procedures of the business and the external factors which affect its marketing decisions.

– It will also help to identify the strengths, weaknesses, opportunities and threats faced by the business, called SWOT analysis.