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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