Setting Marketing Objectives

Introduction

Marketing management: decision-makers in a business who identify, anticipate, target and satisfy customer needs profitably.

  1. Identify: by using marketing research, plus their experience.
  2. Anticipate: by understanding data and current trends, and then predicting future trends.
  3. Target: by planning marketing campaigns.
  4. Satisfy: by implementing the plans successfully to sell products.
  5. Profitably: by generating revenue greater than the costs involved.

Calculations

To make calculations a business might need to estimate:

  1. Market size: the potential number of customers in the market.
  2. Competition sales: who are the closest rivals.

AQA calculations for this section

  1. Market size volume is the quantity of goods and services produced in a particular market over a period of time, usually one year.
  2. Market size value is the total sales revenue generated from selling all of the goods and services produced in a particular market over a period of time, usually one year.
  3. Sales volume is the quantity of goods and services produced by a particular business over a period of time, usually one year.
  4. Sales value is the total sales revenue of a particular business over a period of time, usually one year.

These are the calculations to be made:

Setting Marketing Objectives, figure 1

Setting Marketing Objectives, figure 2

Setting Marketing Objectives, figure 3

Bear in mind that the difference between years X-1 and X could be negative (e.g. between 2016 and 2017), thus showing a decrease.

In 2015 a business has sales of £45,000. In 2016, it’s sales are £63,000. What is its sales growth?
0.4
What are the main external influences on marketing objectives?
Competition customer legislation

The Value of Marketing Objectives

Objectives are long-term targets for a business.

Targets allow a business to plan their resources, provide a checkpoint for progress and a focus for on-going decisions.

Marketing objectives feed into the business’s corporate objectives. For example, most businesses will want to grow and remain profitable. Therefore, the marketing objectives are likely to be about growing profitable sales.

The most likely marketing objectives are:

  1. Sales volume: the number of units sold. This could be for a specific product, or a range of products.
  2. Sales value: the revenue generated from products.
  3. Market size and sales growth: an increase in the size of the whole market in volume or value of sales
  4. Market share: the percentage of the total market. Of course, this does depend on what’s defined as the total market for a particular business. For example, it might mean for sales of a sports car a percentage of sports car market for the world, or the UK or the area or for just the two-seater?
  5. Brand loyalty: measured by repeat sales. Not appropriate for more one-off purchases, like bespoke machinery for large manufacturing companies.

External Influences on Marketing Objectives

  1. Competition – products, their marketing strategies.
  2. Customer incomes – which can be affected by government policies, like taxes or interest rates.
  3. __Legislation __– for example, advertising standards.

Definitions

Marketing managementdecision makers in a business who identify, anticipate and satisfy customer needs profitably
Marketing objectivesLong-term targets for business
Market size volumeQuantity of goods and services produced in a particular market over a period of time usually one year
Market size valueThe total sales revenue generated from selling all of the goods and services produced in a particular market over a period of time usually one year
Sales volumeQuantity of goods and services produced by a particular business over a period of time usually one year
Sales valueTotal sales revenue of a particular business over a period of time usually one year.
BrandA product that is publically distinguishable from other products.
In 2015 a business has sales of £45,000. In 2016, it’s sales are £63,000. What is its sales growth?
0.4
What are the main external influences on marketing objectives?
Your answer should include: competition / customer / legislation
Exam Style QuestionAnalyse how setting clear marketing objectives might have helped a business making better decisions. [9 marks]
Your answer should include: focus / planning / checkpoint / direction
Explanation: This is a 9 mark question. You would spend around 10 minutes in the exam on this. You should make between two and three key points and then apply them to a particular business. Use examples of large or small businesses you know to illustrate your points. Analysis means showing how a key point impacts on a business. It gives the causes and the effects. You will be using terms like: because, so, therefore and means. In this question, consider what objectives mean, what possible marketing objectives could be and how they might be applied to decision making.

Internal Influences on Marketing Objectives

  1. Budget – does the business have enough cash to invest in achieving the objective?
  2. Current product portfolio – does the business have a strong range of products?
  3. __Skills/expertise __– does the business have the right people? For example, skills in social media or understanding the market place in different countries.
  4. The brand and brand loyalty.
  5. __All objectives must tie into the other functional objectives __– that is operations management, finance and human resource management,

Brand and brand loyalty is a key factor for the success of a business.

A brand is something that a customer immediately identifies with and trusts. That means they are more inclined to buy, and not buy from another brand.

Good branding enables a business to sell more and/or charge more than their rivals.