3.1.1 SETTING MARKETING OBJECTIVESAQA Business

3 DECISION MAKING TO IMPROVE MARKETING PERFORMANCE

What are the similarities and

differences between these 2 markets?

What do you think are the marketing objectives of these two businesses?

3.1.1 SETTING MARKETING OBJECTIVES

In this topic you will learn about

The value of setting marketing objectives

External and internal influences on marketing objectives and decisions

MARKETING OBJECTIVES

Corporate Objectives

Functional Objectives

Marketing Objectives

The targets that the marketing function of a

business wants to achieve in a given time period.

MARKETING OBJECTIVES

Marketing objectives are likely to be informed by research and potentially constrained by budgets

They will be used to select the marketing strategy and develop a marketing plan

Marketing objectives may focus on:

Sales volume and value

Market size

Market and sales growth

Market share

Brand loyalty

MARKETING OBJECTIVES

Sales volume and sales value

Sales volume is the amount of sales expressed as a number of units sold e.g. 20 tonnes of wool

Sales value is the amount of sales expressed as the total sum of money spent by consumers e.g. £3 million expenditure on clothing

With reference to the supermarket and retail industries explain what is meant by the terms sales volume and

sales value.

Would it be possible for a

business to set an objective to increase sales value whilst

reducing sales volume?

MARKETING OBJECTIVES

Market size is the total sales value or sales volume in a given market

Market size can be calculated as:

Number of units sold x price

e.g. If there are 2 million cars sold at an average price of £15 000 then the market size is (2 million x £15 000) £30 billion

MARKETING OBJECTIVES

Market and sales growth is the percentage increase in the size of the market by value or volume over a period of time

Growth can be calculated as:

Change in size of market/original size x100

e.g. If the fashion market grows from £30 billion to £33 billion it has grown by (£3 billion /£30 billion) x 100) 10%

What is the growth in the automotive industry forecast to be between 2012 and 2017?

MARKETING OBJECTIVES

Market share is the proportion of total market sales that a firm has

Market share can be calculated as:

Business A sales/market sales x 100

Analyse the benefits to a firm such as Facebook of increasing market

share.

Why might any business set an objective of maintaining or increasing market share?

MARKETING OBJECTIVES

Brand loyalty exists when customers keep returning to buy a recognised brand

Branding is a promotional method that involves the creation of an identity for a business that distinguishes it and its products from competitors

IN PAIRS

Prepare a short presentation about the confectionery market

Show your understanding of all the terminology covered under marketing objectives

Mondelez wins with share bags but Mars suffers after downsizing

INTERNAL INFLUENCES ON MARKETING OBJECTIVES

Finance

Marketing budget

Cash flow targets

Timing and quantity of sales

Return on investment targets

Revenue is generated through marketing activities

HR

Will marketing activities lead to more customers?

Are staff trained to respond to marketing activities?

Keeping staff informed

Why would a business want to plot marketing

expenditure against sales?

What would you expect the

correlation to be?

INTERNAL INFLUENCES ON MARKETING OBJECTIVES

Operational issues

Ability to meet demand Little point in generating increased demand if stocks

are not available

Implementation of marketing decisions Ability to physically produce a new or changed product

Logistics of a new market Distribution and stock issues

Corporate objectives

Always the driving force behind other functional objectives

Why is it important for the marketing function to understand capacity utilisation?

EXTERNAL INFLUENCES ON MARKETING OBJECTIVES

Competitors’ actions Marketing budget Promotional activities Pricing policies Product development Aggressive marketing

Market factors Degree and relative power of competitors Social factors Legislation Demographics

EXTERNAL INFLUENCES ON MARKETING OBJECTIVES

Technological change

E commerce

Digital marketing

Social media

Global markets

Production capabilities

Ethical and environmental influences

Consumers’ expectations

Pressure groups

How have ethical and

environmental influences

impacted on the marketing

objectives of Nestle?

3.1.1 SETTING MARKETING OBJECTIVES

In this topic you have learnt about

The value of setting marketing objectives

External and internal influences on marketing objectives and decisions