1. Lesson 4: Setting Goals and Objectives

2. Lesson 4 Objectives Gain the understanding that marketing strategy and planning needs to set clear, measurable, and realistic objectives that can be achieved within a set period. The tools that make this practical and possible are shared. 2

3. Lesson 4 Topics 1.Understanding Goals and objectives 2.Guidelines to Setting Objectives 3.Types of Objectives 3

4. Business Goals and Objectives Business goals and objectives are part of the planning process. They describe what a company expects to accomplish within a given period. Business owners usually outline their goals and objectives in their business plans. These goals and objectives might pertain to the company as a whole, departments, employees, customers and even marketing efforts. Most companies use specific measurements to keep track of their goals and objectives. 4

5. Definitions and Meanings …….Goals vs. Objectives – What’s the Difference? 5

6. Goals and Objectives It’s often hard to know the difference between goals and objectives – in fact, we often use the two terms interchangeably. However, knowing the difference can help us to use both in a constructive way, to get us from where we are as an organization(or individual) to where we want to go. 6

7. Goals….. Goals tend to be long on direction, and short on specifics and tactics Goals are more generalized in nature Goals are about the big picture of an organization Goals define the destination of an organization 7

8. Goals - Example You can set a goal of losing weight without having a specific plan as to how to do it. In this case, You’ve defined the destination you want to arrive at (loosing weight) without indicating time lines, how many kgs to loose and how to get there. It means that ‘how’ can be developed as you move forward Loosing weight in this case is your goal 8

9. Objectives Objectives are specific results that a person or system aims to achieve within a specified time frame and with specified resources. Objectives are more specific and easier to measure than goals Objectives are basic tools that underlie all planning and strategic activities Objectives serve as the basis for creating policy and evaluating performance 9

10. Objective - Example From the goal on loosing weight, an objective can be drawn thus: - To loose 10kg within 6 months The actions to help the individual achieve this objective is then met through various strategies and action plans 10

11. Goals vs. Objectives A goal defines the direction and destination, but the road to get there is accomplished by a series of objectives. A goal is a principle that guides decision making while objectives are specific, measurable steps that can be taken to meet the goal 11

12. Goals vs. Objectives Goals are broad Goals are general intentions Goals are intangible Goals are abstract Goals are generally difficult to measure Objectives are narrow Objectives are precise Objectives are tangible Objectives are concrete. Objectives are measurable 12

13. Illustration A business owes Ksh 5,000,000 in two different banks and would like to become debt-free. Getting out of debt (being debt-free) is the goal. The goal is achieved by paying off each of the two banks, one at a time. The pay-off of each bank is an objective — the series of smaller targets that need to be hit in order to achieve the big picture (goal) of becoming debt-free. The methodology for paying off each bank will be very specific — i.e., it will need to pay X amount of money to bank #1 for Y number of months in order to meet the objective of paying it off. Then it will need to repeat the action for the remaining bank. The objectives in this case are very specific. 13

14. Question For an organization of your choice, discuss in groups of three and present to class one likely goal and three objectives that an organization can develop from that goal 14

15. Gives a sense of purpose and direction to all functions within an organization Directs activities towards the same goal in a consistent way Motivates staff to achieve goals Objectives provide a benchmark on which to gauge performance thus enables basis for control and assessment Importance of Objective Setting 15

16. Guidelines on objective setting A useful way of making objectives more powerful and measurable is to use the acronym SMART S - Specific M- Measurable A - Attainable R - Relevant T - Time-bound 16

17. SMART OBJECTIVES a Mission Statement Specific – Define your company objectives precisely Measurable – State Targets clearly in measurable terms Achievable – Targets to be challenging but not overstretched in a way that they demoralize staff Relevant / Realistic -Targets to be within the context of the company’s vision and resources; achievable and reflecting company’s current position Time Bound – Targets to be aligned within a given time period - 17

18. Types Of Objectives CORPORATE OBJECTIVES- relate to what the business wants to achieve and tend to cover measurable outcomes in line with:- i.Growth ii.Financial performance iii.Innovation iv.Corporate Reputation etc 18

19. Corporate Objectives cont… Corporate objectives are often concerned with the overall long-term profitability of the organization and are most often expressed in financial terms 19

20. Examples of Corporate Objectives To achieve a 15% return on equity To increase operating profits by 20% To achieve a return on investment of 25% To achieve a return of 20% of capital employed(ROCE) To achieve growth of 10% in earning per share(EPS) 20

21. FUNCTIONAL OBJECTIVES These are objectives set out for each function / department within an organization e.g Operations department, Finance department, Human Resources department and Marketing department. Each functional objective is derived from the corporate objectives. 21

22. Examples of Functional Objectives Human Resource Department objective To reduce staff turnover by 15% over the next 2 years To increase training budget by 5% in 2015 Finance Department Objectives To reduce customer payment period by 12 days over the next 18 months To cut debts from 3% to 2% of turnover in 2015 22

23. Marketing Department Objectives These are set in order to guide the marketing strategy of an organization They are derived by referring to the mission statement, corporate goals and corporate objectives They are concerned by management of company products and markets. They should be clear statements of where the organization would like to be in marketing terms and what it expects to achieve as a result of its planned marketing actions. 23

24. Examples of Marketing Objectives To increase overall sales by 15% by 2017 To increase market share of product X by 10% by end of 2017 To increase customer retention by 25% by 2017 To increase the number of new products per year from 2 to 5 by 2017 To increase market share from the 10% to 15% by 2017 To achieve a sales revenue of 40 million at a cost of sales not exceeding 80% in 2017 To increase awareness of brand X in the target market Z from20% to 45% in 2017 24

25. Question As a Marketing Manager, develop one corporate and four marketing objectives that will help with the planning process and enable company become marketing oriented. Use the following organizations:  A local Library  A university  A Supermarket Chain 25

26. Influences On The Formulation Of Objectives  Internal influences i.Internal stakeholder expectations ii.Management style iii.Organization culture iv.Internal environmental factors (7Ps etc) 26

27. Influences cont..  External Influences i.Macro-economic environment (PESTEL factors) ii.Micro-economic environment (Competitors, distributors, suppliers, bankers etc) 27

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