Understanding Marketing Objectives Marketing Strategies- BUSS3

Lesson Objectives Define Marketing Objectives Describe the range of Marketing Objectives typically set by larger businesses. Explain and analyse how internal and external factors can influence Marketing Objectives.

Key Terms Marketing Objectives- the goals of the marketing function which come from, and are designed to help achieve, the corporate objectives.

Introduction At AS you learnt about marketing and the competitive environment, with the emphasis on small businesses. At A2, you will use this knowledge to consider the marketing objectives and strategies developed by larger organisations.

The Planning Process No area of the business can work in isolation and there will be a range of factors, from within the organisation and from outside, that will have an impact on the objectives that the business hopes to achieve through marketing. The Planning Process within the marketing department should follow the following stages: Corporate Objectives Marketing Objectives Market and Market Analysis Marketing Strategies Marketing Plans

Possible Marketing Objectives Although the marketing objectives will develop from corporate objectives, they are likely to include some of the following: To maintain or increase market share: A business might want to ensure that it does not lose ground to competitors who are threatening to take customers away. On the other hand, the objective might be to increase the percentage of total market it controls. To target a new market segment of an existing market or a new market: When one market becomes saturated or sales begin to decline, a firm may consider whether the product could be aimed at a different target audience within the home market or at the same market in other countries. To develop new goods and services as a result of market research findings or technological developments: This could also be because existing products are reaching the end of their product life cycle or the business is facing fierce competition in existing markets.

Whatever the marketing objectives are, they should always be quantifiable targets so that success can be judged. For example, has market share increased or been maintained? Have sales to the new target market have been achieved within the specified timescale.

Internal Factors influencing the setting of marketing objectives Corporate Objectives Finance Human Resources Operational Issues

Finance This refers to the amount of money available to the marketing function to spend on its activities for a given period of time. Factors which will have an impact on the final marketing expenditure budget include the organisations financial position and the expected return on a marketing project. The organisations overall financial position is obviously very important. It might be assumed that the size of the budget will reflect the success of the business: the more profitable the company, the higher spending on marketing. However, it could be argued that when the firm is in difficulty and sales are falling or market share is decreasing, the marketing budget should be increased. Of course, this logic is of little help if there is not the finance available. The expected return is particularly important when deciding on the marketing expenditure budget. If marketing objectives have been successfully achieved in the past, this can increase the likelihood of finance being made available in the future. If the expected return on a marketing project is relatively low, there is less chance of funding being made available.

Human Resources The skills and abilities of the workforce will have an impact on the marketing objectives because they can potentially limit what the business is able to do. There is no point planning to make use of technological developments if the employees of the organisations do not have the necessary skills. On the other hand, the workforce might well be an under-utilised resource that has the potential to give the business a competitive advantage over its rivals in the market. http://www.youtube.com/watch?v=jqRjl0HMLvQ

Operational Issues It is very important that the marketing function takes issues such as quality and capacity into consideration when setting objectives. For example, if the decision is taken to introduce a new product to the range, it is essential that the business has the manufacturing capacity or the space to cope with extra customer numbers. In the same way, an operational objective of quality improvements should be incorporated into marketing planning. For example Apple want to launch the iphone 5 have they got the capacity to manufacture these phones?

External Factors influencing the setting of marketing objectives Competitors Actions Market Factors Technological Change

Competitors Actions When making decisions about marketing objectives, the current and/or future actions of major competitors must be taken into consideration. This should involve an assessment of all the elements of the marketing mix, pricing, promotion, distribution, and product policies as well as overall spending on marketing. For example, if a main competitor in the market is developing e- commerce as a major channel of distribution, it will be difficult for a business to ignore this policy without running the risk of losing market share. You may notice that a major promotion by one firm in a competitive market is often followed by equally large-scale campaigns by rivals. Look at the example of H&M. Who are their major competitors What actions do you think they would have taken to reduce the impact on their sales?

Technological Change Computer-aided manufacturing can significantly reduce production times and labour costs. This may open up new markets or increase a companies ability to compete in a low-cost market. On the other hand, technological developments can lead to shortened product life cycles which have implications for product development. Ultimately, it can lead to products becoming obsolete which can have a major impact on the marketing objectives of the business.

M&S Plan A Read the article on M&S’s Plan A. Analyse how finance and operational issues may have influenced M&S marketing objective? To what extent would the actions of competitors be the major influence on M&S’s marketing objective? Explain how internal factors will influence the implementation of M&S’s plan A.